He says investors still recall the bursting of the dot-com bubble around the turn of the millennium even while the industry is more mature and stable now, particularly the larger companies in the index.
However with high earnings expectations often priced in, Mr Seager-Scott says increasing markets can support these expectations but falling markets can hurt these funds as investor sentiment turns on this area of the market.
Juliet Schooling Latter, research director of Chelsea Financial Services, says the sectors are quite cyclical so will do better when economies are doing well and companies and people are spending more on new technologies.
Although global equity markets have been continuing their steady rise as the economic recovery continues, Jeremy Gleeson, manager of the Axa Framlington Global Technology fund, says the technology sector is prone to periodic bouts of volatility, most recently this has been in the internet and software space.
Mr Gleeson says: “The global technology sector is in the early stages of a multi-year investment cycle.
“Innovation is driving significant change in both consumer and business behaviours. Consumer demand for new, ‘must-have’ devices is strong, while enterprise spending on technology is growing as companies look to reduce costs and enhance productivity.”
