Premier Asset Management’s multi-asset team is investing in technology for the first time through a holding in the Henderson New Star technology fund.
As a contrarian investor, Premier often sees a strong investment case for unloved, cheap and beaten-up stocks. The technol-ogy sector fits the bill because many investors have ignored it since the dotcom bubble burst 10 years ago.
Premier investment director, pooled funds, David Hambidge says the average technology fund is down by 70 per cent since the sector peaked in March 2000, when tech companies were being valued on multiples of future profits.
Hambidge says there is some risk in the price you pay for an asset but believes companies in the technology sector are very different to those which made profits only on paper during the dotcom bubble. Many have strong balance sheets and are cheap relative to their growth potential, which Hambidge says is good at a time when econ- omic growth is likely to be sluggish.
He says: “Tech is still a massive market and a lot of companies will have to spend on technology this year. We should have been bit earlier into the sector but we are in it for the medium term.”