The US NASDAQ index of technology stocks is up 29.63 per cent year-to-date and the FTSE All Share Technology index 27.2 per cent.
Train says he is adding to his current technology holdings even after such a good run and is considering other stocks in the sector.
"This [the tech bull market] is no surprise for us – long predicted – but as always we wonder, from our perspective as investors in the UK stock market, if we have sufficient portfolio exposure and in the right names," he said. "We have circa 30 per cent in the space, compared with the benchmark’s circa 12 per cent, including healthcare and media, and this overweight has definitely helped us in 2013."
Data from FE Analytics shows that Finsbury Growth & Income has made 31.88 per cent in the year-to-date, a fraction under the 31.94 per cent of the IT UK Growth & Income sector but well ahead of the FTSE All Share’s 23.03 per cent.
Performance of trust vs sector and benchmark over 1yr
Source: FE Analytics
Train says investors are wrong to think of the technology industry as primarily an American phenomenon.
"The UK may not be able to boast a Facebook, Google or Twitter, but we can table the world’s most visited online newspaper (MailOnline), the providers of must-have online tools for the global academic, legal, investment banking and mining industries (variously Reed, Fidessa and Euromoney) and a respected provider of accountancy software services to small companies right around the world (Sage)," he said.
"Then there is Pearson. There is no doubt that education is digitising and that this will create growth and profit opportunities for education software providers."
"Pearson is the biggest such provider in the US, which is where the technology transformation is most advanced."
Data from FE Analytics shows that Pearson shares have made 172.25 per cent over the past five years while the FTSE All Share has risen 101.22 per cent. It has marginally underperformed the index this year, however. The stock is up 14.15 per cent.
Performance of stock vs index in 2013
Source: FE Analytics
Train says the sluggish performance of the stock over recent years is actually a reason for investors to look at it again.
"What clinches the Pearson investment case for us is valuation," he said. "To us, there is no great optimism and certainly no hint of growth stock excitement in it."
"And yet, in the right circumstances it could be valued as a great global growth business. Lots of upside."
Train has had more success with other tech stocks this year, with Fidessa Group up 48.65 per cent and Daily Mail General Trust 47.1 per cent. Reed Elsevier has risen 42.4 per cent and Euromoney 29.4 per cent.
Performance of stocks in 2013
Source: FE Analytics
While the past year has been good for technology stocks, and indeed the past three years has seen them substantially outperform the mainstream indices, some commentators have warned of a potential bubble in some areas of the market.
Companies such as Rightmove and ASOS, which have built their business model around the internet, are trading on expensive valuations that some commentators warn could end in tears.
Train, however, sees no such issue with his holdings.
The manager’s Finsbury Growth & Income Trust is the best-performing portfolio out of the 20 closed-ended funds over the past decade, having returned 336.33 per cent to investors as his peer group average managed 159.36 per cent.
Performance of trust vs sector and index over 10yrs
Source: FE Analytics
It has ongoing charges of 0.94 per cent and is currently trading on a 0.6 per cent premium. The trust yields 2.1 per cent.
Unicorn’s Fraser MacKersie told FE Trustnet last week that he was finding lots of small cap technology stocks in the UK that were potentially world-class companies. He picked three stocks for investors thinking of playing the theme.
