Fund managers strike out
Fund managers rolling out tech funds couldn’t have picked a worse time.
Fund managers rolling out tech funds couldn’t have picked a worse time.
The flood of technology funds which hit the Australian market in early March im-mediately preceded one of the most turbulent periods in equity markets in recent memory. Technology funds and small cap funds have been hit hard by the dramas unfoloding on the New York and local stock markets, some falling as much as 20 per cent in the first four weeks of the month.
But the funds management industry’s thirst for the techno9logy sector has not abated. In a brave move, Dresdner is to roll out a global technology fund within the next two months. Named the Dresdner RCM Global Technology Fund, it will be available to both retail and wholesale investors.
Dresdner managing director Peter Rayner says there is still demand for the fund as the technology story has not yet run its race.
Rayner’s confidence seems to be spread throughout the sector.
BT Funds Management TIME Fund portfolio manager David Mills says the timing of its launch wasn't the best, coming on the day the Nasdaq peaked.
"In an ironic sense, the timing was perfect but since then we've dropped about 7 per cent while the Nasdaq is down by around 28 per cent."
"Almost anytime is a good time to get into this sector, except in the last six weeks, and it would have been nice to get some more performance before the hit.
Colonial head of investments and market research Hans Kunnen also regrets the timing but sees the road ahead as good as that already travelled.
"We wish we had done this a year earlier, for the better returns, but this develop-ment of the technology and telecommunications sector is here for a while," Kunnen says.
According to Colonial marketing services chief Joanna Wagstaff, inflows have settled back following a huge influx earlier this year.
Inflows at BT have remained steady and have reached $125 million as some in-vestors have come in looking for bargain buying opportunities. At the same time-However van Eyk research managing director Stephen van Eyk says fund manag-ers need to be careful.
"The issues learnt over time haven't been picked up by some of the young players in this sector. The johnny-come-lately's who came up with a technology fund be-cause marketing said it needed one are just starting to work through these issues," van Eyk says.
AUTHOR
Jason Spits
Recommended for you
Pendal has told investors it will start winding up its Enhanced Credit fund from December, its third fund closure this year.
A potential acquisition of Platinum Asset Management by Regal Partners will be beneficial for the “challenged” fund manager, believes Morningstar, but it has warned fund management mergers don’t always run smoothly.
Fund managers made a “big shift” into bond-sensitive sectors like utilities in September and away from cyclicals, while risk appetite is at an 11-month low.
Ahead of the RBA’s upcoming monetary policy meeting next week, BlackRock Australasia has reaffirmed the market’s view that rate cuts are likely out of the picture for 2024.
