Get ahead with RCM's fast-paced tech stockpicking

Historically, the RCM Technology Trust (RTT) hasn't performed as well as its rival - Polar Capital Technology (a member of the IC's Top 100 Funds) - but recently the tables have turned.

The Allianz-managed investment trust has stormed ahead, returning 30.59 per cent over one year and 55.61 per cent over three years. It's also trading on a -9.82 per cent discount - another reason why it looks more attractive than Polar Capital Technology (PCT), which is currently only on a -3.05 per cent discount.

RCM's manager, Walter Price, is a seasoned stockpicker with 40 years' experience and has a good eye for finding value. If there's one thing he doesn't do, it's sticking to the index (Dow Jones World Technology index). His principal focus is on growth technology companies that do not pay a dividend, and as a result neither does the trust - and nor does it have any intention of doing so in the future. Pure growth is what it's all about.

His biggest holding is Google (6.3 per cent of the portfolio), which Mr Price likes because, despite its size, he believes it is still a good value stock that's at the forefront of technology. But when it comes to rival giant Apple, he's not as keen. This is because he sees it as a company that has carved a path for other companies to stroll along - a process that has cost it a lot of money and diminished its value as an investment.

But large-caps are not the main focus of the trust, which consists mainly of mid- and small-cap companies - mainly based in the US (around 80 per cent of the portfolio) and concentrated in Silicon Valley, the hotbed for technological innovation.

Its best recent success with an individual share has been with US car manufacturer Tesla. Its share price was up 95 per cent in May, which provided a big boost to the fund's NAV, helping it beat the benchmark. The company has won over US consumers with its cars, which attracted rave reviews by a number of car magazines. And Mr Price was able to identify this early as he had extra eyes and ears out in force, scouting out car showrooms and interviewing people on the spot about what they thought of the cars.

Mr Price also puts the fund's recent success down to having sold Apple in the autumn, putting money into the internet and green technology sectors instead. Propelling the fund forward in the near future will be smartphone application developers and green tech stocks, he says. This is unless the world reverts to a macro-driven market again where investors start fleeing risk - a situation he describes as the fund's biggest threat.

So is there a case for dumping Polar Capital Technology in favour of Allianz's offering? Yes, according to Finn Bodman, investment banking and securities specialist at Investec. He says the strong performance and wide discount are enough to warrant a move, but he warns that the RCM Technology Trust is likely to be less liquid than the Polar Trust because of its smaller size, which might put some investors off. And the smaller underlying stocks also make it a more volatile, high-risk fund.

But if you're looking for a portfolio risk injection and like the idea of fast-paced small- to mid-cap stockpicking that produces pure growth, this fund looks attractive. Buy.