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M&G to launch Global Tech fund next month

  • 01/10/1999
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M&G is aiming to launch its Global Technology fund in mid-November and, as revealed in Investment W...

M&G is aiming to launch its Global Technology fund in mid-November and, as revealed in Investment Week, the fund will be managed by Greg Kerr, currently fund manager of the American Recovery fund and head of the US desk

The investment objective is to maximise total return through investment in companies around the world with innovative products, processes or services

These investments will include, but are not restricted to, companies whose provision or use of technology gives them a strategic advantage in the market

Commission for IFAs is 3% initial and 0.5% trail for the Isa version of the fund. For the unit trust there is a choice of 3% initial and 0.5% renewal, or 4.25% initial with no trail commission

The charges on both the Isa and unit trust versions of the fund are a 1.5% annual management fee and a 5% initial fee. There are no withdrawal or exit fees

The portfolio will hold about 55 stocks. The holdings will be in mainly blue-chip technology companies and will include all the major sub-sectors such as software, hardware, telecoms and internet. The largest holdings in the model portfolio are Microsoft, Cisco Systems, EMC Corporation, IBM, Sun Microsystems, Motorola, Rohm, Novellus Systems, Analog Devices and Orange

The geographical split will be 76% in the US, 11% in the UK, 9% in Japan, 3% in Europe and 1% in the Far East. By sector, the portfolio will be 12% in telecom services, 18% in telecom equipment, 21% in hardware, 13% in software, 23% in components, 3% in the media and internet sectors, 4% in biotechnology and 6% in other categories

Kerr said: “My investment philosophy is best described as a forward looking value approach. This means we try to work out what profit a company will be making in five years. We then estimate how much the market will be prepared to pay for those profits which in turn will depend on the consistently and sustainability of the company’s growth

“As a general rule, if we think that over a five-year period we can double our money then we will make the investment. This means that sometimes we will be investing in companies that look cheap based on today’s profits and sometimes we will be investing in companies that look expensive. What we will not do is to buy companies simply because everyone else is buying them

The M&G American Recovery fund is ranked 10 out of 85 funds in the sector over one year to 13 October with a return of 53.4%, according to figures from S&P Micropal. The sector average during that time was 38.7%. Over three years, the fund is 59 out of 81 with a return of 49.8


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