16 December 1999

There are some excellent international technology funds, headed by Aberdeen Technology, which is up by more than 1,000 per cent over the past 10 years. However, until the recent launch of the Close FTSE techmark fund, there was no technology unit trust investing solely in the UK.
It is the only fund eligible for Pep transfers as well as Isas. It is up by 30 per cent since launch on Nov ember 1 and is my nap selection for 2000, even though technology shares look rather expensive.
These are much more volatile than ordinary shares, often going up by 50 per cent in a few months and then coming down by 30 per cent but the overall return even at current levels is likely to be at least 20 per cent a year over the next 10 years, according to Richard Holway, which pioneered the System IT index more than 10 years ago.
Since November 1989, this index has risen by 430 per cent against a more modest increase of 175 per cent in the FTSE 100.
The techmark index consists of a lot of small companies as well as some much bigger ones, including Sema, Sage, Logica, Misys and CMG.
The areas it covers include computer services, the internet, software, medical equipment and biotechnology, as well as electronic equipment and telecommunications.
According to Richard Holway, the UK's IT sector has never been in better shape. We now have world-beating and world-size IT companies. UK management is so well respected that Britons head many of the world's biggest IT companies.
I believe it is sensible to invest between 10 and 15 per cent of a portfolio in technology stocks, provided it is for the long term. The Close FTSE techmarek fund is certainly one of the best homes for Pep transfers. Close Brothers must be congratulated for launching such an innovative fund.