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2. Source: Lipper. As at market close.
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As artificial intelligence becomes mainstream, the pace of disruption is accelerating.
As one of the largest, most experienced technology investment teams in Europe, we have deep experience in identifying trends early. As these transformative innovations are rapidly adopted, we are embracing the opportunities this brings to the technology sector and the wider world.
Past performance is not a reliable indicator of future returns.
The breakthrough in Artificial Intelligence represents one of the most exciting developments in technology yet. We believe this is akin to the commercialisation of the internet; smartphones; and the launch of the cloud.
Technology has become a pervasive and integral force in our everyday lives and there are a number of secular trends driving long-term growth in the sector. PCT seeks to benefit from this by investing across several core, multi-decade technology themes:
Our approach aims to cut through the hype which often can be found within the technology sector, and lead to unjustified valuations and elevated levels of risk. We have a highly disciplined, conservative approach that – in a high growth sector – differentiates the portfolio from its peers.
We look for technology companies playing on structural, secular trends and that offer genuine long-term growth potential. These technology companies will be the primary beneficiaries as the sector continues to capture an ever-higher proportion of global GDP, disrupt industries, and transform business models.
Managed by an expert team of dedicated technology specialists, PCT has an impressive long-term track record, built on the managers ability to identify emerging technology trends and invest with conviction in those companies best placed to exploit them.
Cumulative performance (%) | 1 year | 3 years | 5 years | 10 years |
---|---|---|---|---|
Ordinary Share Price (TR) | 50.00 | 36.67 | 138.85 | 527.22 |
NAV per Share (TR) | 41.04 | 39.25 | 143.25 | 585.01 |
Benchmark | 40.83 | 54.95 | 169.27 | 603.14 |
Discrete performance (%) | 31.03.23 28.03.24 | 31.03.22 31.03.23 | 31.03.21 31.03.22 | 31.03.20 31.03.21 | 29.03.19 31.03.20 |
---|---|---|---|---|---|
Ordinary Share Price (TR) | 50.00 | -12.20 | 3.78 | 40.17 | 24.68 |
NAV per Share (TR) | 41.04 | -8.07 | 7.40 | 54.91 | 12.76 |
Benchmark | 40.83 | -3.67 | 14.21 | 54.96 | 12.14 |
Data as at 28 March 2024.
Past performance is not indicative or a guarantee of future results. Source: Bloomberg & HSBC Securities Services (UK) Limited, percentage growth, Net of Fees in GBP terms. Benchmark index used is the Dow Jones Global Technology Index (Total Return). More information on performance can be found in the Share Price & Performance tab.
Data as at 28 June 2024
Source: Bloomberg & HSBC Securities Services (UK) Limited, percentage growth, Net of Fees in GBP terms. Past performance is not indicative or a guarantee of future results. Benchmark index used is the Dow Jones Global Technology Index (Total Return). More information on performance can be found in the Share Price & Performance tab.
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Performance/Investment Process/Risk: Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Factors affecting the Company’s performance may include changes in market conditions (including currency risk) and interest rates and in response to other economic, political, or financial developments. The Company’s investment policy allows for it to enter into derivatives contracts. Leverage may be generated through the use of such financial instruments and investors must be aware that the use of derivatives may expose the Company to greater risks, including, but not limited to, unanticipated market developments and risks of illiquidity, and is not suitable for all investors. Those in possession of this document must read the Company’s Investment Policy and Annual Report for further information on the use of derivatives. Past performance is not a guide to or indicative of future results. Future returns or income are not guaranteed and a loss of principal may occur. Investments are not insured by the FDIC (or any other state or federal agency), or guaranteed by any bank, and may lose value. No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Last updated {{time}} {{Date}}
2. Source: Lipper. As at market close.
The global pandemic has shown the modern world is built on technology. Trends we have witnessed and written about for many years have accelerated during the crisis, and many will remain as the crisis recedes. Polar Capital Technology Trust plc provides investors access to this enormous, fast-evolving potential.
Managed by a team of dedicated technology specialists, PCT is a leading investment trust with a multi-year track record – a result of the managers’ active approach and their ability to not only identify developing technology trends early on but to invest with conviction in those companies best placed to exploit them.
