DNB Technology - Portfolio Manager's commentary 06/2015

Nito Simonsen: Welcome to DNB Wealth Management! I‘m standing here with Sverre Bergland, portfolio manager of the DNB Technology. Sverre, we have just finished a seminar on global equities where you had a very good presentation. We had you here last year. Fantastic performance last year, fantastic performance again this year. Congratulations.

Sverre Bergland: Thank you.

N.S.: In your presentation you are talking about TV, that YouTube is the largest TV channel for young people under 26 years of age.

S.B.: Yes and it goes into one of the more interesting themes that we see now, and that’s the development in the TV industry where we see traditional TV struggling because – to your point – young people choose other channels. They choose YouTube, they choose Netflix, they will be on Apple TV. All this creates an opportunity for the Googles of the world, Amazons of the world, Apples of the world, but it will also we believe be a major headwind for the traditional TV broadcasters who rely on advertising. One hour spent on Apple TV or Netflix is one hour less spent in traditional TV. So we see this as a very, very interesting trend to monitor over the next period, let’s say three years, we think there will be dramatic changes.

N.S.: So, is this to say that CNN and Fox News will disappear from our TV screens in let’s say 10 years?

S.B.: I think just on news it is a little bit tricky because that sort of thing needs to be fresh. So I would be more worried around TV stations showing all the shows and the movies alike: there will be more challenges. But the broadcasters in general we believe will be in trouble in the next three years.

N.S.: Two other themes that you have been talking about today is the Internet, the growing Internet populations seen in Asia and you also had a bit about self-driving cars in California.

S.B.: Yes, to start to with the Internet. There will be a dramatic increase in the number of people coming onto Internet over the next five years. Most of this growth will come from emerging markets. This will create a very interesting investment opportunity in that there will be services that will be provided for this growing population. So we are trying to find investments within that area. When it comes to the driverless cars - a little bit more of a curiosity - but this is happening actually right now and we believe that let’s say in the next five years this will be a reality. And Google as we have talked about many times is in the forefront of this development. So we believe that could be a positive trend for that company.

N.S.: A bit more about Google because this has been one of your favourites for many, many years really and is again at the top of your stock holdings list.

S.B.: Yes it’s a stock that we have been investing in for a very long time. The reason is that we believe that they have strong positions in almost any of the relevant arche-trends these days. The stock, the company is growing nicely; we will put that at 15 percent clip which is much higher than the overall market while the multiple is not that high. So with the things that we have been talking about and also with the support of valuation we believe this will be a very strong contributor to our performance over the next period.

N.S.: Final question: we are mid-June now, heading into summer. What is your gut feeling about the markets during summer and early fall? And having said that, you are obviously not a macro analyst.

S.B.: Tough question, obviously, to answer where the market will be going, as it is not our main focus. But I think in every discussion we have around stocks now there will always be a component that is called the interest rates. So if you tell me where the interest rate is going I will tell you where the market is going.

N.S.: We will do that after the camera is turned off. Thank you Sverre and I wish you a very good summer.

S.B.: Thank you.

N.S.: And thank you guys for watching.