166. Investing in a new wave of technology adoption
“It’s been a good year for returns for the technology sector, but it doesn't feel like it's been a...
An Apple a day is supposed to keep the doctor away and Apple shares are certainly doing their part to keep investor portfolios healthy in 2022.
On Monday 3 January, the US tech giant became the first publicly traded company to have a stock market value of over $3 trillion – just three and a half years after it became the first $1 trillion company and just a day before Blackberry stopped running support for its classic devices.
Apple Inc had a humble beginning – it was launched from founder Steve Job’s garage in 1976. The firm went public in 1980 with shares priced at $22, but it was after the launch of the iPhone that it really took off.
According to Reuters, Apple’s shares have risen more than 5,800% since co-founder and former Chief Executive Steve Jobs unveiled the first iPhone in January 2007, far outpacing the S&P 500’s gain of about 230% during the same period. Last year the company’s share price rose 34%*.
While other tech companies surpassed Apple’s performance in 2021 (the share price of Nvidia, the chipmaker, rose more than 125%*, Alphabet – Google’s parent – saw its share price rise more than 65%* and both Microsoft and Tesla shares gained more than 50%*, for example), they have yet to reach such dizzy-heights in valuation.
Microsoft’s stock market value currently stands at about $2.5 trillion, while Alphabet is around £1.9 trillion, Amazon around $1.7 trillion and Nvidia $700 billion*.
We take a look at four Elite Rated funds with Apple in their top ten holdings:
AXA Framlington Global Technology – 7.9%**
This is an unconstrained multi-cap fund whose investment universe includes all traditional technology sub-sectors as well as companies where technology is providing a significant competitive advantage. Manager Jeremy Gleeson has been running this fund since 2007 and has been specialising in technology stocks since 1998. He spoke to us recently on this podcast:
Artemis US Extended Alpha – 6.7%**
Manager William Warren has co-managed this fund since launch in 2014 and has been lead manager since October 2019. The fund invests in a traditional portfolio of around 60-110 ‘long’ US stocks (where the manager expects a company’s share price to rise), combined with a portfolio of 70-110 ‘short’ positions (where he aims to make money from an anticipated fall in a company’s share price).
AXA Framlington American Growth – 5.32%**
Innovation, unique brands and intellectual property are the sort of features that can give companies a competitive advantage, helping them grow into market leaders. These kinds of stories are what manager Steve Kelly and his team hope to uncover in their quest for growth stocks in the US market. This fund performs particularly well when the US market is in a growth phase.
Brown Advisory US Flexible Equity – 4.2%**
This fund has been run by Maneesh Bajaj since 2017. Its strategy is unconstrained, meaning Maneesh is free to select companies from across the market cap spectrum. This has enabled the fund to become one of the few to consistently outperform the S&P 500 over long periods of time. Maneesh spoke to us in November 2021 about some of the other holdings in the fund:
*Source: Reuters, 3 January 2022
**Source: fund factsheet, 30 November 2021