The ‘overhyped’ BitCoin, an electronic payment method, is a similar innovative product that should do well on paper but could be impossible for some companies to adopt, hence restricting its investment potential.
With whole sectors at risk from disruptive tech, Chillingworth said active investing may well be the best way to avoid the pitfalls of investing in new corporate ventures and believed the UK is well set to cash in on commercially-successful tech companies.
“Whichever approach investors take, disruptive technologies could have a disastrous effect on investment portfolios, as whole sectors are at risk of obsolescence,” he said.
“Active investing is arguably better suited to this challenge, as technologically vulnerable behemoths can be avoided in favour of more agile ‘new tech’ companies.
“Essentially, passive investors run the risk of holding a portfolio of canal operators just as the railway companies are about to take off. While this is not the place to rerun the active versus passive debate, active portfolios can more easily invest in the leaders of tomorrow.”
