Mackersie runs the £10m, five crown-rated Unicorn Free Spirit fund, which as FE Trustnet pointed out in an article earlier today, is a top-quartile performer in the IMA UK All Companies sector over one, three and five years. The major theme in his portfolio is the growing need for technological innovation. He has a high weighting to the technology sector as he says it will be one of the fastest-growing areas over the coming years.
"People feel they can find much better tech innovation in the US, however there is a strong digital economy here in the UK," Mackersie said.
Some managers, such as Stuart O’Gorman of the Henderson Global Technology fund, worry that the popularity of this theme is causing a bubble to form in small cap tech, but MacKersie is optimistic about the prospects for his top-performing stocks.
"The internet economy represented 8.4 per cent of the UK’s GDP figures in 2010. However, that amount is forecasted to reach 12.6 per cent by 2016, which is higher than any other country in the world," he said.
The manager also points out that the amount of internet shopping in the UK is considerably higher than in the US.
Because of that, Mackersie highlights three stocks – one large, one mid and one small cap – that he says are using technology to grow and, even more importantly, to gain a competitive advantage over their rivals.
ARM Holdings
One of Mackersie’s largest holdings by market cap is the £13.6bn, FTSE 100-listed ARM Holdings, a multinational semiconductor and software design company.
It is the sixth-largest individual position in his fund, making up 3.2 per cent of assets.
Mackersie says he "loves" it.
"ARM has a fantastic market share in the mobile computing industry. It is just a great business and though it doesn’t manufacture anything itself, it is a classic market leader. It is the type of company I would hold all day," Mackersie said.
ARM Holdings is the world's leading holder of semiconductor intellectual property and is probably best known for creating the chips that power Apple and Samsung’s smartphones and tablets.
Investors in ARM will have seen a hefty 830.03 per cent return over five years, though the manager expects the stock to continue to perform well as people become more dependent on mobile internet access.
Performance of stock over 5yrs
Source: FE Analytics
Our data shows there are 16 funds in the IMA universe that count ARM Holdings as a top-10 position, one of which is FE Alpha Manager James Thomson’s Rathbone Global Opportunities portfolio.
Blinkx
Mackersie (pictured) also rates Blinkx, a FTSE AIM-listed internet media platform that connects online video viewers with content publishers and distributors, using online advertising.
He says he is using it to take advantage of the increasing amount of time people are spending online, which is why it is the fifth-largest company in his portfolio."Another one would be Blinkx, which has a market cap of £600m," he said. "We have held it since February."
"It puts the relevant advertisements on online video clips by matching the content with the relevant viewer."
"It is backed by its own intellectual property, which can find out what people are watching by actually 'viewing' the content instead of simply looking through its tags," he added.
Shares in Blinkx fell sharply after the stock was originally listed in May 2007 and have been highly volatile ever since. Nevertheless, since the start of the year it has returned a staggering 158.05 per cent.
Performance of stock year-to-date
Source: FE Analytics
For those investors concerned they have already missed out, the management team yesterday announced there had been a huge jump in half-year profits.
Our data shows that as well as Unicorn Free Spirit, there are six funds in the IMA universe that count Blinkx as a top-10 holding. One of these is FE Alpha Manager Philip Rodrigs’ five crown-rated Investec UK Smaller Companies fund.
dotDigital
One of Mackerie’s smallest companies is dotDigital. He says the opportunity was flagged up by a broker and it is now one of the largest positions in his fund.
"Down at the smaller end of the market there is dotDigital. It has a market cap of just £60m and is our fourth-largest holding," Mackersie said.
"It specialises in email marketing. They have a sought-after special programme that can sort and track through email activity by seeing who is clicking through the emails and how much they are spending."
"They are already strong in the UK, but are making headwinds in the US. They have also announced that they will be paying a dividend next year," he added.
dotDigital was listed on the FTSE AIM in March 2011 and has returned close to 160 per cent since then.
Performance of stock since March 2011
Source: FE Analytics
The company’s clients include the likes of ITV, Michael Page International, Balfour Beatty, BP International and EDF Energy.
Mackersie is the only manager in the IMA universe that counts dotDigital as a top-10 holding. However, given its small market cap it is understandable why not many funds can take a meaningful position in it.
