Companies successfully engaging with artificial intelligence now, ahead of a decade-long implementation of the theme, are best placed to enhance their economic moats over time, says Sanlam Artificial Intelligence fund manager Chris Ford.
In the latest Portfolio Adviser video interview, Ford explains how “the investable universe will continue to get broader, deeper and better over time as more AI examples bubble into the economy”.
But he points out that contrary to popular opinion, the strategy is not a pure-play technology fund nor is it a north American equity fund or a systematic fund.
“Essentially, it is a very plain vanilla global equity fund, long-only, with this gale of a tailwind blowing at its back,” he says.
Ford thinks to “ghettoise” the fund in one part of the market is to “fundamentally misapprehend the nature of the breadth of the opportunity set available”.
Tech represents about 40% of the portfolio but Ford says there are good examples of implementation of AI systems across the economy, not least in healthcare, industrial services, and industrial capital goods.
“It’s not to say we don’t participate in the tech space, we do, but we think we can provide a much better diversified portfolio by making sure we have our eyes open right the way across the sectors rather than just staying within a small part of the market.”
Ford also tackles high valuations in the tech space and where the opportunities lie for future growth in areas such as medical technology, and how the AI phenomenon is not just restricted to consumer stocks such as Netflix and Ocado.
Finally, he touches on what the fund’s recent move from Smith and Williamson to Sanlam means for the team and the process.
View the video above for more and find other PA videos here.
