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1For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Polar Capital Technology Trust
8 November 2018
This presentation is for non-US investor use onlywwwpolarcapitalcouk
2For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 The Polar Capital Technology Trust was awarded the Money Observer Rated Fund award
bull Technology is at the core of the Polar Capital business
bull One of the largest technology franchises in Europe with cUS$58bn under management
bull Seven dedicated technology specialists ndash strong multi-cycle track record
Introduction To The Team
Miss Fatima IuFund ManagerAnalystInvestment experience 12 years
Sectors Europe (all-cap) global security networking energy amp med tech
Mr Ben RogoffDirector - TechnologyInvestment experience 23 years
Sectors US (midlarge-cap)
Polar Capital Technology Trust (LSE listed)
US$24bn
Global Technology Fund
US$30bn
Mr Nick EvansSenior Fund ManagerInvestment experience 20 years
Sectors US (smallmid-cap)
Mr Xuesong ZhaoFund ManagerAnalystInvestment experience 11 years
Sectors Asia (all-cap) global semi Semi cap equipment
Mr Bradley ReynoldsInvestment AnalystInvestment experience 11 years
Sectors US (all-cap) ndash Internet amp digital media
Mr Paul JohnsonInvestment AnalystInvestment experience 6 years
Sectors Emerging Tech inc 3D printing gaming amp autos
Mr Chris Wittstock (based in US)Senior Investment AnalystInvestment experience 34 years
Sectors US Technology Software
SeniorFund Managers
Analysts
Funds
Fund Managers
Automation amp AIFund
US$359m
3For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Investment Framework
4000+ universe
Thematic overview Dynamic definition of technologyReal-world changes in user behaviour
What we look for S-Curve inflectionsSecular themes pure-plays
What we avoid Last-generation winnersPublic venture capital
Portfolio construction Bottom-up stock pickingBenchmark aware
Valuation Growth bias ndash revearnings cash flowPrice targets (bullbasebear) Risk reward
Sell disciplines Mis-execution model changePrice level attainmentPortfolio
Source Polar Capital
4For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Slope of enlightenment
InnovationTrigger
Trough ofdisillusionment
Plateau ofproductivity
Volumetric Displays
Neuromorphic Hardware
Deep Learning
ConversationalUser Interface
IoT Platform
Augmented Data Discovery
Serverless PaaS
Smart Workforce
Quantum Computing
5G
Artificial GeneralIntelligence
Cognitive Computing
4D printing
Commercial UAVs (Drones)
Brain Computer Interface
Edge Computing
Smart Robots
Cognitive Expert Advisors
Enterprise Taxonomy and Ontology Management
Virtual Personal Assistants Machine Learning
Software Defined Security
Autonomous VehiclesNanotube Electronics
Connected Home
Blockchain
No growthuncertain declining OM
Thematic Investing Hype vs Reality
Source Polar Capital amp Gartner July 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Positioning of themesproducts above is only intended to be indicative of approximate penetrationmaturity
Maturity DeclineldquoBlue Skyrdquo Emerging Mainstream
RampDnegative OM
High growthexpanding OM
Low growthstable OM
Sale
s
Early stageinvestors Index ETF
Polar Capital Global Technology Team
ldquoValue TraprdquoDeveloped market smartphones
PNDGPS
LCD TV HDTV
Enterprise software
PVRDVR (Sky+)
Home Broadband
Notebooks
ERP Traditional software
Desktop PC printers
DVD
Feature phones 3G
VCR
Digital Camera (DSC)
Mainframe
IT Services
Electric vehicles
Internet of Things (IoT) M2M communication
Enterprise SSD 64 bit ARM architecture
Mobile social location based advertising
Clean energy (solar amp wind)
Wireless Networking (80211n ac)
Mobile broadband (4G LTE)
Software as a Service (SaaS)
Server amp Storage Virtualisation
Virtual Reality
EM smartphones amp EcommerceInternet
Tablets Ultrabooks (including Mac Air)
Smart agriculture factory automation robotics
Voice over LTE WiFI (VoLTE VoWiFI)
Cloud computing (publicprivate ndash PaaSIaaS)
Big data predictive analytics HadoopCyber security app control IPS
Software defined networking (SDN) NFV 100G optical FTTx)
Mobile payments mCommerce NFC biometrics
Moorersquos stress rising semi capital intensity
3D printing
eCommerce online advertising
Multiplayer mobile gaming streaming media
Expe
ctat
ions
Smart dust
Virtual Reality
TimeYears to mainstream adoption
Human Augmentation
Less than 2 years 2 to 5 years 5 to 10 years Obsolete before plateauMore than 10 years
Augmented Reality
Searching for revenue growth and cash flow inflections
Energy Storage
Deep ReinforcementLearning
Digital Twin
Peak ofInflated
expectation
5For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Technology PE Expansion In-line With Market
Source Ned Davis 12 October 2018 Copyright 2018 Ned Davis Research Inc Further distribution prohibited without prior permission All Rights Reserved See NDR Disclaimer at wwwndrcomcopyrighthtml For data vendor disclaimers refer to wwwndrcomvendorinfo Past performance is not indicative or a guarantee of future returns
Absolute sector valuation (PE)Compelling vs history (1992 ndash present)
Relative sector valuation (PE)At around market level ndash with superior balance sheet
6For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
Software as a Service (SaaS) valuationEVforward 12 month revenue multiples2
Internet valuation (equal cap weighted) EVforward 2 year EVEBITDA levels1
Source 1 Bloomberg 25 October 2018 UCITS Internet sector (AMZNFBGOOGBABA700HKPYPL) vs Bank of America Merrill Lynch Internet sector Index 2 KeyBanc Capital Markets 25 October 2018 Past performance is not indicative or a guarantee of future returns
0
5
10
15
20
25
Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Jul-16 Feb-17 Sep-17 Apr-18
ML Internet Index
7For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
IT security valuation EVforward 12 month revenue multiples1
Cloud vs legacy valuationEVtrailing 12 month revenue multiples2
Source 1 Citi Research FactSet 26 October 2018 2 Merill Lynch 26 October 2018 Past performance is not indicative or a guarantee of future returns
0x
2x
4x
6x
8x
10x
12x
14x
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Jan-
16M
ay-1
6Se
p-16
Jan-
17M
ay-1
7Se
p-17
Jan-
18M
ay-1
8Se
p-18
EV t
railin
g 12
mon
th s
ales
LEGACY CLOUD
8For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Select MampA activity2
Date Target Acquirer Premium Value $mMay-12 Ariba SAP 19 4324
Aug-12 Kenexa IBM 42 1260
Oct -12 OPNET Riverbed 31 912
June-13 ExactTarget Salesforce 50 2419
Jul -13 Sourcefire Cisco 29 2185
Dec-13 Responsys Oracle 38 1438
Sept-14 Concur SAP 28 7241
Nov-14 Sapient Publicis 70 3264
Feb-15 Freescale NXP 2 17469
Apr-15 Informatica PE consortium 11 4784
May-15 Altera Intel 18 14354
Oct-15 KLA-Tencor Lam Research 27 10955
Nov-15 King Digital Activision Blizzard 16 4881
Apr-16 Ruckus Wireless Brocade 45 1044
Apr-16 Cvent Vista Equity 68 1408
Jun-16 QLIK Technologies Thoma Bravo (PE) 5 2899
Jun-16 LinkedIn Microsoft 50 26401
Jun-16 Demandware Salesforce 56 2779
Jul-16 ARM Holdings SoftBank 43 22897
Jul-16 Netsuite Oracle 19 8716Sept -16 Arcam GE 53 688
Jan-17 AppDynamics Cisco 100 3700
Mar-17 Nimble Storage HP Enterprise 45 1000
Mar-17 Mobileye Intel 34 14131
Mar-18 MuleSoft Salesforcecom 36 5667June-18 GitHub Microsoft Private 7500
June-18 Adaptive Insights Workday Private 1550
Sept-18 Marketo Adobe Private 4750
Source 1 Centaur Partners December 2015 2 Bloomberg and Polar Capital August 2018 3 EampY June 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Valuations Supported By Elevated MampAhellip
Cash amp equivalents at top 25 tech companies3
Technology MampA since 19951
BOLD owned in Fund
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
2For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 The Polar Capital Technology Trust was awarded the Money Observer Rated Fund award
bull Technology is at the core of the Polar Capital business
bull One of the largest technology franchises in Europe with cUS$58bn under management
bull Seven dedicated technology specialists ndash strong multi-cycle track record
Introduction To The Team
Miss Fatima IuFund ManagerAnalystInvestment experience 12 years
Sectors Europe (all-cap) global security networking energy amp med tech
Mr Ben RogoffDirector - TechnologyInvestment experience 23 years
Sectors US (midlarge-cap)
Polar Capital Technology Trust (LSE listed)
US$24bn
Global Technology Fund
US$30bn
Mr Nick EvansSenior Fund ManagerInvestment experience 20 years
Sectors US (smallmid-cap)
Mr Xuesong ZhaoFund ManagerAnalystInvestment experience 11 years
Sectors Asia (all-cap) global semi Semi cap equipment
Mr Bradley ReynoldsInvestment AnalystInvestment experience 11 years
Sectors US (all-cap) ndash Internet amp digital media
Mr Paul JohnsonInvestment AnalystInvestment experience 6 years
Sectors Emerging Tech inc 3D printing gaming amp autos
Mr Chris Wittstock (based in US)Senior Investment AnalystInvestment experience 34 years
Sectors US Technology Software
SeniorFund Managers
Analysts
Funds
Fund Managers
Automation amp AIFund
US$359m
3For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Investment Framework
4000+ universe
Thematic overview Dynamic definition of technologyReal-world changes in user behaviour
What we look for S-Curve inflectionsSecular themes pure-plays
What we avoid Last-generation winnersPublic venture capital
Portfolio construction Bottom-up stock pickingBenchmark aware
Valuation Growth bias ndash revearnings cash flowPrice targets (bullbasebear) Risk reward
Sell disciplines Mis-execution model changePrice level attainmentPortfolio
Source Polar Capital
4For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Slope of enlightenment
InnovationTrigger
Trough ofdisillusionment
Plateau ofproductivity
Volumetric Displays
Neuromorphic Hardware
Deep Learning
ConversationalUser Interface
IoT Platform
Augmented Data Discovery
Serverless PaaS
Smart Workforce
Quantum Computing
5G
Artificial GeneralIntelligence
Cognitive Computing
4D printing
Commercial UAVs (Drones)
Brain Computer Interface
Edge Computing
Smart Robots
Cognitive Expert Advisors
Enterprise Taxonomy and Ontology Management
Virtual Personal Assistants Machine Learning
Software Defined Security
Autonomous VehiclesNanotube Electronics
Connected Home
Blockchain
No growthuncertain declining OM
Thematic Investing Hype vs Reality
Source Polar Capital amp Gartner July 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Positioning of themesproducts above is only intended to be indicative of approximate penetrationmaturity
Maturity DeclineldquoBlue Skyrdquo Emerging Mainstream
RampDnegative OM
High growthexpanding OM
Low growthstable OM
Sale
s
Early stageinvestors Index ETF
Polar Capital Global Technology Team
ldquoValue TraprdquoDeveloped market smartphones
PNDGPS
LCD TV HDTV
Enterprise software
PVRDVR (Sky+)
Home Broadband
Notebooks
ERP Traditional software
Desktop PC printers
DVD
Feature phones 3G
VCR
Digital Camera (DSC)
Mainframe
IT Services
Electric vehicles
Internet of Things (IoT) M2M communication
Enterprise SSD 64 bit ARM architecture
Mobile social location based advertising
Clean energy (solar amp wind)
Wireless Networking (80211n ac)
Mobile broadband (4G LTE)
Software as a Service (SaaS)
Server amp Storage Virtualisation
Virtual Reality
EM smartphones amp EcommerceInternet
Tablets Ultrabooks (including Mac Air)
Smart agriculture factory automation robotics
Voice over LTE WiFI (VoLTE VoWiFI)
Cloud computing (publicprivate ndash PaaSIaaS)
Big data predictive analytics HadoopCyber security app control IPS
Software defined networking (SDN) NFV 100G optical FTTx)
Mobile payments mCommerce NFC biometrics
Moorersquos stress rising semi capital intensity
3D printing
eCommerce online advertising
Multiplayer mobile gaming streaming media
Expe
ctat
ions
Smart dust
Virtual Reality
TimeYears to mainstream adoption
Human Augmentation
Less than 2 years 2 to 5 years 5 to 10 years Obsolete before plateauMore than 10 years
Augmented Reality
Searching for revenue growth and cash flow inflections
Energy Storage
Deep ReinforcementLearning
Digital Twin
Peak ofInflated
expectation
5For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Technology PE Expansion In-line With Market
Source Ned Davis 12 October 2018 Copyright 2018 Ned Davis Research Inc Further distribution prohibited without prior permission All Rights Reserved See NDR Disclaimer at wwwndrcomcopyrighthtml For data vendor disclaimers refer to wwwndrcomvendorinfo Past performance is not indicative or a guarantee of future returns
Absolute sector valuation (PE)Compelling vs history (1992 ndash present)
Relative sector valuation (PE)At around market level ndash with superior balance sheet
6For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
Software as a Service (SaaS) valuationEVforward 12 month revenue multiples2
Internet valuation (equal cap weighted) EVforward 2 year EVEBITDA levels1
Source 1 Bloomberg 25 October 2018 UCITS Internet sector (AMZNFBGOOGBABA700HKPYPL) vs Bank of America Merrill Lynch Internet sector Index 2 KeyBanc Capital Markets 25 October 2018 Past performance is not indicative or a guarantee of future returns
0
5
10
15
20
25
Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Jul-16 Feb-17 Sep-17 Apr-18
ML Internet Index
7For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
IT security valuation EVforward 12 month revenue multiples1
Cloud vs legacy valuationEVtrailing 12 month revenue multiples2
Source 1 Citi Research FactSet 26 October 2018 2 Merill Lynch 26 October 2018 Past performance is not indicative or a guarantee of future returns
0x
2x
4x
6x
8x
10x
12x
14x
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Jan-
16M
ay-1
6Se
p-16
Jan-
17M
ay-1
7Se
p-17
Jan-
18M
ay-1
8Se
p-18
EV t
railin
g 12
mon
th s
ales
LEGACY CLOUD
8For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Select MampA activity2
Date Target Acquirer Premium Value $mMay-12 Ariba SAP 19 4324
Aug-12 Kenexa IBM 42 1260
Oct -12 OPNET Riverbed 31 912
June-13 ExactTarget Salesforce 50 2419
Jul -13 Sourcefire Cisco 29 2185
Dec-13 Responsys Oracle 38 1438
Sept-14 Concur SAP 28 7241
Nov-14 Sapient Publicis 70 3264
Feb-15 Freescale NXP 2 17469
Apr-15 Informatica PE consortium 11 4784
May-15 Altera Intel 18 14354
Oct-15 KLA-Tencor Lam Research 27 10955
Nov-15 King Digital Activision Blizzard 16 4881
Apr-16 Ruckus Wireless Brocade 45 1044
Apr-16 Cvent Vista Equity 68 1408
Jun-16 QLIK Technologies Thoma Bravo (PE) 5 2899
Jun-16 LinkedIn Microsoft 50 26401
Jun-16 Demandware Salesforce 56 2779
Jul-16 ARM Holdings SoftBank 43 22897
Jul-16 Netsuite Oracle 19 8716Sept -16 Arcam GE 53 688
Jan-17 AppDynamics Cisco 100 3700
Mar-17 Nimble Storage HP Enterprise 45 1000
Mar-17 Mobileye Intel 34 14131
Mar-18 MuleSoft Salesforcecom 36 5667June-18 GitHub Microsoft Private 7500
June-18 Adaptive Insights Workday Private 1550
Sept-18 Marketo Adobe Private 4750
Source 1 Centaur Partners December 2015 2 Bloomberg and Polar Capital August 2018 3 EampY June 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Valuations Supported By Elevated MampAhellip
