Fidelity Global Technology: February 2026 fund update

• The fund invests in technology companies from across the globe.

• The manager has a good track record of investing in technology companies and is backed up by a well-resourced research team at Fidelity.

• He is reluctant to pay high prices for companies, a style known as “value investing” which means that the fund can look quite different to the benchmark at times.

• This fund does not currently feature on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential.

How it fits in a portfolio

The Fidelity Global Technology fund aims to grow investors’ money over time by investing in technology companies, or companies that will benefit significantly from technological advances.

The fund invests globally, including in emerging markets and smaller companies, both of which increase risk. It invests in undervalued companies. These are companies that might be out of favour or where the manager doesn’t feel the share price matches the company’s longer-term potential but have the potential to bounce back.

This makes the fund quite different from other technology funds with high growth expectations, and from its benchmark, as it may hold little or nothing in some of the biggest companies that make up the index if the manager feels they are too expensive.

Investing in a single sector like technology is a higher-risk approach compared to a more diversified one. We think funds investing in a specific sector should usually only form a small part of a well-diversified investment portfolio.

Manager

The fund is managed by Hyun Ho Sohn. Sohn joined Fidelity in 2006 as an equity analyst on Fidelity’s Asia Research Team based in Seoul, South Korea. Prior to this he worked as an analyst at Morgan Stanley and Shinhan Investment. In 2011 Sohn relocated to Fidelity’s London office to begin managing a Global Technology Pilot fund. He built his track record on this fund before taking on the Fidelity Global Technology fund in 2013 which he’s managed ever since.

Sohn has access to Fidelity’s impressive global research platform, which includes 139 locally based research professionals. Of these, 31 are specialists in the IT and Communication Services sectors.

Dmitry Solomakhin is named as backup manager on the fund. Solomakhin is a fund manager on the global equity team at Fidelity.

Whilst Sohn makes good use of the wide resources available to him at Fidelity, he is the final decision-maker both in terms of what goes into the fund and how much is invested in each idea.

Process

Sohn believes that understanding technology trends, innovations and new technologies is just one element in identifying companies that could deliver good performance over the long term. In order to really add value for investors he thinks that it’s necessary to know companies well and buy shares in them at attractive valuations.

Most investors have short time horizons, encouraged by the quick-moving trends and complex sub-cycles of the technology sector. By taking a longer-term view Sohn believes that he can benefit from other investors’ short time horizons by focusing on companies which are currently out of favour, but whose outlook is significantly better than the current share prices suggest. He tends to buy companies earlier than other investors and sell them earlier too. This is known as contrarian investing.

Whilst a lot of companies in the technology sector can be classed as “growth”, the manager deliberately looks for different types of companies to get some diversification. Traditional growth companies, such as Alphabet, will still make up the majority of the fund though. These can be volatile in the short term but are held with a longer investment horizon of at least three years.

The manager also invests in cyclical businesses, preferring quality companies with strong balance sheets and good cash flow generation. These businesses tend to be less capital intensive than traditional growth companies, and the manager looks for companies with strong balance sheets to minimise downside risks. These tend to be held for a shorter time horizon, typically 12 to 18 months.

The third type of companies that the manager seeks out is special situations. These tend to be more diversified companies which require complex analysis to understand. Often the market shuns these companies because it simply doesn’t understand them. Sohn believes that if you’re prepared to put in the work, it can be possible to find undervalued companies with significant upside to their share price.

The manager aims to build a diversified fund including companies from each of these three categories. The proportion in each will vary, but the growth category is likely to be the biggest. The fund’s usually made up of 50-100 companies, though it currently holds 113. This reflects the manager buying and selling companies as opportunities arise.

Like most global funds, the US makes up the largest amount at 55.4%, although the fund invests less in the US compared to the benchmark. The next biggest country exposures are Taiwan, the Netherlands and China.

Over the past 12 months, a new purchase in the fund was media and entertainment company Netflix. The manager believes that Netflix doesn’t need to spend as heavily on content to grow, and its service has proven to be more of an essential, everyday purchase for consumers than the market expected.

