For financial professionals in Italy

The case for technology equities

Alison Porter

Alison Porter

Portfolio Manager


Richard Clode, CFA

Richard Clode, CFA

Portfolio Manager


Graeme Clark

Graeme Clark

Portfolio Manager


30 Aug 2022
1 minute read

Key takeaways:

  • Technology is a positive force for innovation and disruption. It offers solutions to inflation due to its ability to create efficient products and automate production processes, and can also drive positive change in sustainability matters.
  • Successful tech companies tend to self-fund via their own profits and generally have less debt. These companies reinvest earnings to drive growth and capture market share – this is known as the flywheel effect.
  • The ability to pick the right point in the technology adoption curve, select the right companies and invest at the right valuation are key to generating consistent returns in tech.

Technology by nature is an innovative, disruptive and deflationary force, making things faster, cheaper, and more efficient. This means it can offer a solution to inflation, combatting higher input and labour costs given its capability to enable automation and create more efficient products and services. Technology companies also play a key role in sustainability. The major challenges faced by the world today such as climate change, resource constraints and poverty & inequality are all leveraging on innovative new technology for solutions.

Although the sector is characteristically volatile by nature, multiple secular growth themes that are driving technology demand give rise to some undeniably attractive opportunities for investors.

View PDF

 

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

The information in this article does not qualify as an investment recommendation.

 

Marketing Communication.

 

Glossary

 

 

 

The Janus Henderson Horizon Fund (the “Fund”) is a Luxembourg SICAV incorporated on 30 May 1985, managed by Henderson Management S.A. Henderson Management SA may decide to terminate the marketing arrangements of this Collective Investment Scheme in accordance with the appropriate regulation. This is a marketing communication. Please refer to the prospectus of the UCITS and to the KIID before making any final investment decisions.
    Specific risks
  • Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • If a Fund has a high exposure to a particular country or geographical region it carries a higher level of risk than a Fund which is more broadly diversified.
  • The Fund is focused towards particular industries or investment themes and may be heavily impacted by factors such as changes in government regulation, increased price competition, technological advancements and other adverse events.
  • This Fund may have a particularly concentrated portfolio relative to its investment universe or other funds in its sector. An adverse event impacting even a small number of holdings could create significant volatility or losses for the Fund.
  • The Fund may use derivatives with the aim of reducing risk or managing the portfolio more efficiently. However this introduces other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
  • If the Fund holds assets in currencies other than the base currency of the Fund or you invest in a share/unit class of a different currency to the Fund (unless 'hedged'), the value of your investment may be impacted by changes in exchange rates.
  • When the Fund, or a hedged share/unit class, seeks to mitigate exchange rate movements of a currency relative to the base currency, the hedging strategy itself may create a positive or negative impact to the value of the Fund due to differences in short-term interest rates between the currencies.
  • Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
  • Some or all of the ongoing charges may be taken from capital, which may erode capital or reduce potential for capital growth.
  • The Fund could lose money if a counterparty with which the Fund trades becomes unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.
Alison Porter

Alison Porter

Portfolio Manager


Richard Clode, CFA

Richard Clode, CFA

Portfolio Manager


Graeme Clark

Graeme Clark

Portfolio Manager


30 Aug 2022
1 minute read

Key takeaways:

  • Technology is a positive force for innovation and disruption. It offers solutions to inflation due to its ability to create efficient products and automate production processes, and can also drive positive change in sustainability matters.
  • Successful tech companies tend to self-fund via their own profits and generally have less debt. These companies reinvest earnings to drive growth and capture market share – this is known as the flywheel effect.
  • The ability to pick the right point in the technology adoption curve, select the right companies and invest at the right valuation are key to generating consistent returns in tech.