Past performance is not a reliable indicator of future returns.
The Company aims to maximise long-term capital growth through investing in a diversified portfolio of technology companies around the world.
At the Annual General Meeting in 2012 shareholder approval was obtained for a simplified investment policy. This did not change the investment objective but provides a clear and appropriate set of up to date investment restrictions in line with the Financial Conduct Authority and HM Revenue and Customs current requirements. The portfolio was managed under and in accordance with the old policy and restrictions in the year to 30 April 2012 and up to 4 September 2012 when the change was approved by shareholders.
Asset allocation
Technology may be defined as the application of scientific knowledge for practical purposes and technology companies are defined accordingly. While this offers a very broad and dynamic investing universe and covers many different companies, the portfolio of the Company (the “Portfolio”) is focused on companies which use technology or which develop and supply technological solutions as a core part of their business models. This includes areas as diverse as information, media, communications, environmental, healthcare, finance, e-commerce and renewable energy, as well as the more obvious applications such as computing and associated industries.
The Board has agreed a set of parameters which seek to ensure that investment risk is spread and diversified. The Board believes that this provides the necessary flexibility for the Investment Manager to pursue the investment objective, given the dynamic and rapid changes in the field of technology, while maintaining a spread of investments.
The Company uses the Dow Jones Global Technology Index (total return, Sterling adjusted, with the removal of relevant withholding taxes) as the Benchmark against which Net Asset Value (NAV) performance is measured for the purpose of assessing performance fees. From 1 May 2013 the benchmark was calculated using a net basis which adjusts the Benchmark income element to reflect withholding taxes which would be suffered by a UK based investor.
However, the Benchmark is neither a target nor an ideal investment strategy. The purpose of the Benchmark is to set a reasonable return for shareholders of PCT above which the Investment Manager is entitled to a share of the extra performance it has delivered.
Risk diversification
PCT will at all times invest and manage its assets in a manner that is consistent with spreading investment risk and invests in a Portfolio comprised primarily of international quoted equities which is diversified across both regions and sectors. PCT will satisfy the following investment restrictions:
In addition to the restrictions set out above, PCT is subject to Chapter 15 of the UK Listing Authority’s Listing Rules which apply to closed-ended investment companies with a premium listing on the Official List of the London Stock Exchange. In order to comply with the current Listing Rules, PCT will not invest more than 10 per cent. of its total assets at the time of acquisition in other listed closed-ended investment funds, whether managed by the Investment Manager or not. This restriction does not apply to investments in closed-ended investment funds which themselves have published investment policies to invest no more than 15 per cent. of their total assets in other listed closed-ended investment funds. However, PCT will not in any case invest more than 15 per cent. of its total assets in other closed-ended investment funds. PCT must not conduct any trading activity which is significant in the context of its group as a whole.
Borrowing, Cash and Derivatives
The Company may borrow money to invest in the Portfolio over both the long and short-term. Any commitment to borrow funds is agreed by the Board and the AIFM.
The Company’s Articles of Association permit borrowings up to the amount of its paid up share capital plus capital and revenue reserves but any net borrowings in excess of 20% of the Company’s net assets at the time of drawdown will only be made with the approval of the Board.
The Investment Manager may also use from time to time derivative instruments as approved by the Board such as financial futures, options, contracts-for-difference and currency hedges. These are used for the purpose of efficient portfolio management. Any such use of derivatives will be made in accordance with PCT’s policies on spreading investment risk as set out in this investment policy and any leverage resulting from the use of such derivatives will be subject to the restrictions on borrowings set out above.
Changes to investment policy
Any material change to the investment policy will require the approval of the Shareholders by way of an ordinary resolution at a general meeting. PCT will promptly issue an announcement to inform Shareholders and the public of any change of its investment policy.
The Board monitors the portfolio’s exposure to different geographical markets, sub-sectors within technology and the spread of investments across different market capitalisations. Cyclical changes in markets and new technologies will bring certain sub-sectors or companies of a particular size or market capitalisation into or out of favour.
