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View the article online at http://citywire.co.uk/wealth-manager/article/a734002

'Unhappy' O’Gorman apologises for Henderson Tech performance

by Chris Sloley on Feb 14, 2014 at 13:11

'Unhappy' O’Gorman apologises for Henderson Tech performance

Former Citywire AAA-rated manager Stuart O’Gorman has apologised to investors after a strong small-cap rally left his tech fund chasing the index over the past 12 months.

In an investor conference call, the Henderson tech specialist offered a candid appraisal of performance for his Luxembourg-domiciled fund ending the year behind the benchmark.

‘I feel that I have got to start off with an apology,’ said O’Gorman. ‘We are not very happy with where the year ended out. It was always going to happen at some stage, although, in truth, it hasn’t been a disaster.’

The Henderson HF Global Technology fund returned 25.6% over the past 12 months. This is marginally behind its Citywire benchmark, the MSCI ACWI/Information Technology index, which rose 27.06%.

‘What went wrong? I think number one, what went wrong was it was a very, very strong market,’ said O’Gorman. ‘As you know we are pretty conservative, we tend to treat your money as our money.’

‘While that is true, we are still concerned about some of the structural things in the market, such as the level of money printing going on, which we think is looking like it could drive another bubble.’

However, O’Gorman said the make-up of the fund had also made it less inclined to benefit from a wider market rally.

‘Maybe a bigger problem for us though, as you know, we are an index aware fund and we will tend to be much larger cap than the average tech fund.’

‘This helps us to control risk, this helps us to scale things, and, at the moment, we think large caps are looking very cheap.’

'The small cap rally really started going at the end of 2012, now there is a strong divergence between the Russell 2000 and the Russell 1000 indices, it is getting to pretty extreme levels as far as valuations go.’

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