Tom Moore, UK equity fund manager at Aberdeen Standard Investments, says some of the companies that are in the FTSE 100 and may be viewed as “old economy” are actually exposed to some of the major “new economy” trends, and he cites mining companies that produce copper, which is used in the manufacture of electric vehicles.
Louise Kernohan, UK equity fund manager at BNY Mellon, says technology is less than 2 per cent of the UK index, “and if you were starting from a blank sheet of paper as a fund manager you would have more than 2 per cent in tech".
She continues: "And while in the short term the banks and miners might do well as economies recover, over the longer term the technology and healthcare companies will do better. Sage is an example of a UK technology company that is changing and becoming a cloud computing provider, but its valuation is that of a company the market views as slightly troubled, and that is an opportunity.”
Paul Hookway, senior fund analyst at Kleinwort Hambros, says: “The UK market has a lack of technology exposure – only 1 per cent of the FTSE 100 compared to the S&P500’s 23 per cent.
"While there are 170 listed technology companies in the UK, the vast majority are new start-ups fuelling some of the UK’s most successful sectors such as digital, healthcare, creative entertainment and financial services, to name but a few. Gaining exposure to these interesting ideas sectors is not straightforward for retail investors, though there are two investment trusts, Herald and Augmentum Fintech, which could fill the gap, whilst mid-cap technology companies such as Softcat, Computacenter, GB Group, Avast and Blue Prism, offer the best return offerings. Further down the cap scale, dotdigital and Keywords Studios, would also offer good exposure.”
Alex Game, who runs the Unicorn UK Growth fund says: “Whilst the technology sector represents a relatively small portion of the FTSE 100, comprising five stocks, the investible universe expands materially further down the market-capitalisation scale.
"In part this can be attributed to the strong and growing ecosystem for earlier-stage technology companies to access growth capital in the UK. In fact, the UK ranks third in the world for technology venture capital investment, hitting a record high of $15bn (£10.6bn) in 2020 despite the obvious challenges posed by the pandemic.
"That is not to say that all companies within the sector are at an earlier stage and higher risk. Of the 164 investible technology companies listed in the UK, over a third generated profits in excess of £1m over the last twelve months [according to Bloomberg], providing investors with opportunities across the risk spectrum.