Market parameters
Notwithstanding the ability to invest up to 100% of the portfolio in any one market, with current and foreseeable investment conditions the Portfolio will be invested in accordance with the objective across worldwide markets within the following geographical and market parameters:
The Board has set specific upper exposure limits for certain countries where they believe there may be an elevated risk.
Cash
From time to time PCT may hold cash or near cash equivalents if the Investment Manager feels that these will at a particular time or over a period enhance the performance of the Portfolio. The management of cash is through the purchase of appropriate government bonds, money market funds or bank deposits depending on the Investment Manager’s view of the investment opportunities.
Gearing
On 30 September 2020, the Company had drawn down the two, two-year fixed rate, term loans of JPY 3.8bn and USD 36m from ING Bank N.V. Both loans fall due for repayment on 30 September 2022. The JPY loan has been fixed at an all-in rate of 0.90% pa and the USD loan has been fixed at an all-in rate of 1.1% pa. The Company has repaid the two, two-year loan facilities with ING Bank N.V of USD 23.3m and JPY 5.2bn dated 2 October 2018.
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
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Source: London Stock Exchange. Delayed by at least 15 minutes.
Invalid Dates
Update chart1 month | 3 month | YTD | 1 year | 3 years | 5 years | 10 years | |
---|---|---|---|---|---|---|---|
Ordinary Share Price (TR) | 10.37 | 10.00 | 27.17 | 49.66 | 39.36 | 146.64 | 596.06 |
NAV per share | 9.53 | 9.85 | 26.46 | 40.76 | 38.83 | 152.06 | 633.38 |
Benchmark | 9.30 | 11.75 | 26.97 | 41.40 | 55.68 | 183.88 | 655.14 |
Source: Bloomberg & HSBC Securities Services (UK) Limited, percentage growth, Net of Fees in GBP terms. Past performance is not indicative or a guarantee of future results.
Financial YTD | 30.06.23 28.06.24 | 30.06.22 30.06.23 | 30.06.21 30.06.22 | 30.06.20 30.06.21 | 28.06.19 30.06.20 | |
---|---|---|---|---|---|---|
Ordinary Share Price (TR) | 13.01 | 49.66 | 19.45 | -22.04 | 16.36 | 52.09 |
NAV per share | 15.37 | 40.76 | 22.82 | -19.70 | 28.97 | 40.78 |
Benchmark | 15.82 | 41.40 | 26.60 | -13.03 | 31.77 | 38.38 |
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Performance/Investment Process/Risk: Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Factors affecting the Company’s performance may include changes in market conditions (including currency risk) and interest rates and in response to other economic, political, or financial developments. The Company’s investment policy allows for it to enter into derivatives contracts. Leverage may be generated through the use of such financial instruments and investors must be aware that the use of derivatives may expose the Company to greater risks, including, but not limited to, unanticipated market developments and risks of illiquidity, and is not suitable for all investors. Those in possession of this document must read the Company’s Investment Policy and Annual Report for further information on the use of derivatives. Past performance is not a guide to or indicative of future results. Future returns or income are not guaranteed and a loss of principal may occur. Investments are not insured by the FDIC (or any other state or federal agency), or guaranteed by any bank, and may lose value. No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
NVIDIA | 11.1 | |
Microsoft | 9.5 | |
Alphabet | 7.1 | |
Apple | 6.3 | |
Meta Platforms (Facebook) | 5.0 | |
TSMC | 4.3 | |
Broadcom | 3.2 | |
Micron Technology | 2.5 | |
Advanced Micro Devices | 2.3 | |
Crowdstrike Holdings | 2.2 | |
Top 10 Holdings | 53.3 | |
Rest of Portfolio | 46.7 |
Total Number of Positions 97
Semiconductors & Semiconductor Equipment | 38.0 | |
Software | 19.5 | |
Interactive Media & Services | 13.6 | |
Technology Hardware, Storage & Peripherals | 8.1 | |
Electronic Equipment, Instruments & Components | 3.9 | |
IT Services | 2.3 | |
Entertainment | 2.1 | |
Communications Equipment | 1.9 | |
Broadline Retail | 1.6 | |
Aerospace & Defense | 0.9 | |
Automobiles | 0.8 | |
Machinery | 0.7 | |
Healthcare Equipment & Supplies | 0.6 | |
Media | 0.6 | |
Other | 1.1 | |
Cash | 4.2 | |
Note: Totals may not sum due to rounding.
