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GLG Technology Equity Fund - removal from Wealth 150

Heather Ferguson | Thu 08 January 2015

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

The GLG Technology Equity Fund has been removed from the Wealth 150 list of our favoured funds for new investment. The Wealth 150 comprises fund managers we believe are able to add significant value to the returns of their relevant benchmark and outperform over the long term. We have lost conviction in the ability of Anthony Burton and Phil Pearson, managers of the GLG Technology Equity Fund, to achieve this.

The chart below shows the performance of the GLG Technology Equity Fund relative to the IMA Technology & Telecoms sector; it highlights the under or over performance of the fund over five years. When the line is rising, the fund is outperforming the peer group, when it is falling, it is underperforming. Performance of the fund has been inconsistent over this period and our analysis suggests the managers have added very little value through their stock picking ability since 2011, their positioning within the sector has also had a negative effect on returns over this time.

Performance of the GLG Technology Equity Fund relative to the IMA Technology & Telecoms sector over 5 years

The fund had a particularly torrid time in 2014, losing 20% in value in just over 2 months. The managers were expecting a selloff in technology stocks and so took some profits from the holdings they believed would be the most affected. However, the managers admit they were not positioned defensively enough and when share prices fell further than anticipated, the fund fell considerably further than the MSCI ACWI/ Information Index benchmark. The fund managed to re-coup much of the loss to finish the year 9% ahead, but underperformed the index by 15.76*%.

Overall this is a concentrated portfolio, containing 40 to 60 stocks and the managers have the flexibility to use derivatives and invest in emerging markets, all of which increases risk.

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Percentage growth of the GLG Technology Fund over five years

Past performance is not a guide to future returns. Source Lipper IM * to 02/01/2015.

Annual percentage growth
Jan 10 -
Jan 11
Jan 11 -
Jan 12
Jan 12 -
Jan 13
Jan 13 -
Jan 14
Jan 14 -
Jan 15
GLG Technology Equity 25.42% -1.69% 10.87% 23.26% 9%
IMA Technology & Telecoms 26.27% -3.7% 9.81% 25.72% 13.7%
MSCI ACWI/Information Technology 14.77% -3.72% 12.37% 21.17% 24.76%

While we continue to believe this adventurous fund is a good choice for exposure to this innovative and exciting sector, the Wealth 150 is reserved for funds with managers in which we have the highest conviction. While we initially felt the managers had the ability to add value over the long term, the fund has failed to add sufficient value for the fund to be included in the Wealth 150.

Presently, we do not feature any other technology funds on the Wealth 150. However, there are a number of actively managed funds in this sector, outside the Wealth 150, which are available to view here, alongside tracker funds and ETFs which aim to track a particular index of stocks. Investors should ensure the aim of the fund or ETF continues to meet their objectives.

Find out more about this fund including how to invest

Please read the key features/key investor information document in addition to the information above.

The value of investments can go down as well as up, this means you could get back less than you invested. Therefore all investments should be regarded with a long term view. No news or research item is a personal recommendation to deal. If you are unsure about the suitability of an investment please contact us for advice.
Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


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