One reason for the outperformance is the low base from which the returns are measured, says Richard Clode, co-portfolio manager of the Janus Henderson Horizon Global Technology fund. “After a very tough market in 4Q2018, the starting point was low, and the big relief has been the US Federal Reserve’s [decision to keep interest rates unchanged and possibly cut them],” he says. “The trade war just hasn’t affected the fundamentals of most of the tech sector.”
SINGAPORE (July 1): On May 16, trade tensions between the US and China escalated to a new high when the former announced that Huawei Technologies was placed on the Entity List. Essentially, this means the Chinese company is subject to licence requirements for exports, effectively barring it from doing business with US companies. To soften the blow on US companies and smartphone owners, the prohibition is only set to take effect after a 90-day grace period. Yet, the conflict could worsen.
Interestingly, though, all of the technology funds available to Singapore investors have done remarkably well so far this year, despite the rising tensions between the US and China. All of the funds recorded double-digit returns above 20%, according to Morningstar data, outperforming the technology-heavy Nasdaq Composite Index’s 18.8% and, for most, the MSCI All Countries World Information Technology Index’s 22.4%. In fact, technology funds are among the top year-to-date performers in the Singapore fund universe.
