Bestinvest says
Since the technology bubble burst in 2000 the vast majority of specialist technology funds failed to stay the course and have subsequently closed and of those that lasted, many have failed to add any consistent relative value. Henderson Global Technology is a rarity having outperformed its benchmark with reasonable consistency. However, this is a large cap approach to the sector and we prefer those technology funds which have a more pragmatic approach to blending large cap with small cap/early stage technology companies.
Views on sub-sectors effect allocation but the primary portfolio driver is bottom-up stock selection focusing on company valuation based on extensive company contacts. Companies are assessed in terms of where they are on the technology life cycle, which is broken down into: Emerging, Fast Growing, Consolidating, Dominant, Consumer Penetration and Commoditised. There is no set or target allocation amongst these groups with risk, price potential and the valuation process employed being dependent on where the management view the company in the life cycle. Emerging themes are generally played by a number of small positions. Management believe that technology companies are frequently undervalued by many who fail to appreciate the ongoing growth opportunities.