Polar Capital Tech trust sees 70% share price rise over year

The £408m Polar Capital Technology Trust beat its benchmark over one year as technology stocks have benefitted from a cyclical upturn, the manager says.

The NAV of the specialist trust returned 45.4% over the year to 30 April, compared to a 39.6% return from the Dow Jones World Technology index, and 34.9% from the FTSE World.

Trust chairman Richard Wakeling says: "Technology shares outperformed in almost all markets. These developments, together with a pronounced reduction in our shares' discount to NAV, generated a rise of 67.7% in the share price over the year."

The outlook for the sector is positive, as it is typically an early beneficiary of cyclical upturns, he adds.

Ben Rogoff, the manager of the trust, says technology companies should also benefit from aggressive cost cutting during the credit crunch. 

Wakeling says: "For the first time since the 1990s, technology products and services are absorbing a growing proportion of corporate and consumer spending. This factor has contributed to the sector's dramatic earnings recovery.

"A new cycle is well underway, which will see a raft of new technologies gaining increasing adoption among both consumers and corporations."

He adds earnings growth among technology firms should outpace that of the broad market over the coming five years, "leading to an upward re-rating of a sector, which is currently valued at only a very modest premium to the market."

The trust is putting a continuation vote to shareholders as a matter of course at its next AGM.

Wakeling says the board will back continuing the trust for a further five years.

In separate news, Polar has hired Luke Boase from hedge fund Millennium Capital Partners to join the management team of its UK Absolute Return fund. He will help co-managers Philip Hardy and Nick Shenton with stock selection. He has previously  worked as an assistant fund manager, UK equities, at New Star.