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Invesco GT global dynamic

Last year, everybody was either scrambling to get in on the technology

stock boom or the high-yield corporate bond junket. While the technology

story is still very much in play despite recent market volatility, several

fund managers are looking to give investors a diff- erent offering which

incorporates technology via a global theme fund.

Mercury and CGU have both launched global funds in recent months. But

Invesco GT got there early, launching its fund in 1997. It says technology

funds are thematic investment at its most concentrated and thematic

investment need not necessarily involve putting all your assets into the

high-tech basket.

Fund manager Tim Miller says: “Taking a perspective on industrial groups

rather than geographic regions, we came up with seven dynamic themes which

we believe will increasingly shape the world in the 21st Century.”

He says the seven dynamic themes each represent between 5 and 30 per cent

of the total portfolio They centre on not only the high-profile technology

and telecoms industries, but also consumer prod- ucts and services,

healthcare, financial services, natural resources and infrastructure.

“The full quotient is only around 70 stocks, so a great deal of effort

goes into selection and monitoring. Existing holdings are reviewed

constantly,” says Miller.

“In telecoms, data traffic is growing so fast in many quarters that

infrastructure providers are finding it hard to keep up. Telecoms stocks

are among those we most favour. Dedicated-line growth has exceeded

expectations in each of the last two years and could well do so again this

year.”

Miller believes cable and satellite broadband systems will speed up

delivery of information for companies and will replace analogue lines. Once

consumers get rapid communication speeds at work, he reckons they will want

them at home too.

“There will be pressure upon the network operators to upgrade

infrastructure to deliver information at a faster rate with an emphasis on

reliability. Technology is forming an increasingly important part of daily

lives at home and work. In the US, it is estimated that 50 cents of every

dollar invested in a business goes on technology and that is likely to

rise,” says Miller.

The fund has a substantial exposure to fast-growing technology companies.

It holds Intel, the world&#39s biggest producer of microprocessors for the

personal computer market. The company unveiled the world&#39s fastest

processor in February and has a $1.5bn deal that will involve supplying

chips to Ericsson for the next three years.

Miller says: “Consumer goods and services are a long-term theme fuelled by

rising disposable income and falling trade barriers around the world. We

are particularly excited by media and broadcasting companies.

“New technologies, such as digital TV, digital versatile disk (DVD) and

the downloadable MP3 music format are driving demand for media content.”

Miller says the AOL-Time Warner deal is a reminder of the importance of

having good content. Time Warner is, arguably, the world&#39s top content

company, with a massive library of films, cartoons and TV series. He says:

“In view of the &#39AOL anywhere&#39 strategy, the partnership looks formidable.”

The fund has picked a financial services theme because it sees the

continuing growth in the financial services industry as inevitable, with

provision for retirement falling increasingly on the individual.

An ageing population in the developed world and rising living standards in

emerging countries are driving the healthcare market forward. Miller also

sees a strong recovery in Asia helping to boost infrastructure stocks.

He says the key attraction of the thematic approach is that it enables

Invesco to avoid problematic global sectors such as manufacturing.

“We can take a global perspective on the really exciting industries with

the brightest futures,” he says.

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