Revealed: The shares to buy to invest in the innovations of the future Revealed: The shares to buy to profit in the tech of the future

Anthony Rayner, who runs the Miton Defensive Multi-Asset fund, has revealed how he is investing in the technologies of the future.

 Revealed: The shares to buy to profit in the tech of the future

Rayner is invested in the technology of the future

He commented that the fund is presently a combination of investments in the theme of ‘reflation’, which is the upwards revision in inflation and growth expectations around the world.

The fund manager said, ‘The reflation story has a way to run yet if it proves to be the case. Related to this there has been a slew of recent commentary arguing that the 30-year bull market in bonds has ended which is consistent with the end of disinflation. If so, this would mark a huge tipping point away from a world which has persisted throughout most professional investors’ careers.’

Rayner acknowledged that a ‘lesson of history’ is that rapid technological innovation leads to deflation. He takes the view that this is a ‘long-term structural’ change, but that there are inflationary factors between now and then to which it is worth investors being invested.

So he is invested in a number of infrastructure and financial assets to capture this reflation.

With regard to investing in the trends of the future, Rayner commented, ‘In the new energy space, a large number of data points suggest that the industry is accelerating as it passes some important milestones. The cost of solar energy is now below the cost of grid energy in many US states and continues to fall each year. Irrespective of environmental issues, economics are driving solar uptake at a rapid pace. In fact, renewables now account for around 70% of new energy capacity added in the US. At the same time, battery technology is becoming more efficient and is also falling in price which makes solar even more attractive to a typical household.’

Read more: How to invest in robotics in a tax efficient way

But he remarked that finding appropriate investments in the sector is tough, ‘we don’t invest in solar panels, the prices are falling rapidly and the sector has a lot of the same trends as befell the semi-conducter industry {where there were so many players that prices and investment returns collapsed}.’

He is more interested in technology companies where value is added by a company entering the space, rather than it just being about value.

Ryaner cited the US car company Tesla as an example of this.

In the broader area of robotics he is invested in the Japanese companies Denso and Fanuk.

Rayner continued that there are far more censors in contemporary mobile phones than in their predecessors.

He concluded his comments with the remark that, the internet of things is something about which people were talking for years, but we are now starting to see it happen. People of my generation don’t notice it to the same extent, but this is happening and younger people are aware of it.’

Rayner concluded his comments by highlighting the investment case for NVidia.

David Older, head of equities at Carmignac, commented, Four key sectors in our current positioning will shape tomorrow’s world: Communications, Media, Internet and Information Technology. The Trump presidency will impact these sectors positively through proposed reductions in corporate tax rates and reduced regulation, which will be favourable for the Technology sector. When combined with a backdrop of sector convergence, this will create an environment ripe for mega M&A deals in the US in 2017.’

He added, ‘Many Technology and Internet companies have very large offshore cash balances, with Apple’s alone being over $200Bn.  Part of Trump’s tax reform proposal will incent these companies to repatriate that cash, providing them with three options: return it to shareholders, reinvest it in US operations, or make strategic acquisitions. Due to the sheer scale of these cash balances, and the ongoing convergence between these sectors, we believe the most likely use of cash will be large scale M&A. We expect the likes of Google, Microsoft, and Oracle to be active in increasing their exposure to the cloud computing space to better compete with Amazon, while we see Apple as likely to consider content acquisitions such as Netflix to boost their services revenues and diversify away from the iPhone.’
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