Investing in technology innovation
Structural technological change has emerged as the most powerful investment theme of the 21st century. Looking ahead, there is every reason to believe that the rapid pace of change enabling the digital transformation – and the scale of gains – is set to continue.
Why invest in technology?
Innovation is driving growth
Our approach is based on the idea that innovation is the fountainhead for growth.
In our view, innovative companies tend to grow faster, create better products and services that form barriers to competition, and are better positioned to adapt to times of change.
Understanding how innovation emerges could give investors a real advantage when it comes to investing in the tech sector.
Where does innovation happen?
Innovation can occur anywhere, but some companies are more likely to innovate than others. We look for innovative companies in two key areas.
Disruptors: fast-growing technology companies disrupting the old guard.
Leaders: best-in-class technology companies continually innovating to stay ahead.
We believe these are the most fertile grounds from which innovation – and long-term growth – can spring.
Finding the greatest innovators
A vital part of our investment process is identifying companies that are disruptors in their industry, which have the capacity to grow while impacting other industries apart from their own.
Great ideas create value – they either make things better or make thing cheaper – and can create a barrier to entry for competitors. This makes execution important, and so we also look for good management teams and strategic forward thinking.
Our expertise
Passion and process
Our passionate and experienced teams invest based on a robust process, seeking to capture multiple technology themes to create diversified and balanced portfolios.
A focus on the best
We look for the best technology investment opportunities across the globe, industries, and market capitalisation range, creating high-conviction portfolios that seek to capture multiple drivers of the global digital transformation.
Extensive team support
As a global investor, our specialist investment teams are able to draw on extensive company-wide resources and global technology research capabilities to inform their investment decisions.
Our technology strategies
Our technology strategies are driven by the search for the disruptors and the digital leaders to benefit from exposure to technology innovations enabling the digital transformation.
Global technology strategy
An unconstrained multi-cap strategy that seeks capital growth by investing in companies focused on the research, design and development of new technologies.
View fundDisruptive technology strategy
A global multi-sector technology strategy that seeks to invest in innovative technologies ‘disturbing’ the old system. It aims to capture secular themes, including AI, cloud computing and emerging technologies, across multiple industries such as financial services, industrials, energy, consumer goods and healthcare.
View fund
Important information
Marketing communication. For professional investors only.
This document is directed only at person(s) who have professional experience in matters relating to investments (“relevant persons”). Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority. Any person who is not a relevant person should not act or rely on this document or any of its contents.
Past performance or achievement is not indicative of current or future performance. Performance is calculated net of fees unless otherwise stated.
Any views expressed here are those of the author as of the date of publication, based on available information, and subject to change without notice. This material does not constitute investment advice.
Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.
Environmental, social and governance (ESG) investment risk: The lack of common or harmonised definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, (the Sub-Fund’s) performance may at times be better or worse than the performance of relatable funds that do not apply such standards.
Equity strategies may be exposed to other risks defined below:
MARKET RISK: This is a general risk that affects all investments. Price for financial instruments are mainly determined by the financial markets and by the economic development of the issuers, who are themselves affected by the overall situation of the global economy and by the economic and political conditions prevailing in each relevant country
EQUITY RISK: The risks associated with investments in equity (and similar instruments) include significant fluctuations in prices, negative information about the issuer or market and the subordination of a company’s shares to its bonds. Moreover, these fluctuations are often amplified in the short term. the risk that one or more companies suffer a downturn or fail to grow can have a negative impact on the performance of the overall portfolio at a given time. There is no guarantee that investors will see an appreciation in value. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment.
INTEREST RATE RISK: The value of an investment may be affected by interest rate fluctuations. Interest rates may be influenced by several elements or events, such as monetary policy, the discount rate, inflation, etc.
CREDIT RISK: This is the risk that may derive from the rating downgrade of a bond issuer to which the strategies are exposed, which may therefore cause the value of the investments to go down. Strategies investing in high-yield bonds present a higher than average risk due to the greater fluctuation of their currency or the quality of the issuer.
LIQUIDITY RISK: This risk arises from the difficulty of selling an asset at a fair market price and at a desired time due to a lack of buyers.
COUNTERPARTY RISK: This risk is associated with the ability of a counterparty in a financial transaction to fulfil its commitments like payment, delivery and reimbursement.
OPERATIONAL AND CUSTODY RISK: Some markets are less regulated than most of the international markets; hence, the services related to custody and liquidation for the strategy in such markets could be more risky.
DERIVATIVES RISK: When investing in over-the-counter or listed derivatives, the fund aims to hedge and/or to leverage the yield of its position. The attention of the investor is drawn to the fact that leverage increases the volatility of the strategy.
CAPITAL RISK: The investments in the funds are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay, the funds described being at risk of capital loss.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INVESTMENT RISK: The lack of common or harmonized definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, the strategy’s performance may at times be better or worse than the performance of relatable funds that do not apply such standards.
This is not an exhaustive list of risks. For a full description of risks associated with each fund, please consult a client relationship manager or the global BNP Paribas Asset Management website: staging.bnpparibas-am.co.uk.