Technology offering comes out tops in a tough environment Two funds managed by Henderson Global Investors took home five-year sector honours in the SCMP Fund Manager of the Year Awards 2003. Its Henderson Horizon Global Technology Fund, domiciled in Luxembourg as an SICAV sub-fund of the company's Horizon Fund, took honours under the TMT Global category. Launched in 1996, it had US$281 million in assets under management at the end of last month. The company's Henderson Horizon Continental European Equity Fund was the five-year sector winner in the Equity Europe excluding UK category. The Euro494 million (about HK$4.86 billion) fund is another sub-fund of the Luxembourg-based Horizon SICAV. The Henderson Horizon Global Technology Fund takes a long-term approach to its investments, seeking long-term capital appreciation by taking advantage of global investment trends as they move from one region of the world to another. The technology environment over the past few years has been tough, making it difficult to bag extraordinary returns, and the Henderson fund's performance reflects this. It performed remarkably well in 1999, bringing home returns of 191.48 per cent. But the following three years brought negative returns to the tech fund industry as a whole, with Henderson's fund no exception. Last year heralded the fund's return to glory. It returned a solid 49.55 per cent, largely thanks to the fund managers' decision to go overweight on the internet while stock-picking in the telecommunications-equipment sector. The fund has been run jointly by Paul Kleiser and Stuart O'Gorman for the past three years. Both have strong technology pedigree. Before joining Henderson, Mr Kleiser ran the Technology Unit Trust for Scottish Equitable from its inception in 1985. Mr O'Gorman also comes from the Scottish Equitable stable, where he specialised in the technology sector after joining the United States desk in 1996. The team employs a bottom-up strategy, and as a result, relies heavily on its own research, says Henderson Global Investors. Regular visits are made to the companies in which the fund invests, and a close eye kept on corporate and sector developments, analyst reports and the media. Spotting trends globally in the tech industry generally means looking in two directions - to the US or Japan - and this is reflected in the fund's geographical asset allocation. The US clearly dominates, holding 62.5 per cent of the fund's total investments. The next biggest investment chunk of 6.8 per cent is dedicated to Japan, followed by Germany with 4.8 per cent, Taiwan with 3.7 per cent, South Korea with 3.6 per cent, Britain with 3.2 per cent, Singapore with 2.6 per cent, Sweden with 1.6 per cent, the Netherlands and Finland both with 1.5 per cent and Israel with 0.9 per cent. The remaining 5.6 per cent is allocated to cash. Its key holdings include Microsoft, Cisco Systems, Intel Corporation, Samsung Electronics, Synopsys, and Lexmark International Group. The Henderson Horizon Continental European Equity Fund is managed by John Botham, who has successfully beaten his benchmark - the FTSE World Europe ex UK Index - for the past five years. As at end of January, the fund was delivering returns of 26.9 per cent compared with a return by the index of only 6.7 per cent. The fund's cumulative one-year return stands at 33 per cent. Its investment objectives are to seek long-term capital appreciation by investing in a variety of sectors in Europe (excluding Britain). In terms of geographical asset allocation, Germany and France dominate. As at the end of last month, they took 26.9 per cent and 23.9 per cent of the fund's assets respectively. Switzerland and the Netherlands follow with 14.3 per cent and 12.3 per cent respectively. The remainder of the fund is invested in Spain, Sweden, Italy, Finland, Denmark, Ireland, Austria and the Czech Republic, and cash. Companies that have contributed to the fund's performance include French oil giant Total Fina Elf (3.5 per cent); Dutch electronics company Philips (3.2 per cent); Swiss pharmaceuticals firm Roche (3 per cent); and Finland's telecoms juggernaut Nokia (2.5 per cent). In terms of sectors, financials have been the backbone of this fund's investments, representing a sizeable chunk of the fund's investments (28.8 per cent) and featuring key names such as Allianz Holdings, UBS and ING Groep. Other sectors that feature heavily in the portfolio are consumer goods (14.3 per cent), general industrials (10.2 per cent), non-cyclical services (9.7 per cent), cyclical services (8.2 per cent), basic industries (7.7 per cent), information technology (7.7 per cent), resources (5.2 per cent); cyclical consumer goods (5.1 per cent), utilities (1.3 per cent) with the remaining 3.5 per cent in cash.