GAM Star technology will invest globally but the bulk of the portfolio will be invested in the US, where many technology firms are based. It aims to outperform the MSCI World Information Technology index by 10 per cent a year
GAM investment director Mark Hawtin manages the fund. He joined GAM in 2008, having previously managed a technology hedge fund at Marshall Wace, theMarshall Wace eureka interactive technology hedge fund.
Hawtin feels the technology sector is unloved, under-researched and undervalued, which gives rise to price inefficiencies that result in some strong investment opportunities. Many Investors had their fingers burnt in 2000 and have been put off the sector since then. The years of underperformance that followed the bursting of the tech bubble and negative investor sentiment has contributed to the pricing of good companies at cheap valuations that are attractive to fund managers.
Internet companies will feature strongly in the portfolio as Hawtin believes broadband to be transforming the way companies do business. As well as established firms needing to invest in new technology to carry out their usual business, the fund will also benefit from trends such as the popularity of the smart phone and i-pad, and the of new technology for connecting to the internet and communication.
Poor performance and a lack of investor interest following 2000 caused a number of technology funds to close, so investors who want specific exposure to the technology sector have had limited choice. This fund increases choice in the market, but some investors may still be wary of the technology sector. Offshore technology funds that could compete with GAM include those from Fidelity, Aberdeen and Invesco International. Onshore competition may come from Axa Framlington and GLG.