|3 Yr Performance July 2016 to July 2019|
(click to enlarge)
Monday, 15 July 2019
Polar Cap Technology Trust - Results
In January 2017, I added Scottish Mortgage to my SIPP and the following year I added Mid Wynd to my ISA and in June 2018, I decided to add a third tech-focussed trust, Polar Capital Technology.
Launched in 1996, the trust has grown rapidly and now has assets under management of over £1.9bn. It is a global trust however 70% of the holdings are listed in the US. The trust has been managed by a team led by Ben Rogoff since 2006.
The trust has just over 100 holdings and the top 10 account for 41% of the portfolio and include tech giants Microsoft, Alphabet (Google), Apple, Facebook, Amazon, Tencent and Alibaba. These tech companies are fundamentally transforming the way we live our lives in a similar way to the impact of the industrial revolution.
The combined market cap. of the so-called FAANG stocks - Facebook, Apple, Amazon, Netfix and Google - now exceeds the total annual GDP of the UK. I believe the long term growth prospects for this sector offer investors significant rewards. Yes, these tech stocks have done well since the market turmoil of 2008/09 - PCT share price up 640% for example - and there is likely to be some volatility but I see no reason why the sectors ability to disrupt and grow should not continue.
The trust has today released results for the year to end April 2019 (link via Investegate). Net assets have increased by 24.8% compared to the benchmark World Technology index 21.4%. Over the same period, the FTSE All Share advanced by just 2.6%.
Over the last three years the trust has more than doubled returns for shareholders - very similar to Scottish Mortgage.
My three technology holdings which includes SMT and Mid Wynd will account for around 14% of my portfolio (SIPP/ISA). I am thinking I would not wish to hold much more than this weighting due to the volatility of the share prices.
My initial purchase price was £12.50 which represented a 2% discount to NAV and today, with a wider more attractive discount of 9%, it stands at £13.76 - a gain so far of 10%. The trust does not pay dividends.
As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!