Polar Capital Global Tech R Inc |
by Jack Fletcher-Price
Polar Capital Global Technology continues to benefit from a best-in-class team implementing a considered approach to investing in an ever-changing sector. We retain both the People and Process Pillar ratings at High and Above Average, respectively. Nick Evans has been at the helm here since January 2008 and, along with comanager Ben Rogoff, brings a wealth of experience and expertise in the sector. Having invested through multiple general purpose technology cycles, the managers couldn’t be better prepared for the mainstream arrival of artificial intelligence and the opportunities it presents. The team around the managers continues to strengthen, with members Fatima Lu, Xuesong Zhao, and Alistair Unwin all made partners at the firm recently. The team numbers 10 following two new analyst hires in 2023. The team believes that the innovative nature of the technology sector makes it possible to add significant value by identifying disruptive new technologies early and finding the companies best placed to benefit from these emerging themes, while also avoiding the “blue-sky,” before-revenue speculation stage. Recently, the team has conceptualized an AI Lens through which it views all businesses, owing to the opportunities and threats it believes this technology presents. Classifications include Enablers, Beneficiaries, and Adopters. Interestingly, the proximity of the team with many tech firms means it has been able to access beta-testing stages of AI tools such as natural language processing for earnings calls and the like. The growth-centric approach, as well as the structure of the index, means the portfolio is likely to be overweight in mid- and small-cap stocks relative to its prospectus benchmark. The structural underweightings in Apple and Microsoft can weigh on relative performance when these names outperform the wider tech sector, as was the case in 2022, when the Apple underweighting was the top relative detractor from performance. From January 2008, when Evans became lead manager, to the end of December 2023, the strategy’s oldest share class (Inc) is slightly behind its prospectus benchmark but well ahead of peers, which is even more impressive considering the relatively high level of survivorship bias in the technology peer group. Relative performance of late has been hampered by Apple and Microsoft outperformance, though should they start to underperform the wider technology universe, these headwinds will become powerful tailwinds, and we would expect this strategy to start outperforming the index once again. |
Morningstar Pillars | |
People | High |
Parent | Above Average |
Process | Above Average |
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