Polar Capital Technology Trust has reported a net asset value (NAV) fall of 7.3% to £2.83bn for the full year ended 30 April.
This represents a slight improvement on the 10.5% fall in the previous year, but still reflects a tough period for tech focused investors. NAV per share was down 2.8%.
The trust’s closing share price was 4.9% down for the year at £19.40 versus a 2.9% rise in its benchmark, the Dow Jones Global Technology Index.
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Shares in the trust reacted well to the update, rising 2.8% to £22.98 in Wednesday morning trading.
The tech sector has already seen a strong bounce from the rate hike induced pullback. While it came too late to undo the damage, it gives reason for the trust to be optimistic about the year ahead.
“For 2023, the technology sector is expected to deliver revenue and earnings growth of 1.4% and 0.8% respectively,” noted managers Ben Rogoff and Ali Unwin. Although this compares unfavourably with the market, which is forecast to grow revenues and earnings 2.4% and 1.1% respectively, the technology sector is expected to revert to more typical above-market growth in 2024 with revenues and earnings progress currently pegged at 8.7% and 16.3% year on year.
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Of particular interest to the trust is the Chat GPT inspired boom in AI.
“We believe that there are interesting and exciting times ahead for our sector, particularly in the field of Artificial Intelligence,” Chair Catherine Cripps said.
“Given the recent breakthroughs in AI we remain positive on the outlook and the future of technology, despite a challenging macro backdrop. We look forward to the investment opportunities this brings for the sector, which looks well placed to benefit from AI disruption.”
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Rogoff and Unwin added: “Artificial intelligence also has the potential to become a transformative ‘general purpose technology’ (GPT) which -like electricity, steel, and the internet – may reshape economies, drive innovation and create new opportunities.
“If so, history suggests that bold, early predictions about AI may prove extremely conservative. Not just because humans struggle with non-linear change (an observation that has long informed our investment approach) but also because as yet unknown technology improvements subsequently transform the opportunity set.”