Cash amp equivalents at top 25 tech companies3
Technology MampA since 19951
BOLD owned in Fund
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
3For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Investment Framework
4000+ universe
Thematic overview Dynamic definition of technologyReal-world changes in user behaviour
What we look for S-Curve inflectionsSecular themes pure-plays
What we avoid Last-generation winnersPublic venture capital
Portfolio construction Bottom-up stock pickingBenchmark aware
Valuation Growth bias ndash revearnings cash flowPrice targets (bullbasebear) Risk reward
Sell disciplines Mis-execution model changePrice level attainmentPortfolio
Source Polar Capital
4For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Slope of enlightenment
InnovationTrigger
Trough ofdisillusionment
Plateau ofproductivity
Volumetric Displays
Neuromorphic Hardware
Deep Learning
ConversationalUser Interface
IoT Platform
Augmented Data Discovery
Serverless PaaS
Smart Workforce
Quantum Computing
5G
Artificial GeneralIntelligence
Cognitive Computing
4D printing
Commercial UAVs (Drones)
Brain Computer Interface
Edge Computing
Smart Robots
Cognitive Expert Advisors
Enterprise Taxonomy and Ontology Management
Virtual Personal Assistants Machine Learning
Software Defined Security
Autonomous VehiclesNanotube Electronics
Connected Home
Blockchain
No growthuncertain declining OM
Thematic Investing Hype vs Reality
Source Polar Capital amp Gartner July 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Positioning of themesproducts above is only intended to be indicative of approximate penetrationmaturity
Maturity DeclineldquoBlue Skyrdquo Emerging Mainstream
RampDnegative OM
High growthexpanding OM
Low growthstable OM
Sale
s
Early stageinvestors Index ETF
Polar Capital Global Technology Team
ldquoValue TraprdquoDeveloped market smartphones
PNDGPS
LCD TV HDTV
Enterprise software
PVRDVR (Sky+)
Home Broadband
Notebooks
ERP Traditional software
Desktop PC printers
DVD
Feature phones 3G
VCR
Digital Camera (DSC)
Mainframe
IT Services
Electric vehicles
Internet of Things (IoT) M2M communication
Enterprise SSD 64 bit ARM architecture
Mobile social location based advertising
Clean energy (solar amp wind)
Wireless Networking (80211n ac)
Mobile broadband (4G LTE)
Software as a Service (SaaS)
Server amp Storage Virtualisation
Virtual Reality
EM smartphones amp EcommerceInternet
Tablets Ultrabooks (including Mac Air)
Smart agriculture factory automation robotics
Voice over LTE WiFI (VoLTE VoWiFI)
Cloud computing (publicprivate ndash PaaSIaaS)
Big data predictive analytics HadoopCyber security app control IPS
Software defined networking (SDN) NFV 100G optical FTTx)
Mobile payments mCommerce NFC biometrics
Moorersquos stress rising semi capital intensity
3D printing
eCommerce online advertising
Multiplayer mobile gaming streaming media
Expe
ctat
ions
Smart dust
Virtual Reality
TimeYears to mainstream adoption
Human Augmentation
Less than 2 years 2 to 5 years 5 to 10 years Obsolete before plateauMore than 10 years
Augmented Reality
Searching for revenue growth and cash flow inflections
Energy Storage
Deep ReinforcementLearning
Digital Twin
Peak ofInflated
expectation
5For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Technology PE Expansion In-line With Market
Source Ned Davis 12 October 2018 Copyright 2018 Ned Davis Research Inc Further distribution prohibited without prior permission All Rights Reserved See NDR Disclaimer at wwwndrcomcopyrighthtml For data vendor disclaimers refer to wwwndrcomvendorinfo Past performance is not indicative or a guarantee of future returns
Absolute sector valuation (PE)Compelling vs history (1992 ndash present)
Relative sector valuation (PE)At around market level ndash with superior balance sheet
6For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
Software as a Service (SaaS) valuationEVforward 12 month revenue multiples2
Internet valuation (equal cap weighted) EVforward 2 year EVEBITDA levels1
Source 1 Bloomberg 25 October 2018 UCITS Internet sector (AMZNFBGOOGBABA700HKPYPL) vs Bank of America Merrill Lynch Internet sector Index 2 KeyBanc Capital Markets 25 October 2018 Past performance is not indicative or a guarantee of future returns
0
5
10
15
20
25
Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Jul-16 Feb-17 Sep-17 Apr-18
ML Internet Index
7For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
IT security valuation EVforward 12 month revenue multiples1
Cloud vs legacy valuationEVtrailing 12 month revenue multiples2
Source 1 Citi Research FactSet 26 October 2018 2 Merill Lynch 26 October 2018 Past performance is not indicative or a guarantee of future returns
0x
2x
4x
6x
8x
10x
12x
14x
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Jan-
16M
ay-1
6Se
p-16
Jan-
17M
ay-1
7Se
p-17
Jan-
18M
ay-1
8Se
p-18
EV t
railin
g 12
mon
th s
ales
LEGACY CLOUD
8For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Select MampA activity2
Date Target Acquirer Premium Value $mMay-12 Ariba SAP 19 4324
Aug-12 Kenexa IBM 42 1260
Oct -12 OPNET Riverbed 31 912
June-13 ExactTarget Salesforce 50 2419
Jul -13 Sourcefire Cisco 29 2185
Dec-13 Responsys Oracle 38 1438
Sept-14 Concur SAP 28 7241
Nov-14 Sapient Publicis 70 3264
Feb-15 Freescale NXP 2 17469
Apr-15 Informatica PE consortium 11 4784
May-15 Altera Intel 18 14354
Oct-15 KLA-Tencor Lam Research 27 10955
Nov-15 King Digital Activision Blizzard 16 4881
Apr-16 Ruckus Wireless Brocade 45 1044
Apr-16 Cvent Vista Equity 68 1408
Jun-16 QLIK Technologies Thoma Bravo (PE) 5 2899
Jun-16 LinkedIn Microsoft 50 26401
Jun-16 Demandware Salesforce 56 2779
Jul-16 ARM Holdings SoftBank 43 22897
Jul-16 Netsuite Oracle 19 8716Sept -16 Arcam GE 53 688
Jan-17 AppDynamics Cisco 100 3700
Mar-17 Nimble Storage HP Enterprise 45 1000
Mar-17 Mobileye Intel 34 14131
Mar-18 MuleSoft Salesforcecom 36 5667June-18 GitHub Microsoft Private 7500
June-18 Adaptive Insights Workday Private 1550
Sept-18 Marketo Adobe Private 4750
Source 1 Centaur Partners December 2015 2 Bloomberg and Polar Capital August 2018 3 EampY June 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Valuations Supported By Elevated MampAhellip
Cash amp equivalents at top 25 tech companies3
Technology MampA since 19951
BOLD owned in Fund
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
4For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Slope of enlightenment
InnovationTrigger
Trough ofdisillusionment
Plateau ofproductivity
Volumetric Displays
Neuromorphic Hardware
Deep Learning
ConversationalUser Interface
IoT Platform
Augmented Data Discovery
Serverless PaaS
Smart Workforce
Quantum Computing
5G
Artificial GeneralIntelligence
Cognitive Computing
4D printing
Commercial UAVs (Drones)
Brain Computer Interface
Edge Computing
Smart Robots
Cognitive Expert Advisors
Enterprise Taxonomy and Ontology Management
Virtual Personal Assistants Machine Learning
Software Defined Security
Autonomous VehiclesNanotube Electronics
Connected Home
Blockchain
No growthuncertain declining OM
Thematic Investing Hype vs Reality
Source Polar Capital amp Gartner July 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Positioning of themesproducts above is only intended to be indicative of approximate penetrationmaturity
Maturity DeclineldquoBlue Skyrdquo Emerging Mainstream
RampDnegative OM
High growthexpanding OM
Low growthstable OM
Sale
s
Early stageinvestors Index ETF
Polar Capital Global Technology Team
ldquoValue TraprdquoDeveloped market smartphones
PNDGPS
LCD TV HDTV
Enterprise software
PVRDVR (Sky+)
Home Broadband
Notebooks
ERP Traditional software
Desktop PC printers
DVD
Feature phones 3G
VCR
Digital Camera (DSC)
Mainframe
IT Services
Electric vehicles
Internet of Things (IoT) M2M communication
Enterprise SSD 64 bit ARM architecture
Mobile social location based advertising
Clean energy (solar amp wind)
Wireless Networking (80211n ac)
Mobile broadband (4G LTE)
Software as a Service (SaaS)
Server amp Storage Virtualisation
Virtual Reality
EM smartphones amp EcommerceInternet
Tablets Ultrabooks (including Mac Air)
Smart agriculture factory automation robotics
Voice over LTE WiFI (VoLTE VoWiFI)
Cloud computing (publicprivate ndash PaaSIaaS)
Big data predictive analytics HadoopCyber security app control IPS
Software defined networking (SDN) NFV 100G optical FTTx)
Mobile payments mCommerce NFC biometrics
Moorersquos stress rising semi capital intensity
3D printing
eCommerce online advertising
Multiplayer mobile gaming streaming media
Expe
ctat
ions
Smart dust
Virtual Reality
TimeYears to mainstream adoption
Human Augmentation
Less than 2 years 2 to 5 years 5 to 10 years Obsolete before plateauMore than 10 years
Augmented Reality
Searching for revenue growth and cash flow inflections
Energy Storage
Deep ReinforcementLearning
Digital Twin
Peak ofInflated
expectation
5For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Technology PE Expansion In-line With Market
Source Ned Davis 12 October 2018 Copyright 2018 Ned Davis Research Inc Further distribution prohibited without prior permission All Rights Reserved See NDR Disclaimer at wwwndrcomcopyrighthtml For data vendor disclaimers refer to wwwndrcomvendorinfo Past performance is not indicative or a guarantee of future returns
Absolute sector valuation (PE)Compelling vs history (1992 ndash present)
Relative sector valuation (PE)At around market level ndash with superior balance sheet
6For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
Software as a Service (SaaS) valuationEVforward 12 month revenue multiples2
Internet valuation (equal cap weighted) EVforward 2 year EVEBITDA levels1
Source 1 Bloomberg 25 October 2018 UCITS Internet sector (AMZNFBGOOGBABA700HKPYPL) vs Bank of America Merrill Lynch Internet sector Index 2 KeyBanc Capital Markets 25 October 2018 Past performance is not indicative or a guarantee of future returns
0
5
10
15
20
25
Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Jul-16 Feb-17 Sep-17 Apr-18
ML Internet Index
7For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
IT security valuation EVforward 12 month revenue multiples1
Cloud vs legacy valuationEVtrailing 12 month revenue multiples2
Source 1 Citi Research FactSet 26 October 2018 2 Merill Lynch 26 October 2018 Past performance is not indicative or a guarantee of future returns
0x
2x
4x
6x
8x
10x
12x
14x
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Jan-
16M
ay-1
6Se
p-16
Jan-
17M
ay-1
7Se
p-17
Jan-
18M
ay-1
8Se
p-18
EV t
railin
g 12
mon
th s
ales
LEGACY CLOUD
8For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Select MampA activity2
Date Target Acquirer Premium Value $mMay-12 Ariba SAP 19 4324
Aug-12 Kenexa IBM 42 1260
Oct -12 OPNET Riverbed 31 912
June-13 ExactTarget Salesforce 50 2419
Jul -13 Sourcefire Cisco 29 2185
Dec-13 Responsys Oracle 38 1438
Sept-14 Concur SAP 28 7241
Nov-14 Sapient Publicis 70 3264
Feb-15 Freescale NXP 2 17469
Apr-15 Informatica PE consortium 11 4784
May-15 Altera Intel 18 14354
Oct-15 KLA-Tencor Lam Research 27 10955
Nov-15 King Digital Activision Blizzard 16 4881
Apr-16 Ruckus Wireless Brocade 45 1044
Apr-16 Cvent Vista Equity 68 1408
Jun-16 QLIK Technologies Thoma Bravo (PE) 5 2899
Jun-16 LinkedIn Microsoft 50 26401
Jun-16 Demandware Salesforce 56 2779
Jul-16 ARM Holdings SoftBank 43 22897
Jul-16 Netsuite Oracle 19 8716Sept -16 Arcam GE 53 688
Jan-17 AppDynamics Cisco 100 3700
Mar-17 Nimble Storage HP Enterprise 45 1000
Mar-17 Mobileye Intel 34 14131
Mar-18 MuleSoft Salesforcecom 36 5667June-18 GitHub Microsoft Private 7500
June-18 Adaptive Insights Workday Private 1550
Sept-18 Marketo Adobe Private 4750
Source 1 Centaur Partners December 2015 2 Bloomberg and Polar Capital August 2018 3 EampY June 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Valuations Supported By Elevated MampAhellip
Cash amp equivalents at top 25 tech companies3
Technology MampA since 19951
BOLD owned in Fund
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
5For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Technology PE Expansion In-line With Market
Source Ned Davis 12 October 2018 Copyright 2018 Ned Davis Research Inc Further distribution prohibited without prior permission All Rights Reserved See NDR Disclaimer at wwwndrcomcopyrighthtml For data vendor disclaimers refer to wwwndrcomvendorinfo Past performance is not indicative or a guarantee of future returns
Absolute sector valuation (PE)Compelling vs history (1992 ndash present)
Relative sector valuation (PE)At around market level ndash with superior balance sheet
6For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
Software as a Service (SaaS) valuationEVforward 12 month revenue multiples2
Internet valuation (equal cap weighted) EVforward 2 year EVEBITDA levels1
Source 1 Bloomberg 25 October 2018 UCITS Internet sector (AMZNFBGOOGBABA700HKPYPL) vs Bank of America Merrill Lynch Internet sector Index 2 KeyBanc Capital Markets 25 October 2018 Past performance is not indicative or a guarantee of future returns
0
5
10
15
20
25
Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Jul-16 Feb-17 Sep-17 Apr-18
ML Internet Index
7For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
IT security valuation EVforward 12 month revenue multiples1
Cloud vs legacy valuationEVtrailing 12 month revenue multiples2
Source 1 Citi Research FactSet 26 October 2018 2 Merill Lynch 26 October 2018 Past performance is not indicative or a guarantee of future returns
0x
2x
4x
6x
8x
10x
12x
14x
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Jan-
16M
ay-1
6Se
p-16
Jan-
17M
ay-1
7Se
p-17
Jan-
18M
ay-1
8Se
p-18
EV t
railin
g 12
mon
th s
ales
LEGACY CLOUD
8For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Select MampA activity2
Date Target Acquirer Premium Value $mMay-12 Ariba SAP 19 4324
Aug-12 Kenexa IBM 42 1260
Oct -12 OPNET Riverbed 31 912
June-13 ExactTarget Salesforce 50 2419
Jul -13 Sourcefire Cisco 29 2185
Dec-13 Responsys Oracle 38 1438
Sept-14 Concur SAP 28 7241
Nov-14 Sapient Publicis 70 3264
Feb-15 Freescale NXP 2 17469
Apr-15 Informatica PE consortium 11 4784
May-15 Altera Intel 18 14354
Oct-15 KLA-Tencor Lam Research 27 10955
Nov-15 King Digital Activision Blizzard 16 4881
Apr-16 Ruckus Wireless Brocade 45 1044
Apr-16 Cvent Vista Equity 68 1408
Jun-16 QLIK Technologies Thoma Bravo (PE) 5 2899
Jun-16 LinkedIn Microsoft 50 26401
Jun-16 Demandware Salesforce 56 2779
Jul-16 ARM Holdings SoftBank 43 22897
Jul-16 Netsuite Oracle 19 8716Sept -16 Arcam GE 53 688
Jan-17 AppDynamics Cisco 100 3700
Mar-17 Nimble Storage HP Enterprise 45 1000
Mar-17 Mobileye Intel 34 14131
Mar-18 MuleSoft Salesforcecom 36 5667June-18 GitHub Microsoft Private 7500
June-18 Adaptive Insights Workday Private 1550
Sept-18 Marketo Adobe Private 4750
Source 1 Centaur Partners December 2015 2 Bloomberg and Polar Capital August 2018 3 EampY June 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Valuations Supported By Elevated MampAhellip
Cash amp equivalents at top 25 tech companies3
Technology MampA since 19951
