Why invest in high-tech?

Many people believe that investing in high-tech equities is almost a guarantee of success in itself. After all, this is a key sector of the global economy and the corporate sector with the strongest long-term growth in revenues and profits. So far, it has also usually recovered very quickly from economic crises (global financial crisis, Covid pandemic).

However, as is almost always the case on the equities markets, great opportunities are also accompanied by considerable risks. There is hardly any other sector in which more companies and investors start out full of hope, only to end up with failure. Similarly, there is hardly anywhere else where market leaders change more quickly, and business models become obsolete.

This high potential for upheaval in the technology sector is therefore a double-edged sword: on the one hand, even small companies can rapidly become global giants, but at the same time, top dogs that are supposedly firmly in the saddle can also be knocked off their thrones in a short space of time.

The Raiffeisen-HighTech-ESG-Aktien fund attempts to recognise and exploit the opportunities presented by far-reaching technological upheavals at an early stage. At the same time, however, it focuses primarily on companies with a strong and easily defendable market position. High barriers to entry for potential competitors are therefore a very important selection criterion for the fund management!

Fund management’s investment strategy

Current market trends in the technology sector

The standout theme in the technology sector in recent years has been artificial intelligence (AI) and its truly revolutionary potential. Opportunities are particularly abundant among those companies that make AI applications possible in the first place. This applies very strongly, for example, to shares in manufacturers of computer chips and memory modules. At times, however, suppliers or service providers are at least as interesting, such as those that help to ensure or improve the high quality required of the chips produced.

Whilst AI therefore fuels upward price potential on the one hand – for instance, due to numerous new applications and major new investment cycles – on the other hand it also threatens the business models of many established companies and entire sectors, such as the software industry. Equally important as growth potential and financial health is therefore the extent to which companies in the high tech sector can secure their market positions and profit margins. Barriers to entry for potential competitors play a key role in this regard.

What is the HighTech Fund focussing on?

Companies with strong growth

The Raiffeisen-HighTech-ESG-Aktienfund focuses on companies with particularly strong growth and/or disruptive innovations. Disruptive innovations and technologies regularly lead to exponential growth in productivity - often in many areas that are not directly affected at first. The trick is that both the extent and speed of the resulting changes are almost always underestimated by investors. This in turn creates plenty of opportunities for all those who fully or at least better grasp the potential for change.

Accentuated investment decisions and sustainable investing

In order to make the best possible use of investment opportunities, the fund management of Raiffeisen-HighTech-ESG-aktienrelies on a relatively concentrated portfolio of around 40 different equities. On the one hand, this still allows for sufficiently good diversification and, on the other hand, the individual positions in the fund can make quite strong contributions to investment returns. Active management with accentuated investment decisions (and thus also deliberate strong deviations from conventional sector indices) is the motto. At the same time, the fund invests in accordance with ESG criteria.

Excellent performance since fund launch

Since its launch over 20 years ago, the Raiffeisen-HighTech-ESG-Aktienfund has also shown one of the strongest annual performances of all Raiffeisen KAG funds. In its peer group, it ranks among the top performers both in the short term and over long periods of time. But before you immediately place a buy order: This performance was also accompanied by considerable price fluctuations and price setbacks. It therefore requires both staying power (i.e. an investment horizon of at least 10 years) and a sufficiently high risk tolerance and risk appetite. It should be noted at this point that the very good results of the past are no guarantee or indication of future returns and do not allow any conclusions to be drawn about the future performance of the fund.

The Raiffeisen-HighTech-ESG-Aktien exhibits elevated volatility, meaning that unit prices can move significantly higher or lower in short periods of time, and it is not possible to rule out loss of capital.