Key | GBP | |
Total Net Assets | £4359.8m | |
AIC Gearing Ratio | n/a | |
AIC Net Cash Ratio | 4.28% | |
Large Cap (>US$10bn) | 91.2 | |
Mid Cap (US$1 - 10bn) | 8.5 | |
Small Cap (<US$1bn) | 0.3 | |
Cash | 4.2 |
US & Canada | 72.0 | |
Asia Pac (ex-Japan) | 10.1 | |
Japan | 5.4 | |
Europe (ex UK) | 5.4 | |
Middle East & Africa | 2.2 | |
UK | 0.7 | |
Cash | 4.2 | |
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Holdings: Portfolio data is “as at” the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company. The holdings may represent only a small percentage of the aggregate portfolio holdings, are subject to change without notice, and may not represent current or future portfolio composition. Information on particular holdings may be withheld if it is in the Company’s best interest to do so. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. This document is not a recommendation to purchase or sell any particular security. It is designed to provide updated information to professional investors to enable them to monitor the Company.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Allocations: The strategy allocation percentages set forth in this webpage are estimates and actual percentages may vary from time-to-time. The types of investments presented herein will not always have the same comparable risks and returns. Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith. Please note that the Company may elect to invest assets in different investment sectors from those depicted herein, which may entail additional and/or different risks. Performance of the Company is dependent on the Investment Manager’s ability to identify and access appropriate investments, and balance assets to maximize return to the Company while minimizing its risk. The actual investments in the Company may or may not be the same or in the same proportion as those shown herein.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Statements/Opinions/Views: All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof, but are subject to change without notice, and do not necessarily represent the views of Polar Capital. This material does not constitute legal or accounting advice; readers should contact their legal and accounting professionals for such information. All sources are Polar Capital unless otherwise stated.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Holdings: Portfolio data is “as at” the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company. The holdings may represent only a small percentage of the aggregate portfolio holdings, are subject to change without notice, and may not represent current or future portfolio composition. Information on particular holdings may be withheld if it is in the Company’s best interest to do so. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. This document is not a recommendation to purchase or sell any particular security. It is designed to provide updated information to professional investors to enable them to monitor the Company.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Forecasts: References to future returns are not promises or estimates of actual returns Polar Capital may achieve. Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation. Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place.
Performance/Investment Process/Risk: Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Factors affecting the Company’s performance may include changes in market conditions (including currency risk) and interest rates and in response to other economic, political, or financial developments. The Company’s investment policy allows for it to enter into derivatives contracts. Leverage may be generated through the use of such financial instruments and investors must be aware that the use of derivatives may expose the Company to greater risks, including, but not limited to, unanticipated market developments and risks of illiquidity, and is not suitable for all investors. Those in possession of this document must read the Company’s Investment Policy and Annual Report for further information on the use of derivatives. Past performance is not a guide to or indicative of future results. Future returns or income are not guaranteed and a loss of principal may occur. Investments are not insured by the FDIC (or any other state or federal agency), or guaranteed by any bank, and may lose value. No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable.
Allocations: The strategy allocation percentages set forth in this webpage are estimates and actual percentages may vary from time-to-time. The types of investments presented herein will not always have the same comparable risks and returns. Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith. Please note that the Company may elect to invest assets in different investment sectors from those depicted herein, which may entail additional and/or different risks. Performance of the Company is dependent on the Investment Manager’s ability to identify and access appropriate investments, and balance assets to maximize return to the Company while minimizing its risk. The actual investments in the Company may or may not be the same or in the same proportion as those shown herein.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Ordinary shares | |
ISIN | GB0004220025 |
SEDOL | 0422002 |
London Stock Exchange | PCT |
LEI | 549300TN1O5392UC4K19 |
LEI Polar Capital LLP | 4YW3JKTZ3K1II2GVCK15 |
£0 - £2bn | 0.80% |
£2bn - £3.5bn | 0.70% |
Over £3.5bn | 0.60% |
Performance | 10% over Benchmark |
Ongoing Charges | 0.81% |
The performance fee is subject to a highwater mark and cap. Further details can be found under Corporate Documents. Ongoing charges are calculated at the latest published year end date, and exclude any performance fees.
