Why now is the time to buy tech trusts

Successful performance and profitable returns from the technology industry look set to stay, according to Tom Tuite-Dalton of Oriel Securities.

"The tech sector is one of the few likely to exhibit sustained earnings growth in a recessionary environment, as consumers and corporates use ever more easily accessible internet applications to save both money and time," he said.

The comments follow Facebook’s announcement last week that it will list on the New York Stock Exchange.

Tuite-Dalton also believes that star manager Warren Buffett’s acquisition of his first technological company is a clear indication that the sector is entering an age of prosperity.

"At the large end of the market cap spectrum, Warren Buffett’s purchase of IBM, his first tech investment, suggests that shrewd value investors now view some tech companies as being safe long-term investments."

Tuite-Dalton points to Herald and Polar Capital Technology as among the best trusts in the sector. Anyone investing £1,000 in Polar Capital Technology five years ago would now have £1,475. The trust has nearly 10 per cent of its £462m assets under management in Apple, the world’s largest company.

Ben Rogoff, manager of the Polar Capital Technology Trust, believes the tech industry’s recent positive performance stems from learning from past mistakes.

"The technology industry had to reinvent itself in the 90s," he said. "Hard profitability has come a long way since then, with companies such as Microsoft driving revenue growth."

Rogoff says that technological advances have made the market a more interesting place to invest.

"One reason why the sector has strengthened is because the software and internet industry have become vastly more important within the technology industry. We believe an opportunity for investors is in internet applications, for example the smartphone penetration of the market and the demand for Wi-Fi."

A recent FE Trustnet article also highlighted Polar Capital’s technology trust as one of the best on the market.