Gam is unique for swapping out the benchmark for its Star Technology fund to reflect changes between established and new players in the industry, a move that other rivals are reportedly not considering.
The $270m (£206.8m) fund, led by Mark Hatwin and his team, will now be measured against the MSCI World Growth Index instead of the MSCI World Information Technology Index.
Following the move the fund will be renamed from Gam Star Technology to Gam Star Disruptive Growth.
The Swiss manager said the changes reflect the fact that index providers have been repositioning traditional tech names, including some of the biggest stocks like Google, Facebook and Amazon, into non-technology sectors.
The S&P 500 was one such provider to shake up its sector classifications with the addition of a communication services sector which became home to all but one of the Faang stocks.
“As a result, pure technology indices no longer fully capture the full scope of technological developments currently disrupting industries beyond traditional technology,” Gam said.
Rivals not thinking about switching benchmarks
AJ Bell head of active portfolios Ryan Hughes said the situation at Gam is unique and the first instance he’s seen of a tech fund changing its benchmark from a dedicated tech sector to broader growth sector.
He points out that there haven’t been any discussions at rival fund Polar Capital Global Technology over whether it should change it benchmark from the MSCI World IT index.”I don’t see other groups saying they need to change the way they invest.”
Despite this Hughes notes there has been a palpable shift in the tech market between established companies like the Faangs and new tech, companies that are focusing on things like AI, automation and robotics.
Gam not dominating performance tables
Gam said there would be no change to the fund’s investment strategy with Hatwin’s team continuing to actively select companies benefiting from growth opportunities and disruptive themes in areas like software, cloud infrastructure, social media and advertising.
The fund has continued to lag rival dedicated tech funds in the compact IA Technology & Telecommunications sector.
The Polar Capital Global Technology fund has returned 220.6 % to investors over five years compared with the Gam Star Disruptive Growth’s 146.7%, and the Fidelity Global Technology and Axa Framlington Global Technology funds have delivered returns of 216.1% and 197.1%.
Tech fund performance
| 3y (%) | 5y (%) | |
| Polar Capital Global Technology | 103.0 | 220.6 |
| Herald Worldwide Technology | 96.7 | 177.1 |
| Axa Framlington Global Technology | 95.2 | 197.1 |
| Liontrust Global Technology | 91.3 | n/a |
| L&G Global Technology Index Trust | 88.4 | 184.1 |
| Janus Henderson Global Technology | 87.1 | 174.0 |
| Fidelity Global Technology | 85.6 | 216.1 |
| Gam Star Disruptive Growth | 82.9 | 146.7 |
