The FSA Spy market buzz – 19 May 2023
HSBC Private Bank is hiring, an AI ETF comes to market, Nasdaq rally, top performing funds, venture capital woes, Dimon’s ironic short ban, Alibaba’s cloud is freed and much more.
While technology stocks have become one of the clear winners this year, investors have become concerned about whether the rally in the sector is sustainable moving forward, especially since valuations have become more expensive.
In addition, after news of the vaccine development, value names are starting to make a comeback and are also expected to perform well in the following year.
That said, a number of wealth and asset managers are advising clients to not sell all their technology-related holdings, but instead have a balanced portfolio consisting of growth and value names.
For example, Stéphane Monier, chief investment officer for private banking at Lombard Odier, said recently that while value names are expected to perform in 2021, the “trend toward technology is still clear”.
“Quality names in the sector continue to have strong fundamentals,” he said.
JP Morgan Asset Management also expects a sector rotation, but continues to expect the tech sector to deliver returns.
“This is because many of these tech companies are still expected to deliver long-term value to shareholders,” Tai Hui, Asia chief market strategist at JP Morgan AM, said recently.
UBS Wealth also shared the same view, particularly on Chinese technology companies.
Against this backdrop, FSA asked Samuel Meakin, associate director for equity fund strategies at Morningstar, to compare two global technology products: The Blackrock Global Funds (BGF) – World Technology Fund and the Janus Henderson Horizon Global Technology Leaders Fund.
|Manager/s||Tony Kim||Alison Porter, Graeme Clark, Richard Clode|
|Three-year cumulative return||156.60%||80.26%|
|Three-year annualised return||35.86%||21.09%|
|Three-year annualised alpha||8.94||-0.78|
|Three-year annualised volatility||24.37||21.66|
|Morningstar analyst rating||Bronze – Silver||Neutral|
|Morningstar star rating||*****||****|
|FE Crown fund rating||*****||**|
Part of the Mark Allen Group.