Guests on the latest edition of the FTAdviser podcast discuss some of the assumptions underpinning the long-term investment case for the group of large cap technology companies known as the Faangs.
The Faang stocks are Facebook, Apple, Amazon, Netflix and Google.
Mark Hawtin, who runs the GAM Star Disruptive Growth fund said that while the share prices of those businesses all moved upwards in line with each other, and in 2022 fell broadly in line with each other, his expectation now is that this correlation will end.
He said: “Going forward I think each of those companies will be judged on their underlying business. Google, for example, is an advertising business, and I think that is what people will focus on.”
Richard Saldanha, who runs the Global Equity Income fund at Aviva Investors said: “The correlations really moved in line with the interest rate cycle. And so last year as rates went up, those share prices went down.
"But as we approach the point (where rates stop going up) that should mean those share prices stop moving in line with each other and instead perform based on the fundamentals as businesses.”
Also appearing on the podcast, David Coombs, head of multi-asset funds at Rathbones Unit Trust Management, said: “One of the issues these companies face is that really they are quite mature conglomerates now.
"And some of them face competitors who are newer and have deep pockets.”
david.thorpe@ft.com