The Global Innovation team believes we are in the early stages of a new technology cycle driven by AI. This has the potential to rapidly increase productivity, earnings and growth for the winners of this transformation, which will be both leaders and disruptors.
Why invest in technology?
- AI has the power to be transformational; it is already driving company fundamentals including earnings and share prices
- AI will drive productivity growth in most sectors and a new wave of innovation across the economy
- The winners from the new technology cycle will be from across the stock market, from mega to small caps
- High-quality and profitable companies are to be found across the technology sector. By high quality, the team means higher sales growth, higher return on invested capital and lower debt
- Magnificent Seven stocks are not expensive with an average Price/Earnings-to-Growth (PEG) ratio of 0.70%
- The forward price-to-earnings (P/E) ratio of the S&P IT sector is 1.3 times that of the S&P 500 compared to 3 times at the height of the TMT (technology, media and telecommunications) bubble in 1999
- The performance of technology companies has been broad based: 60% of MSCI World Technology index stocks beat the index in 2023, the share prices of 31 of these stocks rose more than 50%, and the performance of the top 20 stocks of the rest of the index equalled that of the Magnificent Seven
The Rise of AI: Digital Report
The technology sector is undergoing huge change and evolution, driven by the rise of artificial intelligence. In this digital report, the Liontrust Global Innovation team examines the new technology and innovation cycle, discusses the opportunities for investors and the statistics supporting their views about the optimistic outlook, and independent experts explain why AI is the topic of the future.
Why the Liontrust Global Technology Fund?
- Since manager inception, the Liontrust Global Technology Fund returned 58.8% against 44.6% by the MSCI World Information Technology index and 38.9% by the average of the IA Technology and Telecommunications sector over the 2023 calendar year (Source: FE Analytics, as at 31.12.23. Primary share class performance, C Accumulation GBP, total return, net of fees, interest/income reinvested)
- In managing the Liontrust Global Technology Fund, Storm Uru and James Dowey of the Global Innovation team seek to generate strong returns by investing in innovative companies. They believe that innovation is the single most important driver of stock returns
- The team believes innovative companies deliver superior operational performance over the long run
- Innovation is complementary to the traditional investment styles of value and quality, and a key part of an investment portfolio in the 21st century
- Not every great innovation is a great investment. The investment process judges innovation on whether it can create genuine value for customers
- The team invests in innovative companies with four characteristics: innovation, barriers to competition, strong management and high cash returns on capital
- Around 40% of the Liontrust Global Technology Fund is invested in mid and small caps
- The Fund has an active share of around 75%
Fund Manager Insights
Key fund literature
Discrete performance (%)
| To previous quarter 12 months ending: | Jun 24 | Jun 23 | Jun 22 | Jun 21 | Jun 20 |
|---|---|---|---|---|---|
| Liontrust Global Technology | 42.0 | 29.1 | -19.5 | 29.1 | 27.4 |
| IA Technology & Technology Innovation | 30.0 | 21.1 | -20.7 | 33.2 | 30.7 |
| MSCI World/Information Technology | 38.9 | 30.7 | -8.2 | 27.7 | 36.7 |
| Quartile Ranking | 1 | 1 | 2 | 4 | 3 |
How to Invest
These are the different ways you can invest in our funds:
Contact us
Head of UK Client Service
UK Client Service – London
UK Client Service – Midlands and the North
UK Client Service – South