BOLD owned in Fund
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
6For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
Software as a Service (SaaS) valuationEVforward 12 month revenue multiples2
Internet valuation (equal cap weighted) EVforward 2 year EVEBITDA levels1
Source 1 Bloomberg 25 October 2018 UCITS Internet sector (AMZNFBGOOGBABA700HKPYPL) vs Bank of America Merrill Lynch Internet sector Index 2 KeyBanc Capital Markets 25 October 2018 Past performance is not indicative or a guarantee of future returns
0
5
10
15
20
25
Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Jul-16 Feb-17 Sep-17 Apr-18
ML Internet Index
7For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
IT security valuation EVforward 12 month revenue multiples1
Cloud vs legacy valuationEVtrailing 12 month revenue multiples2
Source 1 Citi Research FactSet 26 October 2018 2 Merill Lynch 26 October 2018 Past performance is not indicative or a guarantee of future returns
0x
2x
4x
6x
8x
10x
12x
14x
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Jan-
16M
ay-1
6Se
p-16
Jan-
17M
ay-1
7Se
p-17
Jan-
18M
ay-1
8Se
p-18
EV t
railin
g 12
mon
th s
ales
LEGACY CLOUD
8For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Select MampA activity2
Date Target Acquirer Premium Value $mMay-12 Ariba SAP 19 4324
Aug-12 Kenexa IBM 42 1260
Oct -12 OPNET Riverbed 31 912
June-13 ExactTarget Salesforce 50 2419
Jul -13 Sourcefire Cisco 29 2185
Dec-13 Responsys Oracle 38 1438
Sept-14 Concur SAP 28 7241
Nov-14 Sapient Publicis 70 3264
Feb-15 Freescale NXP 2 17469
Apr-15 Informatica PE consortium 11 4784
May-15 Altera Intel 18 14354
Oct-15 KLA-Tencor Lam Research 27 10955
Nov-15 King Digital Activision Blizzard 16 4881
Apr-16 Ruckus Wireless Brocade 45 1044
Apr-16 Cvent Vista Equity 68 1408
Jun-16 QLIK Technologies Thoma Bravo (PE) 5 2899
Jun-16 LinkedIn Microsoft 50 26401
Jun-16 Demandware Salesforce 56 2779
Jul-16 ARM Holdings SoftBank 43 22897
Jul-16 Netsuite Oracle 19 8716Sept -16 Arcam GE 53 688
Jan-17 AppDynamics Cisco 100 3700
Mar-17 Nimble Storage HP Enterprise 45 1000
Mar-17 Mobileye Intel 34 14131
Mar-18 MuleSoft Salesforcecom 36 5667June-18 GitHub Microsoft Private 7500
June-18 Adaptive Insights Workday Private 1550
Sept-18 Marketo Adobe Private 4750
Source 1 Centaur Partners December 2015 2 Bloomberg and Polar Capital August 2018 3 EampY June 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Valuations Supported By Elevated MampAhellip
Cash amp equivalents at top 25 tech companies3
Technology MampA since 19951
BOLD owned in Fund
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
7For non-US professional investor use only Please refer to the Important Information at the end of this presentation
lsquoNext-Generationrsquo Valuations
IT security valuation EVforward 12 month revenue multiples1
Cloud vs legacy valuationEVtrailing 12 month revenue multiples2
Source 1 Citi Research FactSet 26 October 2018 2 Merill Lynch 26 October 2018 Past performance is not indicative or a guarantee of future returns
0x
2x
4x
6x
8x
10x
12x
14x
Jan-
10M
ay-1
0Se
p-10
Jan-
11M
ay-1
1Se
p-11
Jan-
12M
ay-1
2Se
p-12
Jan-
13M
ay-1
3Se
p-13
Jan-
14M
ay-1
4Se
p-14
Jan-
15M
ay-1
5Se
p-15
Jan-
16M
ay-1
6Se
p-16
Jan-
17M
ay-1
7Se
p-17
Jan-
18M
ay-1
8Se
p-18
EV t
railin
g 12
mon
th s
ales
LEGACY CLOUD
8For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Select MampA activity2
Date Target Acquirer Premium Value $mMay-12 Ariba SAP 19 4324
Aug-12 Kenexa IBM 42 1260
Oct -12 OPNET Riverbed 31 912
June-13 ExactTarget Salesforce 50 2419
Jul -13 Sourcefire Cisco 29 2185
Dec-13 Responsys Oracle 38 1438
Sept-14 Concur SAP 28 7241
Nov-14 Sapient Publicis 70 3264
Feb-15 Freescale NXP 2 17469
Apr-15 Informatica PE consortium 11 4784
May-15 Altera Intel 18 14354
Oct-15 KLA-Tencor Lam Research 27 10955
Nov-15 King Digital Activision Blizzard 16 4881
Apr-16 Ruckus Wireless Brocade 45 1044
Apr-16 Cvent Vista Equity 68 1408
Jun-16 QLIK Technologies Thoma Bravo (PE) 5 2899
Jun-16 LinkedIn Microsoft 50 26401
Jun-16 Demandware Salesforce 56 2779
Jul-16 ARM Holdings SoftBank 43 22897
Jul-16 Netsuite Oracle 19 8716Sept -16 Arcam GE 53 688
Jan-17 AppDynamics Cisco 100 3700
Mar-17 Nimble Storage HP Enterprise 45 1000
Mar-17 Mobileye Intel 34 14131
Mar-18 MuleSoft Salesforcecom 36 5667June-18 GitHub Microsoft Private 7500
June-18 Adaptive Insights Workday Private 1550
Sept-18 Marketo Adobe Private 4750
Source 1 Centaur Partners December 2015 2 Bloomberg and Polar Capital August 2018 3 EampY June 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Valuations Supported By Elevated MampAhellip
Cash amp equivalents at top 25 tech companies3
Technology MampA since 19951
BOLD owned in Fund
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
8For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Select MampA activity2
Date Target Acquirer Premium Value $mMay-12 Ariba SAP 19 4324
Aug-12 Kenexa IBM 42 1260
Oct -12 OPNET Riverbed 31 912
June-13 ExactTarget Salesforce 50 2419
Jul -13 Sourcefire Cisco 29 2185
Dec-13 Responsys Oracle 38 1438
Sept-14 Concur SAP 28 7241
Nov-14 Sapient Publicis 70 3264
Feb-15 Freescale NXP 2 17469
Apr-15 Informatica PE consortium 11 4784
May-15 Altera Intel 18 14354
Oct-15 KLA-Tencor Lam Research 27 10955
Nov-15 King Digital Activision Blizzard 16 4881
Apr-16 Ruckus Wireless Brocade 45 1044
Apr-16 Cvent Vista Equity 68 1408
Jun-16 QLIK Technologies Thoma Bravo (PE) 5 2899
Jun-16 LinkedIn Microsoft 50 26401
Jun-16 Demandware Salesforce 56 2779
Jul-16 ARM Holdings SoftBank 43 22897
Jul-16 Netsuite Oracle 19 8716Sept -16 Arcam GE 53 688
Jan-17 AppDynamics Cisco 100 3700
Mar-17 Nimble Storage HP Enterprise 45 1000
Mar-17 Mobileye Intel 34 14131
Mar-18 MuleSoft Salesforcecom 36 5667June-18 GitHub Microsoft Private 7500
June-18 Adaptive Insights Workday Private 1550
Sept-18 Marketo Adobe Private 4750
Source 1 Centaur Partners December 2015 2 Bloomberg and Polar Capital August 2018 3 EampY June 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Valuations Supported By Elevated MampAhellip
Cash amp equivalents at top 25 tech companies3
Technology MampA since 19951
BOLD owned in Fund
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
9For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Gartner Q417 2 Factset Q118 3 httpssiliconanglecomblog20180228citing-acceleration-demand-salesforce-com-beats-earnings-estimates 4 BairdIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
hellipAnd Strengthening Fundamentals
SampP 500 Revenue Growth CY18E2
Worldwide IT spending (2016 ndash 2022E)1
ldquoIrsquove never seen a demand environmentlike this Every CEO is using the positiveeconomic environment as well as thedomestic tax cuts as a way to acceleratetheir digital transformationrdquo3
- Mark Benioff CEO Salesforcecom
ldquothe business imperative of responding to needs of a new generation of customers partners and suppliers who expect transactions to be seamless real-time Facebook-like in experience Amazon-like in reliabilityrdquo4
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
10For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Disruption
Source Polar Capital
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
11For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Centralised decentralised and distributed networks1
Source 1 RAND corporation lsquoWhere wizards stay up latersquorsquo Other sources Amazon httpswwwscrapeherocommany-products-amazon-sell-january-2018 httpswwwnasdaqcomarticleyoull-never-believe-amazons-share-of-the-e-commerce-market-cm904080 techcrunch Alibaba httpsseekingalphacomarticle4170052-alibaba-group-holding-limited-2018-q1-results-earnings-call-slides May 2018 Tencent August 2017Facebook httpszephoriacomtop-15-valuable-facebook-statistics Google August 2017 Bookingcom July 2017 Airbnb httpspressatairbnbcomfast-facts March 2018 Uber August 2017 The stocks representedherein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request
562m products 100m prime subs44 of 2017 US ecommerce
c5m listingsgt300m guest arrivals
gt5bn rides 78 countries
13m properties online15m room nightsday
gt2tr annual searches5 apps gt 1bn MAU
WeChat gt1bn MAU
22bn MAU 145bn DAU20+ minutesuserday
552m active users$768bn GMV in F18
Digital Disruption New Networks Scale
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
12For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Collapsing Computing Costs (1850 ndash 2010)1
Source 1 Aiimpactsorg (httpsaiimpactsorgtrends-in-the-cost-of-computing) 2 Gartner httpwwwgartnercomnewsroomid3784363 The stocks represented herein do not reflect the entire holdingscontained within the Fund All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
ldquoArtificial Intelligence technologies will be the most disruptive class of technologies over the next 10 years due to radical computational power near-endless amounts of data and unprecedented advances in
deep neural networks these will enable organizations with AI technologies to harness data in order to adapt to new situations and solve problems that no one has
ever encountered previouslyrdquo
- Gartner July 20172
Digital Disruption Artificial Intelligence (AI)
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
13For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB BI Intelligence 2 KPCB 3 Kornit Digital IR presentation The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Digital Disruption Retail
US Retail Store Closings 1995 ndash 2017 YTD1 Amazon Prime Subscriber Growth 2012 ndash 20171
ldquoI dont think retail is dead Mediocre retail experiences are deadrdquo
- Neil Blumenthal Co-CEO Warby Parker2
ldquoThis business is all about reducing response time In fashion stock is like food It goes bad quicklyrdquo
- Jose Maria Castellano former CEO Inditex Group3
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
14For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 Amazon market share as at August 2016 2 httpwwwbusinessinsidercomnew-breed-programmatic-first-ad-agencies-grabbing-business-ignored-by-traditional-firms-2018-4IR=T The stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Brands
Amazon Basics US online market share1
ldquoBig brands are being nibbled to deathrdquo2
ndash IAB CEO Randall Rothenberg
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
15For non-US professional investor use only Please refer to the Important Information at the end of this presentation
An extra large wet double-shot caramel macchiato(and WiFi)
Coffee
pound100 pound400
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
16For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 KPCB 2017 2 KPCB 2018 3 httpsexpandedramblingscomindexphpspotify-statisticsThe stocks represented herein do not reflect the entire holdings contained within the Fund It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Digital Disruption Content (Is Not King)
bull Number of TV channels watched lt10 of those received while Pay TV ARPU 10-15x gt Netflix1
bull Spotify = 180m active users 83m paid subscribers3 c20 of global music industry revenues1
US Recorded Music Revenues by Format (US$bn)1 Unique Artist Listening (2014 ndash 2017)2
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
17For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source 1 httpswwwpcgamesncomfortnitefortnite-vs-pubg-map-players-graphics-gameplay-weapons-reviewplayercount 2 wwwnmecomnewsfortnite-most-watched-game-youtube-history-2280172It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request
Digital Disruption Brands
bull Free-to-play lsquoshooterrsquo where you battle 99 other players solo teambull Released in July 2017 but became popular once a lsquoBattle Royalersquo
mode was introduced following the success of PC-basedPlayerUnknownrsquos Battlegrounds (PUBG)
bull More than just a lsquoCall of Duty for kidsrsquo ndash a new genre easy to playincluding random elements to the gameplay amusing emotes andskins (rather than pure skill lsquopay to playrsquo)
bull gt45m players and over 3m concurrent users1 and now the mostwatched game in YouTube history 24bn views in Feb 182
bull Monetisation via exclusive (time-sensitive) skins items and emotes
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
18For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Cyber Physical SecuritySecurity spending expected to reach $114bn in 2018E +124 yy5
Drivers include data breaches regulation digitalisation cyberwarfareBlock amp Protect Detection Mitigation amp Response
Digital Marketing AdvertisingInternet advertising worth $273bn in 20183 43 of total ad spending3
Alphabet and Facebook combined account for c90 of US market growth4
Brand Building Transaction facilitation
Eight Core Investment Themes
eCommerce Digital PaymentseCommerce worth $23tr in 2017 c10 of total retail sales2
Mobile commerce reached $14tr in 2017 gt60 of total2Number of SKU Payments Logistics + Ecosystem
Source 1 Gartner April 2018 2eMarketer January 2018 3 eMarketer March 2018 4 BoA ML Zenith US market Jan 18 5 Gartner August 2018 6 MS Geekwire July 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Cloud Infrastructure Artificial Intelligence (AI)Public Cloud market worth $186bn in 2018 (+21 yy growth)1
By 2021 44 of application workloads expected to run in Cloud services6
Under-utilisation cost arbitrage Elastic Compute TAM expansion
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
19For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Eight Core Investment Themes
Source 1 Newzoo April 2018 2 UBS Jan 2016 3 marketsandmarkets May 2018 4 httpwwwcultofmaccom305200foxconns-promised-iphone-building-robot-army-running-late 5 IDC 6 NewZoo May 2017 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Software SaaS ldquoReshaping The WorldrdquoUsage based pricing disrupting $150bn2 maintenance market
As penetration rises (~30 today5 ) expect more strategic MampA by incumbentsSMB adoption TAM expansion Enterprise lsquorip and replacersquo
Robotics Automation$381bn TAM by 2023 (c10 CAGR)3 enabled by advanced components (eg sensors gears)
Position repeatability 001mm (robots) 05mm (humans) VS 002mm (iPhone64) 01mm (cars)Cost savings Necessity Flexibility (lsquoCoBotrsquo) and Consistency
Rising Semiconductor ComplexityRising capital intensity due to end of lsquoMoorersquos Lawrsquo (transistor costs stop falling at 20nm)Greater focus on integration power consumption vs performance densityLithography Materials Improvement Process Innovation
Digital Content Games Software$122bn gaming market1 growing to $152bn by 2020E driven by mobile DLC MTX1
eSports 165m enthusiasts1 and a market worth $906m in 2018E +38 yy6
Leisure Connected Competitive
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
20For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Source Polar Capital 28 September 2018 Past performance is not indicative or a guarantee of future returns It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
Eight Core Investment Themes
Eight core theme breakdown (31 January 2017 ndash 28 September 2018)
0123456789
