SMSF members should look to invest in companies that will be distinct winners in the technology sector as its evolution continues to cause disruption within conventional society, a global fund manager has said.
“How do you navigate technology as an investor? We think that there are going to be winners out of this space. We also think there are some companies we don’t know as yet as to how they will be affected, and we also think there are going to be some serious losers,” Magellan Asset Management listed funds key account manager Emma Kirk told attendees at the recent selfmanagedsuper Trustee Empowerment Day 2017.
She named Google, Facebook and Apple as organisations Magellan had identified as winners in the world of technological disruption due to their standing as consumer platforms with the ability to provide something unique.
“Apart from Apple, these are essentially advertising businesses. So Facebook, for example, tracks what sites you go to, what you do and they can be very niche in terms of the advertising you get,” Kirk explained.
Organisations providing payment networks, such as Paypal, Visa and MasterCard, were other companies offering good investment opportunities as winners in the technological disruption era, she said.
“Look at payWave. Australians love payWave. I love payWave because I can actually record all my transactions and know exactly where my money’s going,” Kirk said.
“But 85 per cent of the world uses cash so the growth in the payments area is phenomenal.”
Kirk said Magellan had also identified companies providing enterprise software as other winners in regard to technological disruption.
“We have investments in enterprise software such as Oracle. Oracle is a massive database provider and pretty much has a 40 per cent share of the market’s use for databases,” she explained.
According to Kirk, the aim for investors should be to find those companies that are going to be the winners from technology and those that are going to be at low risk of technological disruption.