East Spring Asset Management Co., Ltd. With a positive view on US technology stocks, recommending ES-USTECH fund and forecasting US tech stocks upside more than 10%.
Ms. Darabut Paphaphot Managing Director East Spring Asset Management (Thailand) Co., Ltd. or East Spring Asset Management Co., Ltd. revealed that after the first half of the first quarter of 2023, many signs of economic and investment reversals have been seen. Where various assets that were sold in the past year have had buying back pressure. Especially the US technology group that is growing well. With returns increasing year to date (as of February 17, 2023) S&P500 IT Index at 12.3%, S&P500 Growth Index at 5.9%, S&P500 Index at 6.2% and Dow Jones Index at 2.1%.
East Spring Asset Management Co., Ltd. Positive view on US technology stocks this year. which is expected to be a group that grows well This is because it is the end of the US interest cycle. Investors have already received a lot of news about interest rates. by assessing that inflation has passed its peak And the US stock market has bottomed out in the past year. In addition, from statistics, it is found that when the stock market bottoms Big tech stocks will start recovering first, such as the COVID-19 trade war crisis.
Looking ahead, the S&P500 IT sector’s earnings per share increase is expected to be 14.9% in 2024 and 10.7% in 2025 compared to US stocks across the sector. 2024 S&P 500 Growth at 8.1%, S&P 500 Value at 11.3%, S&P 500 Index at 9.7%; 2025 S&P 500 Growth at 8.1%, S&P 500 Value at 10.1%, and S&P 500 is at 9.0% (Source: Bloomberg as of February 17, 2023)
Ms. Darabus said that East Spring Asset Management Co., Ltd. There is a fund that focuses on investing in US technology stocks, namely EASTSPRING US Information Technology Fund (ES-USTECH), which has a policy to invest in iShares S&P 500 Information Technology Sector UCITS ETF (master fund) in Class USD (Acc) managed investment units. Managed by BlackRock Asset Management Ireland Limited, the master fund has the objective of Build return on investment to match returns of S&P 500 Index Capped 35/20Information Technology
It invests in the stocks constituents of the S&P 500 Capped 35/20 Information Technology Index in proportion to each of the stocks included in the index. which can invest in each stock 20% of the net asset value of the master fund and may invest in any one stock up to 35% of the net asset value of the master fund. As a result, the master fund and ES-USTECH fund have concentrated investments in issuers. Therefore, investors may lose a large amount of their investment if there are negative factors.
As of now, the iShares S&P 500 Information Technology Sector UCITS ETF holds the top 10 investments: Apple 24.42%, Microsoft 18.66%, Nvidia 5.87% Visa 4.12% Mastercard 3.45% Broadcom 2.69% Cisco System 2.33% Accenture 1.94% Adobe 1.84% and Salesforce. 1.84%, totaling more than 67% of the portfolio. However, Bloomberg Consensus has estimated that the next 12-month price target of US technology stocks will have more than 10% upside (Source: Bloomberg as of February 17, 2023).
“For investors interested in investing in large companies in the Information Technology sector in the US market, the ES-USTECH fund is one of the funds that can answer the question. Recommended to hold medium to long term. Although there will be some volatility in the short term, but in the long term, it is considered a fund that can generate returns which is considered attractive,” said Ms. Darabut.
