Polar Capital Tech shifts to AI winners as US mega-cap underweight hurts relative performance

investmentweek.co.uk:

Since 31 October, the trust’s NAV is up 11.1% compared to a 10.1% rise for the index.

In its interim results to 31 October published today (12 December), the trust revealed its NAV had increased 12.1% over the six months, while its share price rose 10.6%. However, it lagged the Dow Jones Global Technology index, which rose 12.8% over the same period.

Its discount also continued to widen, rising from 13.4% in April to 14.5% by 31 October, and currently sits at 13.2%, according to data from the Association of Investment Companies. Since 31 October, the trust's NAV has risen up 11.1%, compared to a 10.1% rise for the index.

Monks laments 'bruising' underperformance period as managers reposition portfolio

Managers Ben Rogoff and Ali Unwin noted this was largely due to the portfolio's underweight position in US mega-caps, such as Meta and Alphabet, which performed strongly over the period.

«The half year proved an active one for the portfolio as we rotated decisively towards AI as a primary investment theme,» they said, citing the addition of firms such as Micron Technology and BE Semiconductor Industries.

«We also made a series of investments in smaller Asian component and materials companies that we believe have a more significant role to play in AI chip and server manufacturing than they did during the cloud era,» the managers added.

«In addition, we recalibrated our software exposure towards companies which appear able to monetise AI within their existing offerings (Adobe; Monday.com) as well as adding several data-related assets (Datadog; Teradata) that should benefit from the growth in AI-related workloads and the need for better data.»

Finsbury Growth & Income performance 'concerning' as trust lags benchmark for third