“To contrarian investors, bad news is often good news,” says Investors Chronicle. So the fact that the Aegon Technology Fund closed at the end of July could be a good sign for the tech sector. Aegon’s closure is the latest in a line of shut-downs. Just 14 technology unit trusts and two investment trusts remain, says The Daily Telegraph. Yet technology is proving a far more durable investment than in the grim days after the bubble popped in 2000. The recent market turmoil saw the sector hold up comparatively well. And with IT now a fundamental part of company infrastructure, as the FT puts it, the sector is less cyclical than it was.
Among the best-performing of those funds left is Artemis New Enterprises, which has returned 113% over the past five years. “To be successful with a tech fund consistently over the last five years shows real class. I have been a buyer of Lindsay Whitelaw’s Artemis New Enterprises for my own pension fund for some time,” says Alan Steel of Alan Steel Management in The Daily Telegraph.
Whitelaw believes there will be a boost to computer hardware sales as firms upgrade their systems to Windows Vista, the latest version of the Microsoft operating system. “We have not had a ‘must have’ technology [for some time] – but Windows Vista has the capacity to be one,” he tells the FT. “If it is, it has ramifications for a host of suppliers.” And investors too. “Technology is a kind of secret bull market because nobody is talking about how the best funds are doing, but the closure of the Aegon fund could be a clear buying signal for the brave contrarian,” says Steel.
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Artemis New Enterprises top ten holdings
Name of holding, % of assets
Aveva Group, 4.30
Accsys Technologies, 3.90
Detica Group, 3.50
Fidessa Group Plc, 3.40
NCC Group, 3.30
Reuters Group, 3.10
Powerfilm Inc, 3.00
Sigma Capital Group Plc, 2.80
System Healthcare, 2.80
Phoenix IT Group, 2.80