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Polar Capital Technology trust has pared back long held positions in US mega-cap tech giants as manager Ben Rogoff questions whether the Magnificent Seven that dominate the US stock market can maintain their dominance. It is undoubtedly going to get harder for these companies to keep beating estimates in a very large way despite their dominance and importance in this industry.

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Despite the trust being totally focused on the AI story, Ben readily recognises the US as being expensive and that being such a narrow market it has made it tricky as an active manager. But looking forward he believes the future is looking much brighter for stock pickers who can deviate from the index.

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Ben is now shifting focus on software to hardware centric companies because as he says, “if you’re going to solve super intelligence, you’re going to need to build a lot of data centres. You’re going to keep building better AI models and if you’re going to do that, then the trajectory of power generation needs to be profoundly different.” As a result, Ben has started investing into companies that make data centre equipment as well as those involved in power generation that are poised to benefit from the AI boom.

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As an aside, whilst we at EXE Capital are not beholden to any benchmark, nor do we allocate assets geographically, but rather pick great companies regardless of where they choose to list, we are significantly underweight in the US when compared to the MSCI ACWI index.

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Comments from James Scott-Hopkins, Founder, EXE Capital Management.

The views are those of the author only. The above does not constitute a recommendation to buy the fund and advice should be sought from your financial advisor as to the appropriateness of this fund in your portfolio. The value of investments can fall as well as rise. Past performance is no guarantee of future returns.‍

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