Polar Capital Exits HubSpot, Shifts to Semiconductors After Software ETF Drops 22%
Polar Capital’s $12 billion global tech fund, which beat 99% of peers over one year, exited its entire HubSpot position citing AI coding tools that can replicate existing application software. The manager has shifted into semiconductors, network gear, fiber optics and data-center power after a software ETF plunged 22% YTD.
1. Fund Performance and Position Exits
Polar Capital’s $12 billion global technology fund outperformed 99% of peers over one year and 97% over five, prompting manager Nick Evans to liquidate all application software holdings, including HubSpot, due to advances in AI coding tools that can reproduce and modify existing software.
2. Market Impact and ETF Performance
Application software stocks tumbled as AI tools eroded perceived moats, dragging a US software sector ETF down 22% year-to-date, while semiconductor shares soared on rising hardware demand for AI workloads.
3. Reallocation Strategy
The fund has reallocated capital into semiconductor firms—with Nvidia occupying nearly 10% of the portfolio—as well as networking equipment, fiber-optic manufacturers and data-center power infrastructure providers to capture growth driven by AI hardware needs.