This large-cap bias and favoured tech sector also leads Wintle to hold everyone’s favourite and most overused acronym of stocks, the ‘Fangs’.
There is no reason why the big-cap players can’t continue to dominate their respective industries, Wintle argues.
“People talk about Fang stocks like they are the only thing working in the stock market. They aren’t.”
He adds: “It’s easy to say ‘everyone knows about these stocks, we all use them, therefore that’s a reason not to invest’, but that doesn’t make sense to me.
“Google listed in 2004, and it’s still growing revenues of 20%, not earnings per share (EPS) but revenues. This is crazy for one of the biggest companies in the world.”
However, Wintle has stopped short of investing in TV streaming service Netflix, a “one trick pony” he fears could unexpectedly lose 25% or more in a day.
The likes of artificial intelligence (AI) means we haven’t seen the peak of technology firms yet.
“We could quite easily get to Terminator 2 territory,” he jokes. “But in real terms it means accelerating processes that require computing power and making them smarter. It’s here and it’s just going to get a lot more pervasive, and what’s interesting about the likes of AI is how it is going to be used in medical tech and how diseases work.
“But that’s tomorrow. Today’s story is equally as compelling and I’m a big believer that the large-cap titans of the digital world are going to keep on winning from an investment perspective. They have installed bases that are difficult to replicate.”
Self-confessed bull
Away from the Fangs, Wintle has also discovered a big opportunity in the computer games sector, where the prospects for growth are huge.
Video game competitions such as The League of Legends, where players compete for large sums of money in front of audiences larger than that of American basketball, are a clear sign of the direction in which the games industry is heading, Wintle says.
The fund also has exposure to the consumer discretionary sector, yet once again favours those companies that have managed to harness digital technology and recognised the power of the internet.
“Consumer discretionary is a big holding, but there are large parts I’m not interested in going near and they’re the businesses being disrupted by Amazon.”
