20th Jul 2022 08:32
(Alliance News) - Polar Capital Technology Trust PLC on Wednesday said it underperformed its benchmark in financial 2022 due to inflationary pressures and a lack of investor appetite for growth stocks.
The London-based investment trust said its net asset value per share stood at 2,305.13 pence as at April 30. This reflects a decline of 7.7% from 2,496.44p on the same date a year before.
The company underperformed its benchmark, the Dow Jones World Technology Index, which only fell by negative 0.9%.
The company cited inflationary concerns, rising bond yields, and a "significant concentration of performance in the largest capitalisation stocks and a rotation from growth to value," as reasons for its underperformance.
"[I]nvestors continued to invest in recovery stocks rather than growth stocks and the concentration of performance continued. The share prices of technology stocks suffered in this environment, although corporate performance remained strong," Chair Sarah Bates said.
The trust declared no dividend for financial 2022, unchanged from the year before.
Looking ahead, Polar Capital Technology warned of further uncertainty.
"At this point, many tech companies are not reporting significant impacts on their trading, but we are aware that company reports can be indicators of the current state, rather than of future problems," Bates continued.
"However, we do think the basic disruptive opportunities for the companies in our portfolio persist, and we support our manager's view that we should stick to the fundamental principle that investing in the potential growth in our sector will remain profitable over time."
Shares were trading 2.2% higher at 2,65.33 pence each on Wednesday morning in London.
By Abby Amoakuh; [email protected]
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