From cloud computing and automation to self-driving cars, technology continues to be one of the world’s hottest sectors. Our Chief Market Strategist Stephen Dover and Portfolio Managers Donald Huber and John Remmert believe active investing in technology and innovation is a global story, and government support and spending in next-generation technologies is likely a long-term positive.
Some argue the computer was invented when Englishman Charles Babbage conceived the first programmable, general-purpose computer, while others reason Englishwoman Ada Lovelace, who wrote the first computer program, is the computer’s true creator. Many debate technological births, yet likely agree that computers and technology continue to transform our daily lives. From today’s cloud computing to self-driving cars, technology continues to be one of the world’s hottest sectors.
- President Joe Biden’s administration’s $2 trillion infrastructure plan includes accelerated technology investments. Tech could benefit from increased purchases of servers, storage, networking hardware and software, and investments in data-center colocations.
- Broadband and fifth-generation technology (5G) investments may get a boost from lower-cost broadband dissemination in “broadband deserts” (rural and urban environments). There could be an expansion of the US Rural Digital Opportunity Fund.1
- Internet privacy and data legislation, similar to Europe’s 2018 General Data Protection Regulation (GDPR), is likely.
- Technology and innovation are reshaping old-line industries. Industrial, materials, and energy firms are increasingly adopting software and automation solutions to better manage their businesses. Materials companies use scientific data and analytic tools to help address global needs in health and nutrition, and sustainability.
- The global pandemic accelerated technology and innovation trends that we expect to persist. Many non-US companies have continued to help drive this innovation through services, software, and advanced semiconductors.
- While they may not be dominant from a market-capitalization perspective, a significant number of investable, smaller, and high-quality international technology companies are just as innovative and fast-growing as the US companies garnering much attention in recent years.
Active investing in technology and innovation is a global story, as Franklin Equity Group Portfolio Managers Donald Huber and John Remmert discuss in, There’s Much More to Tech Investing than the US Market. We believe government support and spending in next-generation technologies (5G, artificial intelligence, etc.) among other major secular trends could be a longer-term positive.