Technology stocks are very much on Questor’s mind at the moment because we are on the hunt for shares that have the potential to rise dramatically over the next three months for our £20,000 Fantasy Fund Manager game – and the right tech stocks would fit the bill perfectly in this column’s view.
This is because technology has come so much to the fore during the coronavirus pandemic as remote working and online shopping cease to be optional and become essential to very many homes and businesses.
There is a problem as far as our competition is concerned, however: it allows only London-listed companies to be held – only FTSE 350 companies at that – and tech stocks are overwhelmingly found overseas, particularly in America.
Britain has a handful – Ocado, Just Eat and Avast, the antivirus firm, spring to mind – but while those three would qualify for the game, others are ineligible either because they are quoted on the junior Aim market, and therefore cannot be in the FTSE 350, or are too small to be members of that index.
All is not lost, however. Investment trusts provide the answer. Several technology-focused trusts are members of the FTSE 350 and therefore eligible for inclusion in your Fantasy Fund Manager portfolio.
Let’s look at the most prominent.
Scottish Mortgage is not only a member of the FTSE 100, and therefore automatically a member of the FTSE 350, which consists of the blue-chip index and the FTSE 250, but it is London’s biggest investment trust by a very long way. Much of its success can be put down to its holdings in tech stocks that have turned out to be extremely well chosen. Prominent among them are Amazon and Tesla, both of which are riding high at the moment.