November 2021: Tech hit hard

We have seen a clear increase in market volatility in recent weeks driven by concerns around the new version of covid and the US central bank's more negative outlook around inflation. To this must be added a concern about increased wage costs and difficulties in obtaining labour. Tech is one of the sectors most affected by this concern and above all companies with high multiples. In our view, the market often has difficulty distinguishing between companies that have high multiples due to profit and sales growth such as software and many companies that are expectations companies with half-decent business opportunities.

Software has performed weakly throughout the autumn, which surprises us as we believe that many companies will enjoy strong demand in the next few years due to the digitization of companies. The video game companies continue to underperform despite strong figures during the autumn. The biggest worry clouds in the sky – IDFA and tough comparative figures – we are now on our way past.

The demand for semiconductor equipment continues to be clearly stronger than what the companies can produce today. This together with a number of new factories being built in the next few years means that the outlook for the sector continues to be very bright.

The Global Technology Fund closed up 1.02% in November and is now 23.47% YTD.