Interactive Investor

Time to buy into 'world-changing' tech funds?

28th April 2016 13:48

Douglas Chadwick from interactive investor

The world, for me, is full of unanswered questions. Some trivial examples might be... I know what the speed of light is, but what is the speed of dark? Why do psychics have to ask you your name? What happens if you get half scared to death twice?

I could go on in this vein, but that's not the purpose of this article. My serious question is: "Will the world run out of the resources to feed its people and keep them warm and relatively free of illness, and, during these times of uncertainty, where should my savings be invested?"

My instinct is telling me that a small part of my future investment should be in the all-embracing field of technology, be it pharmaceuticals, biotechnology, energy capture and distribution, genetically modified (GM) foods, digital products or nano-sciences. These, if they are not already, will all be the future world-changers, be it for good or bad.

Surprising point

I recently read an article which made the surprising point that the world's population had exploded from one billion at the time of the Industrial Revolution to seven billion today.

Actually, it has doubled in the last 50 years whilst, surprisingly, the real price of food has stayed static and the number of people going hungry is dropping year on year.

This is largely due to the improvements and increased use of fertilisers, plus the breakthrough in GM crops.

It now appears that the Saudis are at last throwing in the towel in the oil price battle, and are putting up half their industry for sale so that they can use this money to diversify into other technologies of the future.

For instance, solar power, when successfully harnessed, will produce unlimited energy for use in heating, transport, food production and desalination, without destroying the atmosphere.

That's good for the whole world - if not immediately for the OPEC countries, or even an independent Scotland!

Lump together biotechnology, nano-science and digital products and you are possibly creating the means to live forever.

We would all shudder at the thought of having an Amstrad computer inserted into our children at birth.

But a tiny diagnostic chip capable of forecasting illness before it happens - well, why not?

Technology advances

Increased life expectancy with the removal of old age "brain drain" would produce increasing intellect and hopefully a generation capable of controlling population without war.

I am aware that this is very simplistic and sounds a bit "Dan Dare", but it's actually happening now and many of us will experience the effects of these advances in technology.

This being the case, I would expect this to become visible in the performance of technology funds as managers weed out the successful businesses from the dross.

You can see from the 26-week table above, taken from this week's Saltydog data, that, having fallen at the beginning of the year, these funds appear to be on the move again, but slowed again last week.

Although I may be too late to catch the worm, if this upward trend continues I will be happy to be the second mouse at the cheese!

After a poor January and mixed February, most equity markets picked up during March and that has continued into April.

As a consequence, we have seen an uplift in fund performance and so we have reduced the amount of cash in our own demonstration portfolio from 26% down to 7% as we have continued to invest.

The overall value of the portfolio continues to go up, and in fact is back to an all-time high.

Douglas Chadwick is a founder of Saltydog. You can find out more on their website.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Related Categories

    Funds
    Biotechnology
    Commodities