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Fund Manager Commentary As at 28 June 2024
Key points
Market review
Global equity markets continued to trend higher in June, the MSCI All Country World Net Total Return Index gaining +3.0%. The S&P 500 Index returned +4.3%, although the DJ Euro Stoxx 600 declined -1.7% (all returns in sterling terms). Economic data remained supportive of a US ‘soft landing’ (where inflation moderates without a severe increase in unemployment) although the Federal Reserve (Fed) signalled it was in no hurry to cut interest rates.
The US labour market remains robust, with 272,000 jobs added in May (above forecasts of 185,000), the most in five months, with the largest employment gains occurring in the healthcare and government sectors. Despite the strong labour market, the US Consumer Price Index (CPI) annual inflation rate moderated to +3.3% year-on-year (y/y) in May, from +3.4% y/y in April and below forecasts of +3.4% y/y. The core Personal Consumption Expenditure (PCE) deflator (the Fed’s preferred inflation gauge) also fell to +2.6% y/y in May, the lowest since March 2021.
While noting that there has been “modest further progress” in recent months, the Fed left its funds target range[1] steady at 5.25-5.50% for a seventh consecutive meeting, in line with expectations. Policymakers have said since the start of the year that interest rate cuts depend on gaining greater confidence that inflation is moving sustainably towards the central bank’s 2% goal. Despite progress in the month, the Fed’s core PCE inflation forecast for 2024 was raised to 2.8% (from 2.6% in March), while the Federal Open Market Committee (FOMC) – who decide US monetary policy – is now expecting a single rate cut this year (from three expected in March, and 6-7 earlier in the year), followed by four cuts in 2025.
US bond yields helpfully dropped 10 basis points (bps[2]) to 4.4% during June. However, as we stated last month, while higher for longer interest rates may not be welcomed by long-duration investors[3], a robust economy with slowly moderating inflation may prove an optimal scenario for economic growth and technology investment over the medium term.
Technology review
The technology sector strongly outperformed the broader market in June, the Dow Jones Global Technology Net Total Return Index (W1TECN) returning +9.3%, while the Trust returned +9.5% (all figures in sterling terms).
As is often the case during the early stages of a new technology cycle, market breadth remains exceptionally narrow, with returns dominated by companies considered synonymous with the new regime. During the month, the so-called Magnificent Seven[4] gained +9.2% with all seven constituents advancing by 5% or more, led by NVIDIA and a rebound in Tesla. As such, large-cap technology stocks continued to significantly outperform their small and mid-cap peers; the Russell 1000 Technology Index (large cap) and Russell 2000 Technology Index (small cap) returning +9.5% and +2.3% respectively. Longer-duration stocks fared worse still, with the Goldman Sachs Unprofitable Tech Index flat over the month.
Software stocks rebounded, the Bloomberg Americas Software Index returning +9.8% in June, lifting first-half returns into positive territory. After the group’s significant underperformance during 2024, some mean reversion was likely with better-than-expected results from Adobe Systems (Adobe) (see below) a rallying cry. Despite less demanding valuations, we remain significantly underweight (‘digital transformation’ is our smallest theme today), with growth slowing and AI-related uncertainty unlikely to dissipate.
In contrast, AI infrastructure spending strength continues unabated and is expected to remain so into mid-2025 as new products ramp and capacity constraints ease. AI-related semiconductor stocks outperformed: the Philadelphia Semiconductor Index (SOX)[5] added +7.7% in June and +34.7% during 1H24. We were encouraged to see some broadening here, with Broadcom +22.2% and TSMC +16.2% during the month, and both stocks adding to Trust performance partially offset by disappointing performance at Advanced Micro Devices (AMD) where we have continued to reduce exposure. Elsewhere, the NASDAQ Internet Index quietly gained +6% in June (and +15.2% for 1H24), supported by strong returns from Meta Platforms (Facebook), Amazon, Alphabet and Netflix amongst others.
