DNB Technology: 25 years of investing in the winners of technology
When DNB Technology was launched in August 2001, the technology sector was in a challenging period. The dot-com bubble had burst, technology companies around the world had sharply declined in value, and investors' confidence in the sector had weakened. In the midst of this turbulent period, the foundation was laid for what would later become one of the Nordic region's most successful technology funds.
25 years later, the strategy has delivered an average annual return of 18.7 percent. Approximately 1.92 billion euros in net deposits have grown to around 10.7 billion euros in assets under management. The development illustrates how long-term investments in structural technology trends can create significant value over time.
Technology as a long-term growth strategy
Over the last 25 years, technology has evolved from being a limited sector to becoming an integral part of the global economy. Digitalization has changed business models, streamlined production, and created new markets. Technology companies have increasingly become central drivers of productivity growth and economic development.
For investors, this has created an investment universe characterized by both significant opportunities and high risks. While many companies have disappeared along the way, others have evolved into global market leaders. The fund's investment philosophy has therefore been based on fundamental analysis and the identification of companies with lasting competitive advantages, rather than exposure to short-term market trends.
DNB Technology Since Inception
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DNB Technology grew from EUR 9 to EUR 624 over 25 years. The chart is logarithmic. Source: DNB.
The winners of the internet and the rise of digital market leaders
A central factor behind the fund's development has been exposure to companies that have since become leading players in the digital economy. Google, Microsoft, and Amazon are among the companies that, through innovation and strong market position, have revolutionized search, software, digital infrastructure, and e-commerce.
The managers at DNB Technology identified the potential in several of these companies early on. In the fund's anniversary interview, it is described how the team met Google before its IPO and later chose to retain the company as a central investment for many years. This illustrates the importance of active management, closeness to the industry, and the ability to assess technological innovations before they become widely recognized by the market.
The period also demonstrated the importance of company selection. Many companies disappeared, while the most competitive businesses laid the foundation for the digital economy that emerged in the years that followed.
DNB Technology in the 2000s
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DNB Technology in the 2000s. The chart is logarithmic. Source: DNB.
Experiences from market turbulence
The history of the fund has been marked by several periods of significant uncertainty, including the financial crisis, the euro crisis, and the COVID-19 pandemic. These events show how technology companies are affected by broader economic conditions, even when the long-term growth prospects remain intact.
In such periods, the quality of companies' balance sheets, business models, and competitive positions becomes particularly important. Experiences show that market turbulence can often create attractive investment opportunities, as quality companies are sometimes traded at levels that do not fully reflect their long-term value creation potential.
The value chain behind digitalization
Throughout the 2010s, smartphones, cloud services, and social media became central drivers of technological growth. At the same time, it became clear that value creation was not only taking place among the most visible technology companies.
According to the managers, many of the most interesting investment opportunities have arisen further down the value chain. Companies that provide semiconductors, memory components, storage solutions, and networking equipment have been crucial for the development of digitalization. As data volumes increased and the demand for processing power grew, these companies gained an increasingly important role in the technology ecosystem.
This development illustrates the importance of understanding which companies enable technological innovation, not just which companies are most visible to end users.
DNB Technology in the 2010s
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DNB Technology in the 2010s. The chart is logarithmic. Source: DNB.
Artificial intelligence as the next growth phase
Today, artificial intelligence is the most important technological driver in the sector. Investments in AI infrastructure have increased significantly, and the demand for advanced semiconductors, data storage, and processing capacity has grown sharply. The managers have highlighted that developments in AI have progressed faster than many expected, especially regarding the scale of investments in the infrastructure required to support the technology.
Artificial intelligence simultaneously represents more than a single technology. The development affects the entire value chain within technology, from companies that develop language models and software to manufacturers of semiconductors, memory components, and data infrastructure. Value creation will therefore likely be distributed across several parts of the ecosystem, as previous technological innovations have also shown.
At the same time, it remains uncertain which companies will become the biggest value creators in the long run. History shows that technological revolutions rarely follow a linear development, and that today's market leaders are not necessarily the same as those that will dominate the market in ten years.
For investors, this means that the ability to identify the underlying value drivers is often more important than trying to predict the short-term market winners.
DNB Technology in the 2020s
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DNB Technology in the 2020s. The chart is logarithmic. Source: DNB.
In summary, DNB Technology's first 25 years demonstrate how long-term investments in structural technology trends can create significant value over time. From the breakthrough of the internet and the rise of global technology giants to today's investments in artificial intelligence, the sector has been characterized by continuous innovation and structural growth.
At the same time, history shows that technology investments require patience, discipline, and the ability to look beyond short-term market turbulence. For investors seeking exposure to long-term growth trends, understanding the driving forces of technology remains a central prerequisite for value creation.
For investors seeking more insight into the fund's history, investment philosophy, and experiences through various market cycles, we refer to the anniversary podcast and the interview with the managers.
Go to the fund's website.
