NVIDIA is providing a further boost to London’s investment trusts backing big tech stocks after a difficult year, which has seen the tide start to turn in recent months.
Since the heights enjoyed by big tech during the pandemic, the past 14 or 15 months have been uncomfortable for many of these funds, and brought the largest of the lot, Scottish Mortgage Investment Trust PLC (LSE:SMT), down with a bump.
All those with stakes in NVIDIA were trading higher on Thursday, following the earnings update from the US company overnight.
Tech specialist Allianz Technology Trust PLC (LSE:ATT) has one of the largest holdings, at almost 5.8%, trumping fellow tech sector player Polar Capital Technology Trust PLC (LSE:PCT), which has a just under 3.3% of its portfolio in NVIDIA.
According to data from the Association of Investment Companies (AIC), the largest percentages are seen at the smaller Martin Currie Global Portfolio Trust plc (LSE:MNP) and Manchester & London Investment Trust plc (LSE:MNL), both worth almost 6% of their investment portfolios.
Both the Canadian General and JPMorgan American trusts also hold more than 5% of their portfolios in the US chipmaker.
The biggest by total market value is likely to be Scottish Mortgage, which has a 3.2% holding but a market cap of over £9bn.
Over the past six months, Polar Capital Technology and Allianz Technology are up almost 23% and 20% respectively, topped by Manchester & London. The Martin Currie trust is up over 14% and JPMorgan American topping 6%.
But despite a 2%-plus rise today and 6% gain over the past month, Scottish Mortgage is down 8% in the year to date, and over 40% since the start of 2022.
While its backing of tech stocks at high valuations makes some more careful investors uneasy, it has more been its heavy investment in private companies that has led to it underperforming its rivals after a stellar run in the decade up to the pandemic.
There are some other stocks in the SMT portfolio with interest in semiconductors and AI, including equipment maker ASML its largest holding, but it is not a theme that the managers specifically seem to be leaning hard into.
Tech specialists Polar Capital and Allianz of course are.
PCT’s top 10 includes OpenAI backer Microsoft at 12%, semiconductor companies AMD and TSMC at 3.3% and 2.2%, plus big tech names Apple at 10.1%, Alphabet 6.2% and Samsung at 3% - all as of the end of April.
For ATT, as well as its holding in NVIDIA, it has TSMC at 3.1% and ON Semiconductor at 2.5%, behind Apple at 8.7%, Microsoft at 6.9%, Meta at 5.3% and Alphabet at 5%.