Ian Cowie: the investment trusts doing a roaring trade

Our columnist looks at names prospering despite bubble worries.

16th July 2026 11:21

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What kind of investor are you; revelling in a repeat of the Roaring Twenties or braced for another gruelling Great Depression? New technology, same old human nature; two views make a market.

Now second-quarter (Q2) earnings reports from two of the biggest microchip-makers - the Dutch giant ASML Holding NV (EURONEXT:ASML) and the even bigger Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM) - continue to divide opinion between bulls, or optimists, and bears, or pessimists.

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Never mind the macroeconomics, this small shareholder in the £8.3 billion investment trust Polar Capital Technology Ord (LSE:PCT) is delighted to see it double its share price over the last year, with total returns that are nearly twice as good as the global new technology sector index.

More precisely, during the 12 months to April 30, PCT increased its net asset value (NAV) by 102%, compared to a 55% return from the Dow Jones Global Technology Index.

PCT’s share price performed even more strongly, increasing by 109% to 603p, as the discount narrowed from 11% to 8%. Total net assets almost doubled, rising from £3.8 billion to £7.3 billion.

What a wonderful way for lead fund manager Ben Rogoff to celebrate 20 years at the helm, having run this fund since June 2006.

Here and now, Rogoff’s transition of the trust away from firms that are spending billions on artificial intelligence (AI), towards those that are banking that cash by selling semiconductors and other hardware, has paid off handsomely.

PCT holdings in the microchip-makers SanDisk Corp Ordinary Shares (NASDAQ:SNDK), SK hynix Inc ADR (NASDAQ:SKHY) and Micron Technology Inc (NASDAQ:MU) were big winners, while Seagate Technology Holdings (NASDAQ:STX) and Western Digital Corp (NASDAQ:WDC) gained from booming demand for data storage.

Other digital equivalents of selling picks and shovels to higher-profile participants in the AI gold rush included PCT stakes in businesses supplying networking equipment such as Corning Inc (NYSE:GLW), Fujikura and Celestica Inc Ordinary Shares (Subordinate Voting) (NYSE:CLS).

The latter is also the largest underlying holding in another forever fund investment trust, Canadian General Investments Ord GBP (LSE:CGI), whose shares continue to trade 40% below their NAV.

By contrast, PCT is priced only 9% below NAV but it is surprising there is any discount at all when it leads the Association of Investment Companies (AIC) Technology & Technology Innovation sector over the last year and five-year periods with total returns of 78% and 176%. It ranks second over the last decade, after delivering 911%.

Allianz Technology Trust Ord (LSE:ATT) remains marginally ahead over the decade, with a total return of 939%, but stands second over the last year and five years with returns of 64% and 140%.

Even so, it would be silly to make too much of the differences between these two terrific trusts, when shareholders in both have good reasons to be cheerful.

From a purely personal point of view, this long-term investor transferred PCT shares from a paper-based broker in September 2013, when they were priced at 43p each, after allowing for a subsequent 10-for-one stock split. They were trading at £6.53 on Thursday.

So, PCT - and ATT - serve as extreme and specific examples of the dichotomy that divides investors. Do you believe new technology is changing our world and want to own a stake in the future? Or do you believe it is all an over-blown bubble that will burst soon?

Of course, it is too soon to tell for sure and a great deal will depend on when you bought and sold. Neither PCT nor ATT pays any dividend income, so it is all about capital gains or losses.

However, this long-term investor who couldn’t tell one end of a graphics processing unit (GPU) from another is only too happy to pay annual charges of 0.69% (or, potentially, 0.62% at ATT) for professional stock selection to gain exposure to this high-growth sector.

By contrast, spare a thought for the clever dicks and smart alecs who have been calling the top of the tech boom all the way up.

Even if this ends in an almighty bust, possibly something similar to the Great Depression that began in 1929,  it is difficult to see how they will have gained by sitting out the Roaring 2020s, when others got up and danced.

No wonder City cynics say bears sound clever but bulls make money.

Ian Cowie is a freelance contributor and not a direct employee of interactive investor.

Ian Cowie is a shareholder in Canadian General Investments (CGI) and Polar Capital Technology as part of a globally diversified portfolio of investment trusts and other shares.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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