101112131415161718192021
Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
eCommerce Digital Payments Digital Marketing Advertising Cyber Physical Security
Cloud Infrastructure Artificial Intelligence Software SaaS Digital Content Games Software
Robotics Automation Semiconductor Material Science Applesmartphone related
Other Legacy Market hedge beta offset
Wei
ght
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 21
eCommerce Payments
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast January 2018 2 Techcrunch July 2018 3 eMarketer January 2018 4 EuromonitorBofAML 2018 It should not be assumed thatrecommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Allopinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull eCommerce growth continues unabated and reached $23tr in 2017 representing c10 of total retail sales1
bull Amazonrsquos share of US e-commerce now 49 c5 of all retail spend2
bull Mobile now an integral part of the shopping experience reaching $14tr in 2017 (c6 of total retail sales3)bull Improvements in payments delivery continue to reduce online buying friction change user behaviour and expectations
Global eCommerce Retail Sales ($bn) 2012 ndash 2020E4
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 22
bull Mobile remains the dominant trend in payments while merchant adoption represents the biggest obstaclebull Smartphone is replacing the physical wallet aided by the use of biometric authentication ndash Apple Pay etcbull Bank are being reduced to lsquodumb pipesrsquo as value moves to the networksbull Blockchain a longer-term opportunity enabling payment systems to operate in a decentralised framework
Source 1 Statista 2016 2 KPCB August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject tochange without notice and do not necessarily represent the views of Polar Capital
Global Mobile Payments (2010 ndash 2017E)1 China Mobile Payment Volume2
eCommerce Payments
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 23
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast March 2018 2 BoAMLZenith US market January 2018 3 KPCB 2018 It should not be assumed that recommendations made in futurewill be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitutethe best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $273bn in 2018 c 43 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 14 and 27 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook combined c 90 of overall growth in 20172
bull Growth drivers continued improvement in ROI measurement video content location-based marketing
US Daily Hours Spent with Digital Media per Adult User 2008 ndash 20173
Sample Holdings
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
24For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Digital Advertising Marketing
Source Polar Capital unless otherwise stated 1 Based on eMarketer forecast October 2016 2 Goldman SachsMagna Global January 2017 3 KPCB 2017 It should not be assumed that recommendations madein future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimatesconstitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Global online advertising expected to reach $195bn in 2016 c 20 of total advertising spend1
bull Paid Search and Social Media markets expected to grow 16 and 33 respectively in 20172
bull Size matters US market dominated by Alphabet and Facebook who combined captured c 75 of overall growth in 20162
bull Growth drivers continued improvement in ROI measurement video content live streaming location-based targeting
of Time Spent in Media vs of Advertising Spending USA 20163
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 25
Software As A Service (SaaS)
Source Polar Capital unless otherwise stated1 IDC 2 KeyBanc August 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull Rental usage-based model is expanding the software market while threatening incumbent franchises maintenancebull Software as a service (SaaS) targets a $164bn opportunity by 2022 c 30 penetrated today1
bull Recent acceleration in MampA supportive of our view that Cloud disruption is intensifyingbull Top Categories Communications (UCaaS) SalesMarketing Analytics Education Procurement VerticalHorizontal amp SMB
Worldwide SaaS and Cloud Software (2012 ndash 2017E)2
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 26
Digital amp Online Gamingbull Video games $122bn market in 2017 rarr $152bn by 2020E (~10 CAGR) driven by new console cycle mobile and ARVR1
bull Improving market dynamics industry consolidation = greater scale profitability barriers to entry
bull The shift to digital distribution (full game digital downloads additional content) improves margins and expands the TAMbull Meteoric rise of lsquoBattle Royalersquo games PUBG and Fortnite (gt40m MAUs2 $296m sales3) = risk and opportunity
Global Games Market ($bn) 2017 ndash 2020E1
Source 1 Newzoo Apr 2018 2 Tencent May 2018 3 Superdata (April data) May 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities inthis document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereofbut are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 27
Cyber amp Physical Securitybull Security remains one of the more attractive areas within traditional IT budgets expected to grow c 12 to $114bn in 2018E1
bull Favourable backdrop likely to persist ndash regulation (GDPR Federal Action Plan) digitalisation cyberwarfare IoT BYODbull Priorities shifting from lsquoblock and protectrsquo to rapid detection and response (c 60 of budgets by 2020)2
bull Preferred areas email security privileged account management (PAM) vulnerability management (VM) and SIEM
US cyber security spending 2009 ndash 20173
Source 1 Gartner August 2018 2 Gartner January 2016 3 atlanticcouncilorg 2015 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 28
Cloud Provider Market Share Q2rsquo18)6
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Amazon Web Services ($m) Q2rsquo14 ndash Q1rsquo185
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Geekwire 6 Synergy Research Itshould not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 monthsis available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of PolarCapital
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 29
bull Having debunked many of the earlier barriers to adoption we expect Cloud migration to accelerate over the coming yearsbull Computing storage costs headed lower Amazon Web Services (AWS) has lowered prices 61 times since launch1
bull Expect lsquoallrsquo incremental capacity added in cloud c 50 of spend by 20192 and 44 of application workloads by 20213
bull Cloud deflation likely to be felt throughout the IT stack while pressuring pricing volume in the $866bn IT services BPO market4
Enterprise Computing Workloads 2016 ndash 2024E5
Cloud Infrastructure
Source Polar Capital unless otherwise stated 1 Amazon May 2017 2 Deutsche Bank January 2016 3 Morgan Stanley Geekwire August 2018 4 BNP Gartner July 2016 5 Gartner August 2016 It should not beassumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is availableupon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
Sample Holdings
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
30For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Rob Lineback IC Insights It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Wor
ldw
ide
spen
ding
on
robo
ts (U
SD b
illion
s)
Sensor prices (1992 ndash 2014)3
Sample Holdings
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
31For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Robotics Automation
Source 1 Boston Consulting Group September 2015 2 marketsandmarkets February 2016 3 Recode ABI Research It should not be assumed that recommendations made in future will be profitable or will equalperformance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of PolarCapital as of the date hereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull The Fourth Industrial Revolution underway driven by Cyber Physical Systems Internet of Things and Cloud Services bull Over 25 of manufacturing tasks that can be automated may be performed by robots over the next decade1
bull Human-robot collaboration will radically alter the way factories operate making highly versatile production lines possible bull $80bn TAM by 2022 (c12 CAGR)2 - we prefer high precision components sensors over robotic manufacturers
Global shipments of industrial robots (2016-205E)3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 32
lsquoMore Than Moorersquo ndash Rising Semiconductor Complexity
Source 1 Computer Architecture by John Hennessy and David Patterson FT It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the datehereof but are subject to change without notice and do not necessarily represent the views of Polar Capital
bull Cost reductions tied to shrinkage stops lt20nm diluting benefits of migration to finer nodes Opportunity for lsquofast followersrsquo
bull Increasing complexity drives up capital intensity on a per wafer basis benefiting semiconductor equipment (SPE) vendors
bull Greater focus on compound materials advance packaging and IC design to deliver future performance cost improvement
bull Growth segments 1) Solid State Drive (SSD) 2) Public Cloud 2) Artificial Intelligence 3) Automotive (85 CAGR to $50bn in 2020)1
Cost ($m per 1000 300mm wafer month) by node1 Transistor density growth (1978 ndash Present)1
Sample Holdings
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
33For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Smartphones Apple
Source 1 httpswwwzenithmediacomsmartphone-penetration-reach-66-2018 2 httpswwwgartnercomnewsroomid3859963 3 httpswwwrecodenet201812316923832global-smartphone-prices-grew-faster-iphone-quarter 4 httpswwwcnbccom20180223smartphone-sales-are-slowing-and-here-are-two-key-reasons-whyhtml 5 httpswwwpcworldcomarticle3078010hardwarethe-pc-upgrade-cycle-slows-to-every-five-to-six-years-intels-ceo-sayshtml) 6 Statista It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but aresubject to change without notice and do not necessarily represent the views of Polar Capital
bull The smartphone market is now mature global penetration at c661 and unit growth of just +27 in 2017 and -56 yy in Q417 2
bull The lsquounitrsquo super-cyclersquo has given way to a lsquovaluersquo one driven by average selling prices which increased 6 in 20173
bull Replacement cycles are extending 24 years (2016) 26 years in 20174 The PC experience is sobering (5-6 years today)5
bull Apple remains a unique story mass affluent customer base premium pricing and a walled-garden services business
Smartphone unit shipments (2007 - 2017)6
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
34For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Emerging Themes
Source Gartner August 2018
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 35
Voice As The Computing Interface
Source 1 Baidu KPCB 2016 2 KPCB 2016 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
bull Humans speak 150 vs type 40 words per minute on averagebull Recognition accuracy shift from 95 to 99 will drive
ubiquity of voice as an interface for a variety of appsbull By 2020 c50 of all searches via images or speech1
Words recognised by machine 1970 - 20162
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 36
bull Automotive market ripe for reinvention connectivity infotainment advanced driver assistance systems (ADAS) autonomous driving vehicle electrification
bull 125m deaths worldwide due to vehicle crashes in 2014 while 94 of US accidents involve human choice error1
bull Global ADAS autonomous vehicle penetration forecast to grow from 12 in 2015 to 48 in 2020 and 70 by 20252
bull Fully autonomous driving by 2020 Technically yes ndash Waymo cars have already completed 5m miles3
bull Car ownership Depreciating underutilised asset used just c 4 of the time shared private rides becoming mainstream4
Source 1 httpswaymocomtech 2 KPCB 2016 3 httpswaymocomtech 4 Baidu KPCB 2016 5 wwwautonewscom Chart from httpswaymocomtech It should not be assumed that recommendationsmade in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request Forecasts containedherein are for illustrative purposes only and does not constitute advice or a recommendation All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to changewithout notice and do not necessarily represent the views of Polar Capital
Electric Autonomous Vehicles
ldquoWe are approaching the end of the automotive era The tipping point will
come when 20-30 of vehicles are fully autonomous Countries will look
at the accident statistics and figure out that human drivers are causing
999 of the accidentsrdquo5
ndash Bob Lutz former vice Chairman GM
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 37
Augmented Virtual Reality (AR VR)
bull Nascent today but massive LT opportunity (gt$100bn by 20251)bull Technology driven by smartphone display sensor advancesbull Gaming primary market today but additional applications include live
events (sports concerts) patient monitoring real estate and education
bull Early stage of hardware penetration currently constraining ARVR
bull Pokemon Go success (gt65m MAUs April 20172) shows AR potentialbull Current market leaders Facebook Sony HTC Samsung and Google
Source 1 Goldman Sachs May 2018 2 Niantic April 2017 3 IDCTobii June 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12 months is available upon request
AR VR Headset Market Share by Form Factor 2018 2022E3
Sample Holdings
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
For non-US professional investor use only Please refer to the Important Information at the end of this presentation 38
eSports
bull eSports = Competitive gaming as a spectator sportbull Rapidly growing TAM $906m in 2018E +38 yy2
bull Social media has grown eSports viewership making professional leagues with full time players teams possiblendash 165m enthusiasts and a further 215m occasional viewers expected in 20181
ndash 42 of eSports viewers do not play the games themselves2
ndash Twitch reaches 55 of US millennial males3
ndash gt10m people watched Overwatch Leaguersquos opening weekend4
bull Sales opportunities broadcast rights franchise sales advertising sponsorship tickets and merchandisendash Overwatch franchises $20m each Twitch paid $90m for 2yr broadcast rights5
Source 1 Newzoo February 2018 2 Newzoo May 2017 3 comScore September 2017 4 httpsblizzardwatchcom2018011710-million-viewers-watched-overwatch-leagues-opening-week 5 wwwsporttechiecomJuly 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding12 months is available upon request Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation
Sample Holdings
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
39For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Total number of holdings 113
Top 15 holdingsAlphabet 91Microsoft 89Apple 80Facebook 37Amazon 28Tencent 25Alibaba Group Holding 24TSMC 24NVIDIA 19Samsung Electronics 19Salesforcecom 18Adobe Systems 16ServiceNow 14Xilinx 14Texas Instruments 14