Strong performance was supported by robust off-quarter earnings reports. Within the semiconductor sector, Broadcom delivered results ahead of expectations with revenue +43% y/y as demand for software, networking chips and AI chip design services more than offset cyclical weakness in non-AI semiconductors.
Memory maker Micron Technology also reported earnings during the period for their fiscal third quarter. Revenue grew +82% y/y driven by commodity memory pricing up +20% quarter-on-quarter (q/q) as demand for AI-related high bandwidth memory (HBM) continued to take up capacity and squeeze standard memory supply, driving up prices. Management expects “multiple billions” of HBM revenue next year, with their product offering 30% lower power consumption versus peers. However, margins were pressured by this ramp; we expect HBM to be accretive to corporate margins in the longer term. Management also spoke to a significant step-up in capital expenditure (capex) in 2025, which should benefit some of our semiconductor production equipment (SPE) holdings.
In the software sector, Adobe* reported better-than-expected Q2 results and nudged up their full-year 2024 net new Annual Recurring Revenue (ARR) target by $50m to $1.95bn. Despite ongoing Document Cloud momentum and some early success in their Acrobat AI Assistant product, we remain cautious on the potential risk posed by generative AI to Adobe’s business model. Elsewhere, cybersecurity vendor CrowdStrike Holdings reported strong earnings with Net New Annual Recurring Revenue (NNARR) of $212m above market expectations of $197m, but marginally below some investor expectations. Profit and cashflow metrics were also positive and the company guided NNARR to exceed analyst expectations.
Apple (underweight (u/w)), held its long-awaited Worldwide Developer Conference (WWDC) during the month. We were glad to see Apple finally embracing AI and were impressed by its innovation around small language models (SLMs) that can operate locally on the iPhone, as well as its Private Cloud Compute (PCC) that promises consumers a high level of privacy protection. However, it will be some time before developers can fully utilise these capabilities while Apple Intelligence will not be available in the EU this year due to regulatory concerns. While an AI-driven upgrade cycle appears likely (and nearer term, supply-chain checks suggest improved smartphone demand) we still see this as more a late 2025/early 2026 event. We remain underweight Apple, supplementing our cash equity position with call options[6] designed to reduce upside risk should near-term demand prove stronger than forecast.
Outlook
Technology returns have been driven by investor enthusiasm for AI stocks, underpinned by strong fundamental data (including robust revenue and earnings growth) and growing capital spending plans by the hyperscalers (the largest cloud service providers). Mega-cap outperformance primarily reflects superior growth: posterchild NVIDIA is a perfect example where remarkable year-to-date returns have been matched by exceptional revenue/earnings growth, leaving the stock’s price-to-earnings (P/E[7]) multiple relatively unchanged at c35x 2025. The largest six technology companies are expected to deliver robust second quarter earnings in the coming weeks, with 30% y/y earnings growth, versus 5% expected for the rest of the market.
The Trust has benefitted from our experience and accumulated knowledge from running a dedicated Artificial Intelligence (AI) Fund for the past seven years. In part, this resulted in the application of an ‘AI lens’ to our investment process to help assess every portfolio holding and potential holding in terms of its positioning in an AI-first world. Of the portfolio, 65% is explained by companies we believe are AI enablers, mainly in the semiconductor and cloud computing sectors, as AI infrastructure companies are leveraged to the early buildout phase of a new parallel computing architecture.
There has been a significant increase in aggregate hyperscale AI capex with expectations entering the year for +18% growth, revised up to +26% growth after Q4 earnings, and +44% growth after Q1 earnings (to reach $170bn total spend). Goldman Sachs estimate that there has been $60bn-$80bn of incremental hyperscaler AI capital spending above ‘regular’ cloud capex. While some worry this spend may not deliver an attractive return on investment (RoI), we see these investments reflecting the enormous opportunity the hyperscalers see ahead as every industry – perhaps every activity – has the potential to be reimagined in an AI-first world.
