Tech funds dangle high returns, but watch the risk

TECHNOLOGY as an investment theme is seeing a resurgence. In particular, interest has soared in the past two years in all things digital. For instance, FANG stocks - Facebook, Amazon, Netflix and Google, (through holding company Alphabet) - are in the ascent. They outperformed the S&P 500 last year and are expected to repeat it this year.

While global tech funds are a staple in the unit trust menu, some new themes have been launched to great success in terms of raising assets. The robotics theme, for instance, has raised billions of dollars globally in the last couple of years. Pictet's Robotics fund, available here for accredited investors, was launched in mid-2015 to tap into the "robotics revolution". It "soft closed" to new monies in March 2017 when assets approached three billion euros (S$4.7 billion).

Investors who recall the dot-com bubble and the subsequent crash in 2000 may be cautious. But Tony Kim, portfolio manager of BlackRock's World Technology fund, says the years leading up to and following the dot-com crash have laid the groundwork for the digital transformation as we experience it today. "Tech isn't just one thing," he says. "The performance isn't just last year. For the last one, three . . . 10, 20 years, it's been the best performing sector. People fail to realise that technology has materially outperformed every other sector."