The first regular biannual formal report to investors in the Fund will cover the period to October 31. This will be sent out by the fund operator, Capita Financial Managers (CFM), not too long after that date and will include an Investment Advisers report prepared by Techinvest.
In advance of this, we thought it might be useful to give newsletter readers, who comprise the majority of investors in the Fund, some sort of interim progress report, now that it is a little over three months since the Initial Offer period ended on May 19.
At that point, the Fund had received £6.1m, resulting in the creation of 6.1 million shares at 100p. Since then, there has been a steady trickle of new money.
At the most recent valuation point at 10.00am on Wednesday August 27 the number of shares in issue was 8.52 million, each with a value of 129.36p. The Fund was therefore worth £11.02m at that date.
The appreciation in the price to date represents a gain of 29.36%. This compares with an advance of 6.74% by the FTSE 100 index and one of 16.87% by the techMARK AllShare index, which is the benchmark for the Fund.
After a slow initial start, the Fund is now nicely ahead of its benchmark and even more so of the main London market index, the FTSE 100. It is worth remembering that the investments to date have been made against the background of a rising market, a factor which militates against outperformance.
At the latest valuation, 83.2% of the assets were invested in shares, with the balance in cash. Of the shares invested, 80.5% are categorised as United Kingdom, 15.8% as US, 2.8% Canada and 0.9% Ireland.
Total number of holdings is 44 as of August 27. The ten largest (in alphabetical order) are Alphameric, Ascential Software, COLT Telecom, Innovation, LogicaCMG, Marconi, Marlborough Stirling, Merant, NSB Retail Systems and ServicePower. With the exception of Nasdaq-listed Ascential Software all of these are quoted on London.
The five best performing stocks so far, based on the average price paid for each, are Fibernet (up from 34.6p to 99p), NSB Retail Systems (6.29p to 16.38p), AIT (30.0p to 68.5p), and COLT Telecom (57.69p to 98.5p).
The Fund has made only two sales to date, both partial. It is not our intention to trade quickly in and out of stocks, although there will be situations where it is appropriate to do so. Instead, in line with the traditional Techinvest philosophy, our focus is on the medium-term.
For instance, of the 36 New Buy ratings in the newsletter throughout 2001, 22 have since been advised as sales with 14 still under coverage. For 2002, the corresponding figures are 36, 6 and 30. It is likely that the average holding period for the Fund will be broadly similar, although there will be stocks that remain in the Fund for five years or more, as well as very much shorter.
We regret to say there has been no change in the ISA status of the Fund. As with other similar new funds, it is still not eligible for inclusion by UK investors in Individual Savings Accounts.
As we explained before, this is an industry-wide problem. The expectation remains that the Inland Revenue will adjust their rules before too long, but there is still no guarantee this will happen in the current tax year.
The price of shares in the Fund can be found in the FT Managed Funds Service section of the Financial Times. It can also be found on our web-site (www.techinvest.ie) where it is updated each Wednesday afternoon as soon as we receive it.
For any assistance on administrative matters or if you wish to buy or sell shares in the Fund, please contact Capita Financial Managers at 4th Floor, Beaufort House, 15 St Botolph Street, London EC3A 7HH. Telephone:+44(0)20 7556 8800; Fax: +44(0)20 7556 8850. Please note that Capita’s address and fax number have recently changed, but not the telephone number. Capita Financial Managers is authorised and regulated by the Financial Services Authority.
The value of shares in the Fund is provided by CFM and includes reinvested income. The index values used are taken from a Bloomberg terminal at the same point in time .
The Fund is not authorised for sale to the public in the Republic of Ireland.