So now we know! After all the rumours doing the rounds over the weekend, news is out that the Gallagher brothers are to reunite for an Oasis tour in 2025 with a series of dates planned. But what’s that got to do with the world of investment?
In this analysis, Rob Morgan, Chief Investment Analyst at Charles Stanley, has been reflecting on which funds and sectors have been the Champagne Supernovas since Oasis split up back in 2009 and whether we can expect big tech to keep performing so strongly in the months and years ahead. Or if it’s a case of definitely maybe.
The top performing fund since the Gallagher brothers went their separate ways is L&G Global Technology Index Trust, illustrating that investors have been best served by prioritising big tech stocks over the past fifteen years. Over that time, it has turned a £1,000 investment into £14,850.
Technology stocks have powered global markets, the most recent leg supported by the potential to harness Artificial Intelligence (AI) to improve data collection and support automated processes.
Interestingly, active managers, even technology specialists, have failed to keep up with the passive fund which aims to track the FTSE World Technology Index. That’s because the index has huge weights in some of the big hitters such as Microsoft (currently 16%) and Nvidia (currently 14%). Active managers keep their position sizes in individual stocks limited to 10% as an absolute maximum, so they have missed out on some of the gains from these behemoths.
Meanwhile, some broader American funds have done well, capitalising on the growth of big tech, while a UK Smaller Companies Fund also makes the top ten showing there’s also good returns to be found closer to home.
Table: £1,000 invested into the top performing IA funds since 1st August 2009
| L&G Global Technology Index Trust | £14,850 |
| Janus Henderson Global Technology Leaders | £11,952 |
| AXA Framlington Global Technology | £11,273 |
| UBS US Growth | £10,879 |
| AXA Framlington American Growth | £9,782 |
| Fidelity UK Smaller Companies | £9,639 |
| Jupiter Merian North American Equity | £9,529 |
| Baillie Gifford American | £9,488 |
| JPM US Select | £9,125 |
| HSBC American Index | £8,921 |
Can big tech keep performing? It’s a case of ‘Definitely Maybe’. Some investors are worried that high valuations may result in poor returns from this point. But a recent stock market wobble has blown some froth off valuations, and earnings potential still looks strong. Increasingly, there is more dispersion at an individual stock level, and we expect continued divergence in fortunes. Investors should therefore ensure they have a diverse portfolio that isn’t overly concentrated in one area or type of company. It’s tempting to back what has worked best in the past but investing, just like rock and roll, is about generating new ideas as well to stay relevant!
