RCM Technology Trust PLC – a specialist’s pursuit
We believe technology is different; backing future market leaders early is all important because, in technology, the rewards filter through to the few. For these reasons, the RCM Technology Trust PLC is managed by RCM’s experienced US-based global technology team who have specialist research resources and a deep knowledge of both technology and technology companies.
Aim
The Trust’s objective is to achieve long-term capital growth by investing principally in the equity securities of quoted technology companies on a worldwide basis with the aim of achieving long-term capital growth.
History
The Trust was launched in December 1995 as a way for investors to gain exposure to quoted technology companies on a worldwide basis with the aim of achieving long-term capital growth. The Board appointed RCM to manage the trust’s assets from April 2007. The decision was based on the performance of RCM’s US-based technology team, their experience and RCM’s depth of expertise in the management of investment trusts.
Risk & Features
Investment trusts are quoted companies listed on the London Stock Exchange. Their share prices are determined by factors including the balance of supply and demand in the market, which means that the shares may trade below (at a discount to) or above (at a premium to) the underlying net asset value.
Competition among technology companies may result in aggressive pricing of their products and services, which may affect the profitability of the companies in which the Trust invests. In addition, because of the rapid pace of technological development, products or services developed by these companies may become rapidly obsolete or have relatively short product cycles. This may have the effect of making the Trust’s returns more volatile than the returns of a fund that does not invest in similarly related companies.
Investment trusts can enhance returns through gearing. This can boost a Trust’s returns when investments perform well, though losses can be magnified when investments lose value. This Trust does not currently employ gearing.
(i) Share price source: Lipper, as at market close mid price.
(ii) A trust’s net asset value (NAV) is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. An undiluted, cum-income NAV is shown.
(iii) The Performance Fee is calculated as 20 per cent of the outperformance of the net asset value per share.
RCM Technology Trust PLC is incorporated in England and Wales. (Company registration no. 3117355). Registered Office: 155 Bishopsgate, London, EC2M 3AD. VAT registration no. 678 1784 81. The Company is a member of the Association of Investment Companies - Category: Sector Specialists - Technology, Media & Telecoms.
Manager's Review as at 30.07.2010
July was a strong month for technology stocks and for the RCM Technology Trust. As earnings reports for the second quarter came in, investors realised that concerns about the weak Euro and high unemployment in the US were not affecting most technology companies. The Q2 reporting season proved healthy with earnings outpacing guidance and estimates while company outlooks were better than feared. The Trust's NAV returned 3.74% (TR) outperforming its benchmark the DJTM W. Tech $- TR Index (GBP) which returned 2.49%
The communications equipment sector led the performance of the index. Though the Trust was slightly underweight the communications sector, stock selection added significant value during the month, led by gains in F5 Networks and in Riverbed Technology. F5 and Riverbed are beneficiaries of data center consolidation, one of the strongest trends in corporate spending this year. Leaders in cloud computing also performed well and we also had good performance from our holdings in the LED lighting area, including Cree and Aixtron. Detractors from performance included stocks of some companies that did not provide sufficient upside on their Q2 results. Akamai Technologies declined during the month after an aggressive run-up when the Q2 result did not meet elevated expectations surrounding video streaming of World Cup content to the web. In some cases we adjusted our holdings where we felt the disappointments would continue.
As we look to the remainder of 2010, we seem to be at a critical junction, with widespread fears of a disappointing recovery in the press. However, as was exhibited during the Q2 earnings season, businesses remain healthy and are spending capital on new technologies aimed at improving efficiency and reducing cost structures. We remain excited about many product cycles within technology, both on the consumer and the enterprise side.
Trust Manager
Walter Price CFA,
Managing Director,
Senior Analyst
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Walter Price is a CFA charter-holder, Managing Director, Senior Analyst, and Portfolio Manager on the RCM technology team in San Francisco. Walter received his BS with Honours in electrical engineering from M.I.T. and his BS and MS in management from the Sloan School at M.I.T. In 1971 he joined Colonial Management, an investment advisory firm in Boston, where he became a senior analyst responsible for the chemical industry and the technology area. He joined RCM in 1974 as a senior securities analyst in technology and became a principal in 1978. Since 1985, he has had increasing portfolio responsibility for technology stocks and has managed many technology portfolios. Walter is a current Director and past president of the M.I.T. Club of Northern California. He also heads the Educational Council for M.I.T. in the Bay Area and is a past Chairman of the AIMR Committee on Corporate Reporting for the computer and electronics industries.
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The information contained herein including any expression of opinion is for information purposes only and is given on the understanding that it is not a recommendation and anyone who acts on it, or changes their opinion thereon, does so entirely at their own risk. The opinions expressed are based on information which we believe to be accurate and reliable, however, these opinions may change without notice.
(i) Share price source: Lipper, as at market close mid price.
(ii) A trust’s net asset value (NAV) is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. An undiluted, cum-income NAV is shown.
(iii) The Performance Fee is calculated as 20 per cent of the outperformance of the net asset value per share.
RCM Technology Trust PLC is incorporated in England and Wales. (Company registration no. 3117355). Registered Office: 155 Bishopsgate, London, EC2M 3AD. VAT registration no. 678 1784 81. The Company is a member of the Association of Investment Companies - Category: Sector Specialists - Technology, Media & Telecoms.
Changes in rates of exchange may cause the value of investments and the income from them to go down or up. Source: RCM (UK) Ltd, all data as at 30.07.2010
(i) Share price source: Lipper, as at market close mid price.
(ii) A trust’s net asset value (NAV) is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. An undiluted, cum-income NAV is shown.
(iii) The Performance Fee is calculated as 20 per cent of the outperformance of the net asset value per share.
RCM Technology Trust PLC is incorporated in England and Wales. (Company registration no. 3117355). Registered Office: 155 Bishopsgate, London, EC2M 3AD. VAT registration no. 678 1784 81. The Company is a member of the Association of Investment Companies - Category: Sector Specialists - Technology, Media & Telecoms.
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(i) Share price source: Lipper, as at market close mid price.
(ii) A trust’s net asset value (NAV) is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. An undiluted, cum-income NAV is shown.
(iii) The Performance Fee is calculated as 20 per cent of the outperformance of the net asset value per share.
RCM Technology Trust PLC is incorporated in England and Wales. (Company registration no. 3117355). Registered Office: 155 Bishopsgate, London, EC2M 3AD. VAT registration no. 678 1784 81. The Company is a member of the Association of Investment Companies - Category: Sector Specialists - Technology, Media & Telecoms.
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