Franklin Templeton’s strategy is very underweight hardware companies and equal weight semiconductor firms.
Within semiconductor, the group is overweight analog-chip companies, but underweight digital chip companies, where there is likely more risk of disruptions from trade wars.
‘We are very positive on two of the leading Chinese technology companies,’ Curtis said. ‘As of end of March, Alibaba was the fund’s top position and Tencent was in our top 15
‘Both companies have significant long-term growth prospects across e-commerce, cloud computing, social network, digital payments and online entertainment,’ the portfolio manager told Citywire Asia.
In Asia, the Franklin Technology fund is registered for sale in Singapore and Hong Kong. It invests at least two-thirds of its assets in equity securities issued by technology companies. As of the end of April, the fund has total net assets of $2.3 billion.
Majority (96.54%) of the fund invests in the US, while the remaining of the investments are in China, South Korea, Netherlands, Taiwan, Australia and Japan, to name a few.
Addressing how investors should view technology plays going into fintech, Curtis reccomends companies that are in the midst of facilitating massive digital transition such as Visa, MasterCard, and PayPal.
Organisations like Tencent, Alibaba, and Amazon, for example, are using their strong positions in e-commerce and payments to gain deeper insights into consumers.
‘We view companies like Alibaba, Tencent, Google, Amazon, Facebook as data rich consumer gateway companies,’ he said.
‘They do not need financial services to make their business models work, but having financial services helps them gain new consumer insights and to reduce friction on their platforms.’