Polar Capital Fund Exits Adobe, Shifts to Semiconductors with Nvidia Near 10%
Polar Capital’s $12 billion tech fund has exited Adobe and application software names, citing AI tools like Claude Cowork as an existential threat. The manager holds seven of top ten positions in semiconductor companies—led by Nvidia at nearly 10%—after a US software ETF fell 22% YTD.
1. Performance and Rationale
Nick Evans’s $12 billion global tech fund outperformed 99% of peers over one year and 97% over five, but exited Adobe and other application software holdings. He argues that rapid AI coding tools, including Claude Cowork, could replicate and alter today’s software, posing an existential threat to traditional application vendors.
2. Portfolio Reallocation
At month-end January, seven of the fund’s top ten positions were in semiconductor stocks, with Nvidia accounting for nearly 10% of the portfolio. The manager has also increased exposure to networking equipment, fiber optics and data-center power and energy infrastructure businesses.
3. Software Sector Impact
A US software ETF tracking application stocks has fallen 22% YTD, contrasting with semiconductor gains as AI drives demand for computing power. The manager warns that pressured software share prices may force equity-compensated firms to raise cash payouts, potentially weighing on free cash flow.