Large Cap (gt$10bn)
Mid Cap (gt$1bn - $10bn)
Small Cap (lt$1bn)
774
214
12
Market cap exposure ()
PCT PositioningSector exposure ()
Source Polar Capital 28 September 2018 It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendationsmade within the immediately preceding 12 months is available upon request Totals may not sum due to rounding
Software 255Interactive Media amp Services 164Semiconductors amp Semiconductor Equipment 152Technology Hardware Storage amp Peripherals 109Internet amp Direct Marketing Retail 74Electronic Equipment Instruments amp Components 45IT Services 44Entertainment 36Communications Equipment 15Machinery 08Other 23Cash 74
0
10
20
30
40
50
60
70
80
US ampCanada
Asia Pac(ex-Japan)
Europe (exUK)
Japan UK Middle Eastamp Africa
LatinAmerica
Cash
708
114
46 45 10 01
Geographic exposure ()
0174
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
40For non-US professional investor use only Please refer to the Important Information at the end of this presentation
05
114
-118
-20 -15 -10 -5 0 5 10 15
Small-cap
Mid-cap
Large-cap
PCT Positioning
Source Polar Capital as at 28 September 2018 Bold denotes a zero position It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
Largest overweights Largest underweights Market cap exposure versus benchmark8x8Activision BlizzardAdvanced Micro DevicesAlteryxAmazonAxon EnterpriseCognex CorpDolby Laboratories IncDropboxIACInterActiveCorpIntuitive SurgicalPayPal HoldingsPegasystemsPure StorageServiceNowTwilioUBISOFT EntertainmentVisaXilinxZendesk
Amadeus IT HoldingAnalog DevicesAppleApplied MaterialsBaiduBroadcomCanon IncCisco SystemsCognizant Technology SolutionsFacebookHPIBMInfosysIntelIntuitMicrosoftOracleQualcommSamsung ElectronicsSAP
41For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Internet24
Cloud applications15
Cloud infrastructure6
Cybersecurity2Big data AI
2Automotive
2
Factory automationrobotics3
Payments4
IoT1
3D Printing0
Other0
Emerging0
Solar0
Electric Vehicles0
Medical Technology1
Apple9
Smartphones1
Semiconductors18
Legacy11
PCT PositioningThematic breakdown12 Thematic breakdown relative to benchmark ()12
Source Polar Capital 28 September 2018 1 Benchmark Dow Jones World Technology Index (TR) 2 Index exposure based on Top 100 index constituents Figures are shown as gross weightingsIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12months is available upon request
-200
-150
-100
-50
00
50
100
Clo
ud a
pplic
atio
ns
Clo
ud i
nfra
stru
ctur
e
Paym
ents
Vide
o G
ames
Fact
ory
auto
mat
ion
robo
tics
Smar
tpho
nes
Big
data
AI
Cyb
erse
curit
y
Auto
mot
ive
IoT
Mat
eria
ls
Med
ical
Tec
hnol
ogy
Elec
tric
Vehi
cles
Emer
ging
3D P
rintin
g
Sola
r
Oth
er
Inte
rnet
Sem
icon
duct
ors
Appl
e
Lega
cy
42For non-US professional investor use only Please refer to the Important Information at the end of this presentation
PCT1 Index Top 100
Index ex Apple
PE (Median) CY 266 176 176NY 235 159 160
Earnings growth (Median) CY 228 194 192NY 134 105 104
EVSales (Mean) CY 62 46 46NY 50 40 41
EVSales (Median) CY 56 40 40NY 49 35 36
EVSales (Weighted) CY 60 49 52NY 51 44 46
Sales Growth (Mean) CY 226 148 148NY 187 94 94
Sales Growth (Median) CY 200 116 114NY 151 73 73
Sales Growth (Weighted) CY 220 168 176NY 166 111 121
Gross Margin (Mean) 614 584 587Gross Margin (Median) 648 604 607Gross Margin (Weighted) 580 570 603Net Cash as mkt cap Avg 87 07 06
Wgtd 89 74 65Market Cap ($m) Mean 67603 73343 63545
Median 7325 20499 20127
Wgtd 331403 421925 312270
PCT Positioning
Sales growth 2019 ndash PCT vs benchmark2
Source 1 Polar Capital 29 October 2018 Figures in blue exclude Apple (15 gross) from the Index Top 100 CY = Current Year NY = 2018 calendar year estimates 2 Polar Capital 28 September 2018 BenchmarkDow Jones World Technology Index (TR) Past performance is not indicative or a guarantee of future results All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subjectto change without notice and do not necessarily represent the views of Polar Capital It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
o
f Por
tfolio
00
100
200
300
400
500
600
lt0 010 1020 2030 3040 4050 gt50
PCT GROSS WEIGHT BENCH GROSS WEIGHT
43For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Appendix
44For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team BiographiesBen Rogoff Director ndash TechnologyExperience 23 yearsBen joined Polar Capital in May 2003 He is lead manager of Polar Capital Technology Trust plc and is a Fund Manager of thePolar Capital Global Technology Fund and Polar Capital Automation and Artificial Intelligence Fund He has been atechnology specialist for 23 years Prior to joining Polar Capital he began his career in fund management at CMI as a globaltechnology analyst He moved to Aberdeen Fund Managers in 1998 where he spent four years as a senior technologymanager Ben graduated from St Catherinersquos College Oxford in 1995
Nick Evans Senior Fund ManagerExperience 20 yearsNick joined Polar Capital in September 2007 and has 20 yearsrsquo experience as a technology specialist He has been leadmanager of the Polar Capital Global Technology Fund since January 2008 and is also a fund manager on the Polar CapitalTechnology Trust and Polar Capital Automation and Artificial Intelligence Fund Prior to joining Polar he was head oftechnology at AXA Framlington and lead manager of the AXA Framlington Global Technology Fund and the AXA world fund(AWF) ndash Global Technology from 2001 to 2007 (both rated five stars by SampP) He also spent three years as a Pan-Europeaninvestment manager and technology analyst at Hill Samuel Asset Management Nick has a degree in Economics andBusiness Economics from Hull University has completed all levels of the ASIP and is a member of the CFA Institute
Fatima IuExperience 12 yearsFatima joined Polar Capital in April 2006 and has 12 yearsrsquo experience She is a fund manager on the Polar CapitalTechnology Fund Polar Capital Technology Trust and Polar Capital Automation and Artificial Intelligence Fund She isresponsible for the coverage of European Technology Global Security Networking Clean Energy and Medical TechnologyPrior to joining Polar Fatima spent 18 months working at Citigroup Asset Management with a focus on consumer productsand pharmaceuticals Fatima holds an MSc in Medicinal Chemistry from Imperial College of Science amp Technology in LondonShe is also a CFA Charterholder
45For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team Biographies contXuesong ZhaoExperience 11 yearsXuesong joined Polar Capital in May 2012 and has 11 yearsrsquo investment experience He is a lead manager of the Polar Capital Automationand Artificial Intelligence Fund and is a Fund Manager on the Polar Capital Technology Trust and Polar Capital Global Technology FundPrior to joining Polar Capital he spent four years working as an investment analyst within the emerging markets amp Asia team at AvivaInvestors where he was responsible for the technology media and telecom sectors Prior to that he worked as a quantitative analyst andrisk manager for the emerging market debt team at Pictet Asset Management He started his career as a financial engineer at Algorithmicsnow owned by IBM in 2005 He holds an MSc in Finance from Imperial College of Science amp Technology a BA (Hons) in Economics fromPeking University and has passed all three levels of the CFA
Brad ReynoldsExperience 11 yearsBrad joined Polar Capital in October 2011 as an Investment Analyst and Trader working as part of the European Market Neutral team witha focus on media and internet In 2014 he joined the Technology team as an Investment Analyst Prior to joining Polar Capital Bradworked at Ratio Asset Management as an analyst and trader and from 2007 to 2011 he worked at FampC as a hedge fund analyst Bradstarted his career in 2001 at Gartmore Investment Management working within the hedge fund team Brad graduated from the University ofHertfordshire with a degree in Business Studies
Paul JohnsonExperience 6 yearsPaul joined Polar Capital in March 2012 as an Investment Analyst on the Polar Capital Technology team Prior to joining Polar CapitalPaul helped manage a private investment fund between 2010 and 2012 Paul holds a BA in History and Politics and a Masters in Historyfrom Keele University He has successfully passed all three levels of the CFA program
Chris WittstockExperience 34 yearsChris joined Polar Capital in July 2017 as a senior technology analyst based in the US Prior to joining Chris led the International researchsales effort at Pacific Crest a technology investment bank that was ultimately acquired by KeyBanc Capital in 2014 Prior to joining PacificCrest in 2004 Chris led the International sales effort at Schwab SoundView the successor company to Soundview Technology Groupwhere he was since 1996 Chris spent significant time in Europe as a derivative products specialist in the late 80s and 90s lastly withMorgan Stanley International He is a graduate of University of Toronto Faculty of Engineering (Industrial)
46For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Important Information This document is provided for the sole use of the intended recipient and is not a financial promotion It shall not and does not constitute an offer or solicitation of an offer to make aninvestment into any fund or Company managed by Polar Capital It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only Clients who haveaccess to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Companyrsquos Prospectus or latest financial report The law restricts distributionof this document in certain jurisdictions therefore it is the responsibility of the reader to inform themselves about and observe any such restrictions It is the responsibility of any persons in possession of thisdocument to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction Polar Capital Technology Trust plc is an Investment Company with investment trust status and assuch its ordinary shares are excluded from the FCArsquos (Financial Conduct Authorityrsquos) restrictions which apply to non-mainstream investment products The Company conducts its affairs and intends to continue todo so for the foreseeable future so that the exclusion continues to apply It is not designed to contain information material to an investorrsquos decision to invest in Polar Capital PLC ndash Global Technology Fund orPolar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 201161EU (ldquoAIFMDrdquo) managed by Polar Capital LLP the appointedAlternative Investment Manager In relation to each member state of the EEA (each a ldquoMember Staterdquo) which has implemented the AIFMD this document may only be distributed and shares may only be offeredor placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD or (2) this document may otherwise belawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor) As at the date of this document the Fund has not been approvednotified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA However such approval may be sought or such notification or registration may bemade in the future Therefore this document is only transmitted to an investor in an EEA Member State at such investorrsquos own initiative SUCH INFORMATION INCLUDING RELEVANT RISKFACTORS IS CONTAINED IN THE COMPANY OR FUNDrsquoS OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR
StatementsOpinionsViews All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the viewsof Polar Capital This material does not constitute legal or accounting advice readers should contact their legal and accounting professionals for such information All sources are Polar Capital unless otherwisestated
Third-party Data Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital Neither Polar Capital nor any other party involved in orrelated to compiling computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof) and all such partieshereby expressly disclaim all warranties of originality accuracy completeness merchantability or fitness for a particular purpose with respect to any data contained herein
Holdings Portfolio data is ldquoas atrdquo the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or Fund The holdings may represent only asmall percentage of the aggregate portfolio holdings are subject to change without notice and may not represent current or future portfolio composition Information on particular holdings may be withheld if it is inthe Company or Fundrsquos best interest to do so It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request This document is not a recommendation to purchase or sell any particular security It is designed to provideupdated information to professional investors to enable them to monitor the Company or Fund
Benchmarks The following benchmark index is used Dow Jones World Technology Index (Total Return) This benchmark is generally considered to be representative of the Technology Equity universe Thisbenchmark is a broad-based index which is used for comparativeillustrative purposes only and has been selected as it is well known and is easily recognizable by investors Please refer to wwwdjindexescomfor further information on this index Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund Security holdings industryweightings and asset allocation made for the Company or Fund may differ significantly from the benchmark Accordingly investment results and volatility of the Company or Fund may differ from those of thebenchmark The indices noted in this document are unmanaged are unavailable for direct investment and are not subject to management fees transaction costs or other types of expenses that the Company orFund may incur The performance of the indices reflects reinvestment of dividends and where applicable capital gain distributions Therefore investors should carefully consider these limitations and differenceswhen evaluating the comparative benchmark data performance Information regarding indices is included merely to show general trends in the periods indicated it is not intended to imply that the fund was similarto the indices in composition or risk
Polar Capital16 Palace Street
London SW1E 5JD
Important Information
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
| Series 1 | |||
| Small-cap | 05 | ||
| Mid-cap | 114 | ||
| Large-cap | -118 | ||
| To resize chart data range drag lower right corner of range |
| Small-cap | |
| Mid-cap | |
| Large-cap |
41For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Internet24
Cloud applications15
Cloud infrastructure6
Cybersecurity2Big data AI
2Automotive
2
Factory automationrobotics3
Payments4
IoT1
3D Printing0
Other0
Emerging0
Solar0
Electric Vehicles0
Medical Technology1
Apple9
Smartphones1
Semiconductors18
Legacy11
PCT PositioningThematic breakdown12 Thematic breakdown relative to benchmark ()12
Source Polar Capital 28 September 2018 1 Benchmark Dow Jones World Technology Index (TR) 2 Index exposure based on Top 100 index constituents Figures are shown as gross weightingsIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12months is available upon request
