As I hope readers know (I’ve declared my interest enough times!) I am a director of RCM Technology Trust plc (RTT) which is quoted on the London Stock Exchange. Yesterday we had a board meeting to sign off our annual report which was issued today.
I joined what was then the Finsbury Technology Trust in Jan 2007 and one of our first decisions was to look for a new fund manager. After a ‘Beauty Parade’ we selected Walter Price and his team from RCM. They were appointed in May 2007 and the trust renamed RTT. The role of the board is not to tell the manager what to buy or sell! Other board members are experts in Investment Trusts but I hope my contribution is questioning the manager on his general tech investment strategies which I do ‘robustly’ at every board meeting.
Since appointing the new managers, we have turned a rather underperforming fund into one that has outperformed. Since the date of their appointment in May 2007, RTT’s NAV has increased by around 60% compared to a 40% increase in the Dow Tech Index which is used as the benchmark. I have been a RTT shareholder since my appointment – indeed, RTT is the largest individual holding I have. Nothing like putting your money where your mouth is! But, as you can see, it has so far been a wise move. RTT 60% up - FTSE100 down 7.5% in period since 1st May 2007!
In the last FY, the out-performance was even better with a 33% rise compared to an 18% rise in the benchmark. The outperformance has continued since the year end. At present the top five holdings (out of about 60) are Apple (surprise, surprise) Amazon, First Solar, Baidu.com (China’s leading search engine) and Riverbed (WAN optimisation)
As they say, past performance is no guarantee of future performance. As you will read in the R&A, Walter is cautious; believing that expectations (and therefore valuations) in some sectors are too high. Walter notes that “the valuations of many cloud computing holdings have become somewhat over extended”. Indeed he has trimmed RCM’s holdings in Cloud for that reason. Walter rightly cautions that share prices will be uber sensitive to expectations – miss them and you’ll really get hammered! Walter notes that not all the 130 tablets launched at the recent CES are likely to be successful! Consumer spending on tech will clearly be affected by the general financial environment. This, and the move to ecommerce, could have ‘a very negative effect on traditional resellers”.
You can access a full copy of the Annual Report, Factsheet etc at RCM Technology Trust.