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Henderson Global Technology Fund research update

Richard Troue | Fri 13 February 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.

Technology is having an ever-increasing impact on everyday life and there is virtually no area of the economy which isn't being infiltrated to some degree by technological progress.

The shares of technology-related companies have generally performed well over the past year. The MSCI AC World Information Technology Index has delivered growth of 29.4% compared with 19.6% for the broader MSCI AC World Index.

Over this period the Henderson Global Technology Fund, managed by Stuart O'Gorman and Richard Clode, underperformed with growth of just 18.6%*. The managers cited the internet, software and hardware sectors as contributing to the underperformance.

Performance of the Henderson Global Technology Fund over the past year

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

Annual percentage growth
Feb 10 -
Feb 11
Feb 11 -
Feb 12
Feb 12 -
Feb 13
Feb 13 -
Feb 14
Feb 14 -
Feb 15
Henderson Global Technology 26.75% 1.08% 9.09% 15.21% 18.63%
MSCI AC World/
Information Technology
22.34% 0.65% 10.42% 14.35% 29.41%
IA Technology & Telecoms 32.56% 0.14% 9.84% 20.43% 14.09%

During 2014 the managers did not have enough invested in Intel, the computer-chip maker, for example. The company performed well following news it was benefiting from stronger demand for PCs. An investment in Pandora, the US-based internet radio service, also disappointed after its number of active listeners fell short of expectations.

In contrast, the fund's investment in Facebook performed well after the company made progress in its efforts to make more money from customers accessing the site on their mobile phones. Stuart O'Gorman and Richard Clode have also recently invested in YY, a Chinese social network. Like Facebook the company is increasingly finding ways to monetise its user base and grow revenues.

Elsewhere, the managers recently sold their investments in Symantec, the IT security company, and Netflix, the video streaming service. The former was sold following the departure of its CEO, and the latter over concerns about its international growth.

Looking ahead, the managers believe some companies need to start delivering earnings growth to justify some of the recent share price rises, but overall they believe the technology sector looks attractive. They suggest demand for technology products and service in the US remains robust, while they are finding companies with strong balance sheets and earnings growth potential.

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Our view on this fund

We like the managers' approach of focusing on companies with great products and a competitive advantage, which could fuel growth. The managers construct the portfolio with reference to the benchmark index, meaning the investments in the fund are unlikely to deviate significantly from the benchmark. This means the fund could be less volatile relative to the index than some peers, but we tend to prefer a more unconstrained approach. Over the past five years the fund has delivered attractive absolute returns, but it has underperformed both its benchmark and the peer group over this period; however, this should not be seen as an indicator of future returns.

Performance of the Henderson Global Technology Fund over the past five years

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

Overall, we view this as solid technology-focused fund, but it does not currently feature on the Wealth 150 list of our favourite funds across the major sectors.

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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