2020 has been a year most of us would rather forget but for technology stocks it was a strong year, largely because many of our underlying core secular themes and holdings did well. We still believe many of the work from home (WFH) technology beneficiaries remain well positioned for 2021, likely to deliver strong growth and upside to estimates and – though some will face headwinds or tougher competition – will remain supported by powerful, multi-year, secular tailwinds.

The strong trends in the adoption of technology that existed before 2020 have been accelerated by the coronavirus crisis and are likely to continue for many years to come.

The strong trends in the adoption of technology that existed before 2020 have been accelerated by the coronavirus crisis and are likely to continue for many years to come. As such, while valuations have expanded, we still see many attractive stocks capable of delivering robust growth with the potential for significant upside to 2021 estimates. We intend to stay exposed to those stocks where valuations do not already reflect all the above.

We also see scope for more cyclical technology stocks to gradually recover, along with some potential for multiple compression of high growth stocks during the current rotation. We have already begun the process of selectively rotating further towards some of these more economically sensitive stocks but are still focusing on those exposed to our eight core themes with powerful secular tailwinds and scope for market share and/or significant content gains.

We are not yet positioned for a full-blown recovery, more so for a continuation of the status quo, but we are taking a more balanced approach for now anticipating some macroeconomic improvement ahead.