In Microsoft’s case, Azure AI revenue (c$3.4bn run rate) is already higher after just five quarters than Azure’s cloud revenue was six years after launch (and Azure AI is still capacity constrained). A Bernstein survey found 67% of CIOs believe AI “will be very productivity enhancing” and 79% are exploring applications of AI/LLMs (large language models). The proliferation of AI is so early that only 7% have AI as a meaningful part of budgets today, but 66% already agree that AI/LLMs could drive meaningful spending on compute for their organisation in the future.
While we appreciate fears over the sustainability of current AI spend, we believe strong growth will be sustained through the second half of 2024 and into 2025. It is important to note the industry has thus far been supply constrained and we expect significant capacity additions in HBM from major memory makers and advanced packaging technologies (including CoWoS[8]) at TSMC in the second half of the year. In addition, significant new product launches such as NVIDIA’s Blackwell chip will only begin to ramp in coming quarters, while we expect material improvements in AI model performance with the launch of the next generation of leading-edge models expected before year end. GPT-5.0 is expected to represent a “significant leap forward” both in terms of performance and “human-like” capabilities, according to OpenAI CEO Sam Altman. The AI applications we are all experiencing today (the earliest applications running on current hardware and models) are subject to dramatic improvement. As 2025 progresses, we expect the full potential of AI to become more obvious to all, which will help support continued investment.
It is also important to step back and consider the bigger picture, the race to Artificial General Intelligence (AGI) is now clearly underway. The performance of generative AI models improves in relation to increases in model size, computational resources, and data volume according to observed ‘scaling laws’. There is a strong imperative to increase spending as long as scaling laws hold, chips and models keep improving, and hyperscalers (and potentially other actors like nation states) compete to reach AGI as fast as possible -– expectations now appear anchored around a 2030 rather than 2050 timeline.
In our 25+ years as technology specialists, we have certainly not experienced a technology shift as exciting as we see unfolding today. If history is a guide, almost all industries will be reshaped by AI (and existing profit pools redistributed) while large new markets/opportunities will emerge (impossible to predict let alone size at this early stage). Understanding the impact of AI may be the most important factor investors have to consider this decade and we are hopeful that lessons from previous technology cycles could provide a blueprint for capturing much of the AI growth opportunity and navigating the disruption ahead.
Turning to the near-term outlook, second quarter earnings season will start in the coming weeks and should provide a plethora of supportive AI data points. Our expectation is that results will be solid and guidance upbeat (but, as usual, also conservative). Recent signs of low-end consumer spending weakness will likely continue but are unlikely to detract notably from AI investment strength. After a strong start to the year (driven by a narrow group of stocks), we caution that volatility could resurface whether driven by macro (rates/inflation), geopolitics (elections/policy) and/or sensitivity to perceived negative AI datapoints. However, notwithstanding the possibility of near-term turbulence – especially ahead of earnings season – we anticipate continued AI strength will support the sector through the second half and as such remain constructive on the outlook.
* not held
[1] The overnight lending rate among US banks
[2] A basis point is one hundredth of one percentage point; it is a common unit of measure for interest rates and other percentages in finance
[3] The longer the duration, the more sensitive a stock is to interest rates
[4] Microsoft, Amazon, Alphabet, Tesla, Meta Platforms (Facebook), NVIDIA and Apple
[5] An index of the 30 largest US semiconductor companies
[6] An option allowing the owner the right, but not the obligation, to buy an underlying security at a specific price within a specified time
[7] P/E stands for price-to-earnings ratio, which relates a company's share price to its earnings per share
[8] Chip on Wafer on Substrate; allows semiconductors to be packaged together more efficiently allowing faster processing, more complex computations and better performance (e.g. in gaming)
Ben Rogoff
Ben joined Polar Capital in May 2003. He is lead manager of Polar Capital Technology Trust plc and is a Fund Manager of the Polar Capital Global Technology Fund and Polar Capital Artificial Intelligence Fund.
Alastair Unwin
Alastair joined Polar Capital in June 2019 as a Fund Manager. Prior to joining Polar Capital, Alistair co-managed the Arbrook American Equities Fund. Between 2014 and 2018 he launched and then managed the Neptune Global Technology Fund and managed the Neptune US Opportunities Fund. Prior to Neptune, Alastair was a technology analyst at Herald Investment Management.
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