Pengana has identified the Japanese tech name which it is betting on as an alternative opportunity, after divesting from the FAANG names earlier this year.
In a webcast, Pengana International manager Jordan Cvetanovski said the fund had sold its last remaining stakes in Microsoft and Alphabet and was taking a more global look at technology, away from the US mega-cap names.
Of interest was the Japanese e-commerce brand Rakuten which had seen shares rise 30% since the start of the year compared to returns by the Nikkei 225 of 1.4% over the same period.
The firm, which was Japan’s largest e-commerce retailer, also operated Japan’s largest internet bank and offered digital content to over one billion members.
Cvetanovski said: “We are not saying we aren’t going to look at the FAANGs again but we are finding interesting investment opportunities elsewhere.
“We like Rakuten in Japan, which is the Amazon of Japan, it has a different eco-system and a points system to keep clients with it and generate brand loyalty.
“It has been a big beneficiary from COVID and is rolling out a 5G service which will create a virtual network, rather than a hardware network, which is proven to work. The market is focusing on the capex money being spent rather than the core business which is doing tremendously well and we think there is real potential there.”
Rakuten was held in the top ten of the firm’s International, International Ethical and International Ethical Opportunity funds and also by Platinum Asia.
The manager also liked other Asia names such as Tencent and Alibaba which had both been strong performers this year, rising 42% and 48% respectively.
According to its latest factsheet, the fund had 6.3% allocated to the tech sector overall but Cvetanovski said this was due to the “bizarre” classification system which saw firms like Amazon classed as consumer discretionary and Google as a communications services.
The Pengana International fund had returned 18% over one year to 30 September, according to FE Analytics, versus returns by the global equity sector of 3.6%.
Performance of Pengana International fund versus returns by the global equity sector over one year to 30 September
