TECHNOLOGY stocks, long glamorous in the United States, are gaining a higher profile in Asia, as demonstrated by the launch of at least three specialist mutual funds in the past six weeks.
The trend got under way in mid-July, with the launch of Rothschild Asset Management (Hong Kong)'s Five Arrows Asian Technology Fund, and swung into high gear this month with the launch of Jardine Fleming Unit Trusts' US$300 million Eastern Technology Fund in Taiwan and its Pacific Technology Trust in Hong Kong.
Rothschild marketing manager Martin Ashe said: 'I think you'll see a whole range of [Asian] technology funds coming out. We were the first [retail fund]. But you'll see more.' Asian firms have long been seen as mere component makers for the stars of Silicon Valley. However, regional (including Japanese) firms churned out 43 per cent of the world's electronics goods last year.
Almost 40 per cent of US households already own at least one personal computer. But the penetration rate is much lower among Asian households: 14 per cent in South Korea and Taiwan, and 22 per cent in Japan.
Throw in the huge potential of the mainland and Indian markets - not to mention the increasing importance of electronic publishing in Asian languages - and the case for the accelerated growth of Asian hi-tech is easily made.
Technology is a notoriously-volatile sector. Jardine Fleming warned in the marketing material for its Pacific Technology Trust: 'Technology stocks can be volatile, as share prices are vulnerable to shifts in global demand and the development of new technologies.' The fund is classified as 'high risk-high reward'.
Rothschild and Jardine Fleming both note that a mutual fund, because it can shift the allocation of its assets, can smooth out the hi-tech sector's traditionally-uneven performance.