-200
-150
-100
-50
00
50
100
Clo
ud a
pplic
atio
ns
Clo
ud i
nfra
stru
ctur
e
Paym
ents
Vide
o G
ames
Fact
ory
auto
mat
ion
robo
tics
Smar
tpho
nes
Big
data
AI
Cyb
erse
curit
y
Auto
mot
ive
IoT
Mat
eria
ls
Med
ical
Tec
hnol
ogy
Elec
tric
Vehi
cles
Emer
ging
3D P
rintin
g
Sola
r
Oth
er
Inte
rnet
Sem
icon
duct
ors
Appl
e
Lega
cy
42For non-US professional investor use only Please refer to the Important Information at the end of this presentation
PCT1 Index Top 100
Index ex Apple
PE (Median) CY 266 176 176NY 235 159 160
Earnings growth (Median) CY 228 194 192NY 134 105 104
EVSales (Mean) CY 62 46 46NY 50 40 41
EVSales (Median) CY 56 40 40NY 49 35 36
EVSales (Weighted) CY 60 49 52NY 51 44 46
Sales Growth (Mean) CY 226 148 148NY 187 94 94
Sales Growth (Median) CY 200 116 114NY 151 73 73
Sales Growth (Weighted) CY 220 168 176NY 166 111 121
Gross Margin (Mean) 614 584 587Gross Margin (Median) 648 604 607Gross Margin (Weighted) 580 570 603Net Cash as mkt cap Avg 87 07 06
Wgtd 89 74 65Market Cap ($m) Mean 67603 73343 63545
Median 7325 20499 20127
Wgtd 331403 421925 312270
PCT Positioning
Sales growth 2019 ndash PCT vs benchmark2
Source 1 Polar Capital 29 October 2018 Figures in blue exclude Apple (15 gross) from the Index Top 100 CY = Current Year NY = 2018 calendar year estimates 2 Polar Capital 28 September 2018 BenchmarkDow Jones World Technology Index (TR) Past performance is not indicative or a guarantee of future results All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subjectto change without notice and do not necessarily represent the views of Polar Capital It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
o
f Por
tfolio
00
100
200
300
400
500
600
lt0 010 1020 2030 3040 4050 gt50
PCT GROSS WEIGHT BENCH GROSS WEIGHT
43For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Appendix
44For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team BiographiesBen Rogoff Director ndash TechnologyExperience 23 yearsBen joined Polar Capital in May 2003 He is lead manager of Polar Capital Technology Trust plc and is a Fund Manager of thePolar Capital Global Technology Fund and Polar Capital Automation and Artificial Intelligence Fund He has been atechnology specialist for 23 years Prior to joining Polar Capital he began his career in fund management at CMI as a globaltechnology analyst He moved to Aberdeen Fund Managers in 1998 where he spent four years as a senior technologymanager Ben graduated from St Catherinersquos College Oxford in 1995
Nick Evans Senior Fund ManagerExperience 20 yearsNick joined Polar Capital in September 2007 and has 20 yearsrsquo experience as a technology specialist He has been leadmanager of the Polar Capital Global Technology Fund since January 2008 and is also a fund manager on the Polar CapitalTechnology Trust and Polar Capital Automation and Artificial Intelligence Fund Prior to joining Polar he was head oftechnology at AXA Framlington and lead manager of the AXA Framlington Global Technology Fund and the AXA world fund(AWF) ndash Global Technology from 2001 to 2007 (both rated five stars by SampP) He also spent three years as a Pan-Europeaninvestment manager and technology analyst at Hill Samuel Asset Management Nick has a degree in Economics andBusiness Economics from Hull University has completed all levels of the ASIP and is a member of the CFA Institute
Fatima IuExperience 12 yearsFatima joined Polar Capital in April 2006 and has 12 yearsrsquo experience She is a fund manager on the Polar CapitalTechnology Fund Polar Capital Technology Trust and Polar Capital Automation and Artificial Intelligence Fund She isresponsible for the coverage of European Technology Global Security Networking Clean Energy and Medical TechnologyPrior to joining Polar Fatima spent 18 months working at Citigroup Asset Management with a focus on consumer productsand pharmaceuticals Fatima holds an MSc in Medicinal Chemistry from Imperial College of Science amp Technology in LondonShe is also a CFA Charterholder
45For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team Biographies contXuesong ZhaoExperience 11 yearsXuesong joined Polar Capital in May 2012 and has 11 yearsrsquo investment experience He is a lead manager of the Polar Capital Automationand Artificial Intelligence Fund and is a Fund Manager on the Polar Capital Technology Trust and Polar Capital Global Technology FundPrior to joining Polar Capital he spent four years working as an investment analyst within the emerging markets amp Asia team at AvivaInvestors where he was responsible for the technology media and telecom sectors Prior to that he worked as a quantitative analyst andrisk manager for the emerging market debt team at Pictet Asset Management He started his career as a financial engineer at Algorithmicsnow owned by IBM in 2005 He holds an MSc in Finance from Imperial College of Science amp Technology a BA (Hons) in Economics fromPeking University and has passed all three levels of the CFA
Brad ReynoldsExperience 11 yearsBrad joined Polar Capital in October 2011 as an Investment Analyst and Trader working as part of the European Market Neutral team witha focus on media and internet In 2014 he joined the Technology team as an Investment Analyst Prior to joining Polar Capital Bradworked at Ratio Asset Management as an analyst and trader and from 2007 to 2011 he worked at FampC as a hedge fund analyst Bradstarted his career in 2001 at Gartmore Investment Management working within the hedge fund team Brad graduated from the University ofHertfordshire with a degree in Business Studies
Paul JohnsonExperience 6 yearsPaul joined Polar Capital in March 2012 as an Investment Analyst on the Polar Capital Technology team Prior to joining Polar CapitalPaul helped manage a private investment fund between 2010 and 2012 Paul holds a BA in History and Politics and a Masters in Historyfrom Keele University He has successfully passed all three levels of the CFA program
Chris WittstockExperience 34 yearsChris joined Polar Capital in July 2017 as a senior technology analyst based in the US Prior to joining Chris led the International researchsales effort at Pacific Crest a technology investment bank that was ultimately acquired by KeyBanc Capital in 2014 Prior to joining PacificCrest in 2004 Chris led the International sales effort at Schwab SoundView the successor company to Soundview Technology Groupwhere he was since 1996 Chris spent significant time in Europe as a derivative products specialist in the late 80s and 90s lastly withMorgan Stanley International He is a graduate of University of Toronto Faculty of Engineering (Industrial)
46For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Important Information This document is provided for the sole use of the intended recipient and is not a financial promotion It shall not and does not constitute an offer or solicitation of an offer to make aninvestment into any fund or Company managed by Polar Capital It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only Clients who haveaccess to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Companyrsquos Prospectus or latest financial report The law restricts distributionof this document in certain jurisdictions therefore it is the responsibility of the reader to inform themselves about and observe any such restrictions It is the responsibility of any persons in possession of thisdocument to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction Polar Capital Technology Trust plc is an Investment Company with investment trust status and assuch its ordinary shares are excluded from the FCArsquos (Financial Conduct Authorityrsquos) restrictions which apply to non-mainstream investment products The Company conducts its affairs and intends to continue todo so for the foreseeable future so that the exclusion continues to apply It is not designed to contain information material to an investorrsquos decision to invest in Polar Capital PLC ndash Global Technology Fund orPolar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 201161EU (ldquoAIFMDrdquo) managed by Polar Capital LLP the appointedAlternative Investment Manager In relation to each member state of the EEA (each a ldquoMember Staterdquo) which has implemented the AIFMD this document may only be distributed and shares may only be offeredor placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD or (2) this document may otherwise belawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor) As at the date of this document the Fund has not been approvednotified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA However such approval may be sought or such notification or registration may bemade in the future Therefore this document is only transmitted to an investor in an EEA Member State at such investorrsquos own initiative SUCH INFORMATION INCLUDING RELEVANT RISKFACTORS IS CONTAINED IN THE COMPANY OR FUNDrsquoS OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR
StatementsOpinionsViews All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the viewsof Polar Capital This material does not constitute legal or accounting advice readers should contact their legal and accounting professionals for such information All sources are Polar Capital unless otherwisestated
Third-party Data Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital Neither Polar Capital nor any other party involved in orrelated to compiling computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof) and all such partieshereby expressly disclaim all warranties of originality accuracy completeness merchantability or fitness for a particular purpose with respect to any data contained herein
Holdings Portfolio data is ldquoas atrdquo the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or Fund The holdings may represent only asmall percentage of the aggregate portfolio holdings are subject to change without notice and may not represent current or future portfolio composition Information on particular holdings may be withheld if it is inthe Company or Fundrsquos best interest to do so It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request This document is not a recommendation to purchase or sell any particular security It is designed to provideupdated information to professional investors to enable them to monitor the Company or Fund
Benchmarks The following benchmark index is used Dow Jones World Technology Index (Total Return) This benchmark is generally considered to be representative of the Technology Equity universe Thisbenchmark is a broad-based index which is used for comparativeillustrative purposes only and has been selected as it is well known and is easily recognizable by investors Please refer to wwwdjindexescomfor further information on this index Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund Security holdings industryweightings and asset allocation made for the Company or Fund may differ significantly from the benchmark Accordingly investment results and volatility of the Company or Fund may differ from those of thebenchmark The indices noted in this document are unmanaged are unavailable for direct investment and are not subject to management fees transaction costs or other types of expenses that the Company orFund may incur The performance of the indices reflects reinvestment of dividends and where applicable capital gain distributions Therefore investors should carefully consider these limitations and differenceswhen evaluating the comparative benchmark data performance Information regarding indices is included merely to show general trends in the periods indicated it is not intended to imply that the fund was similarto the indices in composition or risk
Polar Capital16 Palace Street
London SW1E 5JD
Important Information
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
| Series 1 | |||
| Small-cap | 05 | ||
| Mid-cap | 114 | ||
| Large-cap | -118 | ||
| To resize chart data range drag lower right corner of range |
41For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Internet24
Cloud applications15
Cloud infrastructure6
Cybersecurity2Big data AI
2Automotive
2
Factory automationrobotics3
Payments4
IoT1
3D Printing0
Other0
Emerging0
Solar0
Electric Vehicles0
Medical Technology1
Apple9
Smartphones1
Semiconductors18
Legacy11
PCT PositioningThematic breakdown12 Thematic breakdown relative to benchmark ()12
Source Polar Capital 28 September 2018 1 Benchmark Dow Jones World Technology Index (TR) 2 Index exposure based on Top 100 index constituents Figures are shown as gross weightingsIt should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of all recommendations made within the immediately preceding 12months is available upon request
-200
-150
-100
-50
00
50
100
Clo
ud a
pplic
atio
ns
Clo
ud i
nfra
stru
ctur
e
Paym
ents
Vide
o G
ames
Fact
ory
auto
mat
ion
robo
tics
Smar
tpho
nes
Big
data
AI
Cyb
erse
curit
y
Auto
mot
ive
IoT
Mat
eria
ls
Med
ical
Tec
hnol
ogy
Elec
tric
Vehi
cles
Emer
ging
3D P
rintin
g
Sola
r
Oth
er
Inte
rnet
Sem
icon
duct
ors
Appl
e
Lega
cy
42For non-US professional investor use only Please refer to the Important Information at the end of this presentation
PCT1 Index Top 100
Index ex Apple
PE (Median) CY 266 176 176NY 235 159 160
Earnings growth (Median) CY 228 194 192NY 134 105 104
EVSales (Mean) CY 62 46 46NY 50 40 41
EVSales (Median) CY 56 40 40NY 49 35 36
EVSales (Weighted) CY 60 49 52NY 51 44 46
Sales Growth (Mean) CY 226 148 148NY 187 94 94
Sales Growth (Median) CY 200 116 114NY 151 73 73
Sales Growth (Weighted) CY 220 168 176NY 166 111 121
Gross Margin (Mean) 614 584 587Gross Margin (Median) 648 604 607Gross Margin (Weighted) 580 570 603Net Cash as mkt cap Avg 87 07 06
Wgtd 89 74 65Market Cap ($m) Mean 67603 73343 63545
Median 7325 20499 20127
Wgtd 331403 421925 312270
PCT Positioning
Sales growth 2019 ndash PCT vs benchmark2
Source 1 Polar Capital 29 October 2018 Figures in blue exclude Apple (15 gross) from the Index Top 100 CY = Current Year NY = 2018 calendar year estimates 2 Polar Capital 28 September 2018 BenchmarkDow Jones World Technology Index (TR) Past performance is not indicative or a guarantee of future results All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subjectto change without notice and do not necessarily represent the views of Polar Capital It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
o
f Por
tfolio
00
100
200
300
400
500
600
lt0 010 1020 2030 3040 4050 gt50
PCT GROSS WEIGHT BENCH GROSS WEIGHT
43For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Appendix
44For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team BiographiesBen Rogoff Director ndash TechnologyExperience 23 yearsBen joined Polar Capital in May 2003 He is lead manager of Polar Capital Technology Trust plc and is a Fund Manager of thePolar Capital Global Technology Fund and Polar Capital Automation and Artificial Intelligence Fund He has been atechnology specialist for 23 years Prior to joining Polar Capital he began his career in fund management at CMI as a globaltechnology analyst He moved to Aberdeen Fund Managers in 1998 where he spent four years as a senior technologymanager Ben graduated from St Catherinersquos College Oxford in 1995
