Coming soon: The start of the next tech boom

Not many people would be thinking of investing in the technology sector at the moment – but they should be.

Wednesday, April 13th 2005, 5:45AM

That’s the view of one of the world’s better-known technology investors Brian Ashford-Russell.

Ashford-Russell made his name as the manager of AMP Henderson’s technology fund during the bubble and now runs his own funds management firm Polar Capital.

He concedes that the tech sector is totally out of favour with investors following the bursting of the late 1990s bubble.

The NASDAQ Composite lndex peaked at 5048 in March 2000 after rising 245% in the previous 18 months. Three and a half years later it almost slipped below 1100 points before clawing its way back to 2178 points at the end of last year.

Ashford-Russell says the case for technology is very strong.

Amongst a number of reasons put forward by Ashford-Russell yesterday are that spending on technology is growing faster than world GNP, and that the tech sector is quite cyclical.

Ashford-Russell says that although the sector is out of favour, technology is an industry that can deliver fantastic long-term returns.

His view is that investors should be thinking about being involved in the sector around the middle of next year then moving quickly to a heavily over-weight position.

The environment for technology is “vastly more supportive” for the next 10 years than it has been in the past five years.

He warns the next run up in the tech sector won’t be as huge as the last one. In fact the next time we see something like that will be around 2014 when the memory of the 1990s has faded.

Likewise the gains will be played out in other areas of the market too. Companies like Microsoft, Cisco and Intel are becoming more like industrial companies.

Ashford-Russell picks that some of the areas where big gains will be made are technologies that make use of all the cheap bandwidth that is coming on stream, medical technology, technologies that make better use of resources (such as in oil drilling) and digital equipment for consumers such as LCD screens and televisions.

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