Morningstar

Europe’s Largest Tech Funds: How Has Polar Capital Beaten Rivals?

From Nvidia and Broadcom to software and e-commerce, we examine how portfolio construction has shaped returns at Europe’s biggest technology funds.

Collage illustration featuring imagery of technology database center and semiconductors on a scatterplot.

Key Takeaways

  • Polar Capital Global Technology has significantly outperformed Fidelity Global Technology and BGF World Technology, particularly over three- and five-year periods.
  • Semiconductor exposure can explain the returns differences between the three funds.
  • The Fidelity fund offers broader sector and geographic diversification, while BlackRock and Polar Capital funds have greater exposure to US technology leaders and companies positioned to benefit from AI.

The global technology sector has been one of the most profitable sectors so far this year. As of July 17 the Morningstar Developed Markets Technology Index posted a year-to-date return of 17.7% in euros, second only to the energy sector. Over the same period, the Morningstar Global Markets Index gained 13.0%.

Technology Funds Have Sharply Different Returns

The three largest European funds by assets under management in the category, Fidelity Global Technology, BGF World Technology and Polar Capital Global Technology, have posted significant differences in returns for 2026.

The differences are also very marked over longer time horizons: over three years, the Polar Capital fund has generated an annualized return of 53.8%, compared with 33.1% for the BlackRock fund and 20.3% for the Fidelity fund. Over five years, Polar’s annualized return almost doubles that of its competitors.

These results reflect very distinct investment strategies. Although all three funds share a strong exposure to the technology sector, they differ in terms of geographical distribution and, above all, in the industries and companies they invest in.

Tech Funds Look Beyond Technology

The first difference becomes apparent when analyzing sector allocation. Although all three funds fall within the technology sector category, they do not invest their entire portfolio in this sector. They also invest in sectors such as communication services, with Alphabet GOOGL as a key example, or cyclical consumer, with Amazon AMZN as a major holding.

Fidelity Global Technology fund is, by far, the least concentrated in pure technology stocks. Only 68.2% of the portfolio is invested in companies classified within the technology sector, compared with 81.5% for BlackRock World Technology and 79.8% for Polar Capital Global Technology.

This lower concentration is due to a much greater exposure to communication services (12.8%) as well as significant holdings in cyclical consumer goods (7.1%) and industrials (4.2%). Fidelity fund takes a broader view of the technology ecosystem, incorporating companies that benefit from digitalization even if they do not strictly belong to the technology sector.

In terms of industry exposure, Fidelity spreads its investments across infrastructure software (11.6%), application software (11.2%), semiconductor equipment (9.9%), internet content (8.0%), e-commerce (5.7%), consumer electronics (5.7%) and technology services (4.4%). By contrast, only 20.9% of the portfolio is invested in semiconductor manufacturers.

This positioning has resulted in a more balanced portfolio that is likely less dependent on a single growth driver. However, it has also meant a smaller share of the spectacular stock market performance of the segment that has led the market since 2023: chip manufacturers linked to artificial intelligence.

Semiconductors Are the Winning Bet

In contrast to Fidelity’s more diversified approach, both BGF World Technology and Polar Capital Global Technology have built much more concentrated portfolios centered on the infrastructure required for the development of artificial intelligence.

In both cases, around 37% of assets are invested in semiconductor manufacturers, almost double the proportion in the Fidelity fund. This difference is particularly significant when one considers that companies such as Nvidia NVDA, Broadcom AVGO, and AMD AMD have been among the main drivers of the technology sector’s rise in value in recent years.

However, although both funds have very similar exposure to chip manufacturers, there are significant differences for the rest of the portfolio.

BGF complements this focus with high exposure to consumer electronics (10.2%), where Apple AAPL typically accounts for a significant portion of the fund’s assets, as well as a substantial weighting in semiconductor equipment manufacturers (9.3%) and infrastructure software (7.6%). By contrast, it invests very little in application software or e-commerce.

Polar Capital maintains a different portfolio. It reduces its weighting in semiconductor equipment manufacturers (5.5%) and consumer electronics (3.6%), but increases its exposure to hardware (6.8 %) and internet and digital content companies (5.0%). Overall, its portfolio appears to be more focused on companies directly linked to the structural growth of artificial intelligence and high-performance computing.

Geography Also Makes a Difference

The differences are not only evident across industries, but also across regions.

The Fidelity fund once again stands out as the most geographically diversified fund. Only 52% of the portfolio is invested in the United States, whilst 18% is allocated to Europe and 26% to Asia.

The BlackRock and Polar funds display a very different profile. Both concentrate two-thirds of their assets in US companies, 68% and 66% respectively, reflecting a firm commitment to the major US technology firms that have led the market in recent years.

The differences become apparent in Europe. While Fidelity maintains exposure of around 20%, BlackRock invests just 2% and Polar Capital, 5%. Exposure to Asia, however, is relatively similar across the three funds, ranging between 24% and 27%, driven mainly by semiconductor and technology component manufacturers.

This allocation helps to explain part of the difference in performance. In recent years, the US stock market has accounted for a large proportion of value creation in the technology sector, driven by companies such as Nvidia, Microsoft MSFT, Broadcom, Amazon and Meta. Greater exposure to this market has provided a significant tailwind for BGF and Polar.

Key Morningstar Metrics For The Largest Technology Funds

BlackRock World Technology Fund

Stephen Welch, senior fund analyst for Morningstar, says: “The fund stands out for its experienced leadership and disciplined framework for navigating the technology landscape, making it an appealing option at the right price. Few tech managers have the experience that lead manager Tony Kim brings to this strategy. His 11-year tenure places him in the top quartile of technology Morningstar Category peers, but his expertise extends far beyond that and is tough to match.”

Polar Capital Global Technology Fund

Michael Born, fund analyst for Morningstar, considers the fund as a compelling technology strategy. “The fund continues to benefit from a best-in-class, sizable team with an approach that benefits its setup. We retain People and Process Pillar ratings at High and Above Average, respectively. Both managers, Nick Evans and Ben Rogoff are thoughtful and diligent investors who bring a wealth of experience in the sector, backed by strong connections to the industry. Having invested through multiple technology and investment cycles, the managers continue to be well prepared to navigate an ever-evolving technology sector.”

Fidelity Global Technology Fund

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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