Nick Evans Senior Fund ManagerExperience 20 yearsNick joined Polar Capital in September 2007 and has 20 yearsrsquo experience as a technology specialist He has been leadmanager of the Polar Capital Global Technology Fund since January 2008 and is also a fund manager on the Polar CapitalTechnology Trust and Polar Capital Automation and Artificial Intelligence Fund Prior to joining Polar he was head oftechnology at AXA Framlington and lead manager of the AXA Framlington Global Technology Fund and the AXA world fund(AWF) ndash Global Technology from 2001 to 2007 (both rated five stars by SampP) He also spent three years as a Pan-Europeaninvestment manager and technology analyst at Hill Samuel Asset Management Nick has a degree in Economics andBusiness Economics from Hull University has completed all levels of the ASIP and is a member of the CFA Institute
Fatima IuExperience 12 yearsFatima joined Polar Capital in April 2006 and has 12 yearsrsquo experience She is a fund manager on the Polar CapitalTechnology Fund Polar Capital Technology Trust and Polar Capital Automation and Artificial Intelligence Fund She isresponsible for the coverage of European Technology Global Security Networking Clean Energy and Medical TechnologyPrior to joining Polar Fatima spent 18 months working at Citigroup Asset Management with a focus on consumer productsand pharmaceuticals Fatima holds an MSc in Medicinal Chemistry from Imperial College of Science amp Technology in LondonShe is also a CFA Charterholder
45For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team Biographies contXuesong ZhaoExperience 11 yearsXuesong joined Polar Capital in May 2012 and has 11 yearsrsquo investment experience He is a lead manager of the Polar Capital Automationand Artificial Intelligence Fund and is a Fund Manager on the Polar Capital Technology Trust and Polar Capital Global Technology FundPrior to joining Polar Capital he spent four years working as an investment analyst within the emerging markets amp Asia team at AvivaInvestors where he was responsible for the technology media and telecom sectors Prior to that he worked as a quantitative analyst andrisk manager for the emerging market debt team at Pictet Asset Management He started his career as a financial engineer at Algorithmicsnow owned by IBM in 2005 He holds an MSc in Finance from Imperial College of Science amp Technology a BA (Hons) in Economics fromPeking University and has passed all three levels of the CFA
Brad ReynoldsExperience 11 yearsBrad joined Polar Capital in October 2011 as an Investment Analyst and Trader working as part of the European Market Neutral team witha focus on media and internet In 2014 he joined the Technology team as an Investment Analyst Prior to joining Polar Capital Bradworked at Ratio Asset Management as an analyst and trader and from 2007 to 2011 he worked at FampC as a hedge fund analyst Bradstarted his career in 2001 at Gartmore Investment Management working within the hedge fund team Brad graduated from the University ofHertfordshire with a degree in Business Studies
Paul JohnsonExperience 6 yearsPaul joined Polar Capital in March 2012 as an Investment Analyst on the Polar Capital Technology team Prior to joining Polar CapitalPaul helped manage a private investment fund between 2010 and 2012 Paul holds a BA in History and Politics and a Masters in Historyfrom Keele University He has successfully passed all three levels of the CFA program
Chris WittstockExperience 34 yearsChris joined Polar Capital in July 2017 as a senior technology analyst based in the US Prior to joining Chris led the International researchsales effort at Pacific Crest a technology investment bank that was ultimately acquired by KeyBanc Capital in 2014 Prior to joining PacificCrest in 2004 Chris led the International sales effort at Schwab SoundView the successor company to Soundview Technology Groupwhere he was since 1996 Chris spent significant time in Europe as a derivative products specialist in the late 80s and 90s lastly withMorgan Stanley International He is a graduate of University of Toronto Faculty of Engineering (Industrial)
46For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Important Information This document is provided for the sole use of the intended recipient and is not a financial promotion It shall not and does not constitute an offer or solicitation of an offer to make aninvestment into any fund or Company managed by Polar Capital It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only Clients who haveaccess to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Companyrsquos Prospectus or latest financial report The law restricts distributionof this document in certain jurisdictions therefore it is the responsibility of the reader to inform themselves about and observe any such restrictions It is the responsibility of any persons in possession of thisdocument to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction Polar Capital Technology Trust plc is an Investment Company with investment trust status and assuch its ordinary shares are excluded from the FCArsquos (Financial Conduct Authorityrsquos) restrictions which apply to non-mainstream investment products The Company conducts its affairs and intends to continue todo so for the foreseeable future so that the exclusion continues to apply It is not designed to contain information material to an investorrsquos decision to invest in Polar Capital PLC ndash Global Technology Fund orPolar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 201161EU (ldquoAIFMDrdquo) managed by Polar Capital LLP the appointedAlternative Investment Manager In relation to each member state of the EEA (each a ldquoMember Staterdquo) which has implemented the AIFMD this document may only be distributed and shares may only be offeredor placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD or (2) this document may otherwise belawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor) As at the date of this document the Fund has not been approvednotified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA However such approval may be sought or such notification or registration may bemade in the future Therefore this document is only transmitted to an investor in an EEA Member State at such investorrsquos own initiative SUCH INFORMATION INCLUDING RELEVANT RISKFACTORS IS CONTAINED IN THE COMPANY OR FUNDrsquoS OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR
StatementsOpinionsViews All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the viewsof Polar Capital This material does not constitute legal or accounting advice readers should contact their legal and accounting professionals for such information All sources are Polar Capital unless otherwisestated
Third-party Data Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital Neither Polar Capital nor any other party involved in orrelated to compiling computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof) and all such partieshereby expressly disclaim all warranties of originality accuracy completeness merchantability or fitness for a particular purpose with respect to any data contained herein
Holdings Portfolio data is ldquoas atrdquo the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or Fund The holdings may represent only asmall percentage of the aggregate portfolio holdings are subject to change without notice and may not represent current or future portfolio composition Information on particular holdings may be withheld if it is inthe Company or Fundrsquos best interest to do so It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request This document is not a recommendation to purchase or sell any particular security It is designed to provideupdated information to professional investors to enable them to monitor the Company or Fund
Benchmarks The following benchmark index is used Dow Jones World Technology Index (Total Return) This benchmark is generally considered to be representative of the Technology Equity universe Thisbenchmark is a broad-based index which is used for comparativeillustrative purposes only and has been selected as it is well known and is easily recognizable by investors Please refer to wwwdjindexescomfor further information on this index Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund Security holdings industryweightings and asset allocation made for the Company or Fund may differ significantly from the benchmark Accordingly investment results and volatility of the Company or Fund may differ from those of thebenchmark The indices noted in this document are unmanaged are unavailable for direct investment and are not subject to management fees transaction costs or other types of expenses that the Company orFund may incur The performance of the indices reflects reinvestment of dividends and where applicable capital gain distributions Therefore investors should carefully consider these limitations and differenceswhen evaluating the comparative benchmark data performance Information regarding indices is included merely to show general trends in the periods indicated it is not intended to imply that the fund was similarto the indices in composition or risk
Polar Capital16 Palace Street
London SW1E 5JD
Important Information
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
42For non-US professional investor use only Please refer to the Important Information at the end of this presentation
PCT1 Index Top 100
Index ex Apple
PE (Median) CY 266 176 176NY 235 159 160
Earnings growth (Median) CY 228 194 192NY 134 105 104
EVSales (Mean) CY 62 46 46NY 50 40 41
EVSales (Median) CY 56 40 40NY 49 35 36
EVSales (Weighted) CY 60 49 52NY 51 44 46
Sales Growth (Mean) CY 226 148 148NY 187 94 94
Sales Growth (Median) CY 200 116 114NY 151 73 73
Sales Growth (Weighted) CY 220 168 176NY 166 111 121
Gross Margin (Mean) 614 584 587Gross Margin (Median) 648 604 607Gross Margin (Weighted) 580 570 603Net Cash as mkt cap Avg 87 07 06
Wgtd 89 74 65Market Cap ($m) Mean 67603 73343 63545
Median 7325 20499 20127
Wgtd 331403 421925 312270
PCT Positioning
Sales growth 2019 ndash PCT vs benchmark2
Source 1 Polar Capital 29 October 2018 Figures in blue exclude Apple (15 gross) from the Index Top 100 CY = Current Year NY = 2018 calendar year estimates 2 Polar Capital 28 September 2018 BenchmarkDow Jones World Technology Index (TR) Past performance is not indicative or a guarantee of future results All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subjectto change without notice and do not necessarily represent the views of Polar Capital It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in thisdocument A list of all recommendations made within the immediately preceding 12 months is available upon request
o
f Por
tfolio
00
100
200
300
400
500
600
lt0 010 1020 2030 3040 4050 gt50
PCT GROSS WEIGHT BENCH GROSS WEIGHT
43For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Appendix
44For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team BiographiesBen Rogoff Director ndash TechnologyExperience 23 yearsBen joined Polar Capital in May 2003 He is lead manager of Polar Capital Technology Trust plc and is a Fund Manager of thePolar Capital Global Technology Fund and Polar Capital Automation and Artificial Intelligence Fund He has been atechnology specialist for 23 years Prior to joining Polar Capital he began his career in fund management at CMI as a globaltechnology analyst He moved to Aberdeen Fund Managers in 1998 where he spent four years as a senior technologymanager Ben graduated from St Catherinersquos College Oxford in 1995
Nick Evans Senior Fund ManagerExperience 20 yearsNick joined Polar Capital in September 2007 and has 20 yearsrsquo experience as a technology specialist He has been leadmanager of the Polar Capital Global Technology Fund since January 2008 and is also a fund manager on the Polar CapitalTechnology Trust and Polar Capital Automation and Artificial Intelligence Fund Prior to joining Polar he was head oftechnology at AXA Framlington and lead manager of the AXA Framlington Global Technology Fund and the AXA world fund(AWF) ndash Global Technology from 2001 to 2007 (both rated five stars by SampP) He also spent three years as a Pan-Europeaninvestment manager and technology analyst at Hill Samuel Asset Management Nick has a degree in Economics andBusiness Economics from Hull University has completed all levels of the ASIP and is a member of the CFA Institute
Fatima IuExperience 12 yearsFatima joined Polar Capital in April 2006 and has 12 yearsrsquo experience She is a fund manager on the Polar CapitalTechnology Fund Polar Capital Technology Trust and Polar Capital Automation and Artificial Intelligence Fund She isresponsible for the coverage of European Technology Global Security Networking Clean Energy and Medical TechnologyPrior to joining Polar Fatima spent 18 months working at Citigroup Asset Management with a focus on consumer productsand pharmaceuticals Fatima holds an MSc in Medicinal Chemistry from Imperial College of Science amp Technology in LondonShe is also a CFA Charterholder
45For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team Biographies contXuesong ZhaoExperience 11 yearsXuesong joined Polar Capital in May 2012 and has 11 yearsrsquo investment experience He is a lead manager of the Polar Capital Automationand Artificial Intelligence Fund and is a Fund Manager on the Polar Capital Technology Trust and Polar Capital Global Technology FundPrior to joining Polar Capital he spent four years working as an investment analyst within the emerging markets amp Asia team at AvivaInvestors where he was responsible for the technology media and telecom sectors Prior to that he worked as a quantitative analyst andrisk manager for the emerging market debt team at Pictet Asset Management He started his career as a financial engineer at Algorithmicsnow owned by IBM in 2005 He holds an MSc in Finance from Imperial College of Science amp Technology a BA (Hons) in Economics fromPeking University and has passed all three levels of the CFA
Brad ReynoldsExperience 11 yearsBrad joined Polar Capital in October 2011 as an Investment Analyst and Trader working as part of the European Market Neutral team witha focus on media and internet In 2014 he joined the Technology team as an Investment Analyst Prior to joining Polar Capital Bradworked at Ratio Asset Management as an analyst and trader and from 2007 to 2011 he worked at FampC as a hedge fund analyst Bradstarted his career in 2001 at Gartmore Investment Management working within the hedge fund team Brad graduated from the University ofHertfordshire with a degree in Business Studies
