He points out that Nasdaq is the best performing global market in 2013 with the exception of Japan and says that the strength of technology is pulling up related sectors, such as healthcare and media. Some of the trust’s top-performing stocks for the year to date have been driven by the growth in digital technology – Daily Mail & General, for example, plus Reed and Fidessa.
He adds: "We still see strategic value in all our Tech holdings and are happy to add to them. The UK may not be able to boast a Facebook, Google or Twitter, but we can table the world’s most visited online newspaper (MailOnline), the providers of must-have online tools for the global academic, legal, investment banking and mining industries (variously Reed, Fidessa and Euromoney) and a respected provider of accountancy software services to small companies right around the world (Sage)."
He is still supportive of Pearson despite recent weakness in the share price. He says that the valuation is undemanding and it remains at the forefront of a significant change in education. He adds that education is digitising and Pearson is the biggest such provider in the US, which is where the technology transformation is most advanced. He believes there is ‘lots of upside’.
Train argues that there are plenty of reasons to continue holding equities, despite their recent strong run, though does not discount the possibility of a short-term set-back in markets. He has been adding to his and his wife’s holdings in the trust recently and is also topping up on the London Stock Exchange in expectation that the ‘great rotation’ will kick in to support equity flows.
He says that the three major themes in the portfolio – technology, branded consumer goods and stock market proxies – "remain fresh and are likely to drive wealth creation in the economy for years to come." He also points to strong dividend growth – 7% across the portfolio as a whole, on a starting yield of 3% – as supportive of equity valuations as they stand.