The manager also recently invested in a company that isn’t listed on a stock market. The fund can invest in unlisted companies, although this isn’t common, and they usually make up a small part of the overall fund, with a maximum limit of 10%. Investors should be aware that unlisted companies are higher risk, and they can be considerably less liquid (their shares are harder to buy and sell) than those traded on established stock exchanges.

Sohn is comfortable selling a company once the reason he bought it in the first place has played out, even if the share price keeps rising. An example of this is semiconductor company Intel which was sold during the year.

The fund participates in securities lending whereby some of its investments are lent to others in exchange for a fee. This helps to generate additional revenue for the fund but adds risk. The manager also has the flexibility to invest in derivatives which, if used, increases risk.

Culture

Fidelity was founded in 1969 and is a global investment manager. The company remains privately owned, which means its managers can focus on the long-term interests of investors rather than short-term shareholder demands. That’s helped the firm develop an investment-focused culture, where investment ideas are openly discussed and debated, and information is shared amongst the firm’s various teams.

The company's scale means investment teams are well-resourced, and fund managers are well-incentivised. We think it's positive that all Fidelity fund managers are incentivised based on the longer-term performance of their funds. We think this aligns their interests with those of investors.

ESG Integration

Fidelity implements a structured engagement program which allows it to be systematic in its engagement on environmental and social issues. The firm votes where it is possible to do so and quarterly voting reports are posted online, complete with rationales for votes against management and abstentions.

In June 2019, Fidelity launched its own proprietary ESG ratings tool. It scores thousands of companies based on their ESG credentials on a forward-looking basis, with investment analysts tasked with the job of ensuring the ratings are up to date. The ratings system was later updated to include an assessment of each company’s ability to manage negative externalities. Fidelity also developed a climate rating which highlights companies where engagement is most necessary if the firm is to achieve its aim to halve portfolio emissions by 2030 and reach net zero by 2050.

While Fidelity has made strides forward at the firm level, we don’t think this has fully fed through to the fund level. Although there is plenty of ESG information available to all Fidelity fund managers, we’re not convinced they all put it to full use.

This fund adheres to SFDR Article 8 disclosures, which means that it seeks to achieve its investment objective while promoting, among other things, environmental or social characteristics, or a combination thereof. The fund aims to achieve an ESG score greater than the ESG score of the benchmark.

Cost

This fund is available at an annual ongoing fund charge of 1.04%. Whilst this is a little higher than some more traditional funds, we don’t think it’s unreasonable for a specialist fund such as this.

Our current platform charge of up to 0.45% per annum also applies, except in the HL Junior ISA, where no platform fee applies. From March 2026, the amount clients pay to invest with us will change. Find out more about these changes.

Performance

Since the current manager took over the fund in 2013, it’s returned 978.24%*. This is behind the benchmark’s return of 1,089.54% over the same period, but well ahead of the average fund in the IA Technology & Technology Innovation sector which returned 609.55%. As always, past performance isn’t a guide to future returns.

More recently, over the 12 months to the end of January 2026, the fund returned 13.02%. This was again ahead of the sector average return of 9.19% but behind the benchmark’s return of 16.93%.

Because of the fund’s investment style, it typically avoids investing in fast-rising companies that are driving the market. This means it may not hold some of the market’s strongest recent performers.

Not owning US semiconductor giant Nvidia has been the biggest detractor from the fund’s performance in recent years as it’s performed strongly and makes up around 18% of the benchmark. The manager believes Nvidia’s share price already reflects very high expectations, and he wants to avoid companies that have already benefitted from Artificial Intelligence (AI) enthusiasm and could be vulnerable if AI spending begins to slow.

The fund’s investment in software company Workday also detracted from performance over the past year due to weak revenue guidance and broader concerns around the software sector and AI disruption.

On the other hand, the manager’s decision to invest less in Apple and Microsoft compared to the benchmark helped the fund’s performance. Its largest holding, Taiwan Semiconductor Manufacturing Company (TSMC), was also a positive contributor. TSMC has benefited from the strong demand for chips used to power AI which has boosted its profits and share price.