Which fund will give speedy returns?
FOR most investors, the best way to get exposure to 5G is via an investment trust or investment fund with a technology bent.
Investment house Polar Capital has three technology-orientated funds that all have significant 5G exposure – stock market-listed Polar Capital Technology and investment funds Global Technology and Automation & Artificial Intelligence.
Nick Evans, part of Polar Capital’s technology team, describes 5G as ‘an important theme’ although he believes the roll-out of 5G has paused for breath in both China and the United States, in part as a result of trade wars and American concerns over Huawei.
He says beneficiaries will include Apple – when it launches 5G iPhones. He adds: ‘We expect Apple will see a tailwind from these higher priced phones and a shortening of phone replacement cycles.’ But he warns some of this 5G effect has already been captured in the company’s strong share price performance over the past year. He also says the benefit of higher download speeds ‘may’ extend to other companies such as Netflix and Spotify.
Both Apple and Samsung – another big 5G participant – are top 10 holdings in investment trust Polar Capital Technology.
Enthused though Polar Capital is by 5G, Evans says there is a lot of ‘hype’. He add: ‘We certainly consider 5G as a core theme in our three funds. But it is just one of many with strong growth prospects.’
Walter Price, manager of Allianz Technology Trust, has Apple and Samsung among the fund’s top ten holdings. He also believes
FTSE 100 digital specialist Aveva could be a long-term winner as 5G enables it to encourage businesses to embrace artificial intelligence and the internet of things. According to Dzmitry Lipski, head of investment research at wealth platform Interactive Investor, other investment trusts with portfolio exposure to 5G include Murray International and North American Income.
Both have key stakes in American telecoms giant Verizon Communications.
Herald also has exposure to 5G through holdings such as Nasdaq-listed Akoustis Technologies. It specialises in acoustic wave technology that ensures mobile smartphones can operate at high speed.