Paul JohnsonExperience 6 yearsPaul joined Polar Capital in March 2012 as an Investment Analyst on the Polar Capital Technology team Prior to joining Polar CapitalPaul helped manage a private investment fund between 2010 and 2012 Paul holds a BA in History and Politics and a Masters in Historyfrom Keele University He has successfully passed all three levels of the CFA program
Chris WittstockExperience 34 yearsChris joined Polar Capital in July 2017 as a senior technology analyst based in the US Prior to joining Chris led the International researchsales effort at Pacific Crest a technology investment bank that was ultimately acquired by KeyBanc Capital in 2014 Prior to joining PacificCrest in 2004 Chris led the International sales effort at Schwab SoundView the successor company to Soundview Technology Groupwhere he was since 1996 Chris spent significant time in Europe as a derivative products specialist in the late 80s and 90s lastly withMorgan Stanley International He is a graduate of University of Toronto Faculty of Engineering (Industrial)
46For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Important Information This document is provided for the sole use of the intended recipient and is not a financial promotion It shall not and does not constitute an offer or solicitation of an offer to make aninvestment into any fund or Company managed by Polar Capital It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only Clients who haveaccess to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Companyrsquos Prospectus or latest financial report The law restricts distributionof this document in certain jurisdictions therefore it is the responsibility of the reader to inform themselves about and observe any such restrictions It is the responsibility of any persons in possession of thisdocument to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction Polar Capital Technology Trust plc is an Investment Company with investment trust status and assuch its ordinary shares are excluded from the FCArsquos (Financial Conduct Authorityrsquos) restrictions which apply to non-mainstream investment products The Company conducts its affairs and intends to continue todo so for the foreseeable future so that the exclusion continues to apply It is not designed to contain information material to an investorrsquos decision to invest in Polar Capital PLC ndash Global Technology Fund orPolar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 201161EU (ldquoAIFMDrdquo) managed by Polar Capital LLP the appointedAlternative Investment Manager In relation to each member state of the EEA (each a ldquoMember Staterdquo) which has implemented the AIFMD this document may only be distributed and shares may only be offeredor placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD or (2) this document may otherwise belawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor) As at the date of this document the Fund has not been approvednotified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA However such approval may be sought or such notification or registration may bemade in the future Therefore this document is only transmitted to an investor in an EEA Member State at such investorrsquos own initiative SUCH INFORMATION INCLUDING RELEVANT RISKFACTORS IS CONTAINED IN THE COMPANY OR FUNDrsquoS OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR
StatementsOpinionsViews All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the viewsof Polar Capital This material does not constitute legal or accounting advice readers should contact their legal and accounting professionals for such information All sources are Polar Capital unless otherwisestated
Third-party Data Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital Neither Polar Capital nor any other party involved in orrelated to compiling computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof) and all such partieshereby expressly disclaim all warranties of originality accuracy completeness merchantability or fitness for a particular purpose with respect to any data contained herein
Holdings Portfolio data is ldquoas atrdquo the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or Fund The holdings may represent only asmall percentage of the aggregate portfolio holdings are subject to change without notice and may not represent current or future portfolio composition Information on particular holdings may be withheld if it is inthe Company or Fundrsquos best interest to do so It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request This document is not a recommendation to purchase or sell any particular security It is designed to provideupdated information to professional investors to enable them to monitor the Company or Fund
Benchmarks The following benchmark index is used Dow Jones World Technology Index (Total Return) This benchmark is generally considered to be representative of the Technology Equity universe Thisbenchmark is a broad-based index which is used for comparativeillustrative purposes only and has been selected as it is well known and is easily recognizable by investors Please refer to wwwdjindexescomfor further information on this index Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund Security holdings industryweightings and asset allocation made for the Company or Fund may differ significantly from the benchmark Accordingly investment results and volatility of the Company or Fund may differ from those of thebenchmark The indices noted in this document are unmanaged are unavailable for direct investment and are not subject to management fees transaction costs or other types of expenses that the Company orFund may incur The performance of the indices reflects reinvestment of dividends and where applicable capital gain distributions Therefore investors should carefully consider these limitations and differenceswhen evaluating the comparative benchmark data performance Information regarding indices is included merely to show general trends in the periods indicated it is not intended to imply that the fund was similarto the indices in composition or risk
Polar Capital16 Palace Street
London SW1E 5JD
Important Information
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
43For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Appendix
44For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team BiographiesBen Rogoff Director ndash TechnologyExperience 23 yearsBen joined Polar Capital in May 2003 He is lead manager of Polar Capital Technology Trust plc and is a Fund Manager of thePolar Capital Global Technology Fund and Polar Capital Automation and Artificial Intelligence Fund He has been atechnology specialist for 23 years Prior to joining Polar Capital he began his career in fund management at CMI as a globaltechnology analyst He moved to Aberdeen Fund Managers in 1998 where he spent four years as a senior technologymanager Ben graduated from St Catherinersquos College Oxford in 1995
Nick Evans Senior Fund ManagerExperience 20 yearsNick joined Polar Capital in September 2007 and has 20 yearsrsquo experience as a technology specialist He has been leadmanager of the Polar Capital Global Technology Fund since January 2008 and is also a fund manager on the Polar CapitalTechnology Trust and Polar Capital Automation and Artificial Intelligence Fund Prior to joining Polar he was head oftechnology at AXA Framlington and lead manager of the AXA Framlington Global Technology Fund and the AXA world fund(AWF) ndash Global Technology from 2001 to 2007 (both rated five stars by SampP) He also spent three years as a Pan-Europeaninvestment manager and technology analyst at Hill Samuel Asset Management Nick has a degree in Economics andBusiness Economics from Hull University has completed all levels of the ASIP and is a member of the CFA Institute
Fatima IuExperience 12 yearsFatima joined Polar Capital in April 2006 and has 12 yearsrsquo experience She is a fund manager on the Polar CapitalTechnology Fund Polar Capital Technology Trust and Polar Capital Automation and Artificial Intelligence Fund She isresponsible for the coverage of European Technology Global Security Networking Clean Energy and Medical TechnologyPrior to joining Polar Fatima spent 18 months working at Citigroup Asset Management with a focus on consumer productsand pharmaceuticals Fatima holds an MSc in Medicinal Chemistry from Imperial College of Science amp Technology in LondonShe is also a CFA Charterholder
45For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team Biographies contXuesong ZhaoExperience 11 yearsXuesong joined Polar Capital in May 2012 and has 11 yearsrsquo investment experience He is a lead manager of the Polar Capital Automationand Artificial Intelligence Fund and is a Fund Manager on the Polar Capital Technology Trust and Polar Capital Global Technology FundPrior to joining Polar Capital he spent four years working as an investment analyst within the emerging markets amp Asia team at AvivaInvestors where he was responsible for the technology media and telecom sectors Prior to that he worked as a quantitative analyst andrisk manager for the emerging market debt team at Pictet Asset Management He started his career as a financial engineer at Algorithmicsnow owned by IBM in 2005 He holds an MSc in Finance from Imperial College of Science amp Technology a BA (Hons) in Economics fromPeking University and has passed all three levels of the CFA
Brad ReynoldsExperience 11 yearsBrad joined Polar Capital in October 2011 as an Investment Analyst and Trader working as part of the European Market Neutral team witha focus on media and internet In 2014 he joined the Technology team as an Investment Analyst Prior to joining Polar Capital Bradworked at Ratio Asset Management as an analyst and trader and from 2007 to 2011 he worked at FampC as a hedge fund analyst Bradstarted his career in 2001 at Gartmore Investment Management working within the hedge fund team Brad graduated from the University ofHertfordshire with a degree in Business Studies
Paul JohnsonExperience 6 yearsPaul joined Polar Capital in March 2012 as an Investment Analyst on the Polar Capital Technology team Prior to joining Polar CapitalPaul helped manage a private investment fund between 2010 and 2012 Paul holds a BA in History and Politics and a Masters in Historyfrom Keele University He has successfully passed all three levels of the CFA program
Chris WittstockExperience 34 yearsChris joined Polar Capital in July 2017 as a senior technology analyst based in the US Prior to joining Chris led the International researchsales effort at Pacific Crest a technology investment bank that was ultimately acquired by KeyBanc Capital in 2014 Prior to joining PacificCrest in 2004 Chris led the International sales effort at Schwab SoundView the successor company to Soundview Technology Groupwhere he was since 1996 Chris spent significant time in Europe as a derivative products specialist in the late 80s and 90s lastly withMorgan Stanley International He is a graduate of University of Toronto Faculty of Engineering (Industrial)
46For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Important Information This document is provided for the sole use of the intended recipient and is not a financial promotion It shall not and does not constitute an offer or solicitation of an offer to make aninvestment into any fund or Company managed by Polar Capital It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only Clients who haveaccess to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Companyrsquos Prospectus or latest financial report The law restricts distributionof this document in certain jurisdictions therefore it is the responsibility of the reader to inform themselves about and observe any such restrictions It is the responsibility of any persons in possession of thisdocument to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction Polar Capital Technology Trust plc is an Investment Company with investment trust status and assuch its ordinary shares are excluded from the FCArsquos (Financial Conduct Authorityrsquos) restrictions which apply to non-mainstream investment products The Company conducts its affairs and intends to continue todo so for the foreseeable future so that the exclusion continues to apply It is not designed to contain information material to an investorrsquos decision to invest in Polar Capital PLC ndash Global Technology Fund orPolar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 201161EU (ldquoAIFMDrdquo) managed by Polar Capital LLP the appointedAlternative Investment Manager In relation to each member state of the EEA (each a ldquoMember Staterdquo) which has implemented the AIFMD this document may only be distributed and shares may only be offeredor placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD or (2) this document may otherwise belawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor) As at the date of this document the Fund has not been approvednotified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA However such approval may be sought or such notification or registration may bemade in the future Therefore this document is only transmitted to an investor in an EEA Member State at such investorrsquos own initiative SUCH INFORMATION INCLUDING RELEVANT RISKFACTORS IS CONTAINED IN THE COMPANY OR FUNDrsquoS OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR
StatementsOpinionsViews All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the viewsof Polar Capital This material does not constitute legal or accounting advice readers should contact their legal and accounting professionals for such information All sources are Polar Capital unless otherwisestated
Third-party Data Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital Neither Polar Capital nor any other party involved in orrelated to compiling computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof) and all such partieshereby expressly disclaim all warranties of originality accuracy completeness merchantability or fitness for a particular purpose with respect to any data contained herein
Holdings Portfolio data is ldquoas atrdquo the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or Fund The holdings may represent only asmall percentage of the aggregate portfolio holdings are subject to change without notice and may not represent current or future portfolio composition Information on particular holdings may be withheld if it is inthe Company or Fundrsquos best interest to do so It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request This document is not a recommendation to purchase or sell any particular security It is designed to provideupdated information to professional investors to enable them to monitor the Company or Fund
Benchmarks The following benchmark index is used Dow Jones World Technology Index (Total Return) This benchmark is generally considered to be representative of the Technology Equity universe Thisbenchmark is a broad-based index which is used for comparativeillustrative purposes only and has been selected as it is well known and is easily recognizable by investors Please refer to wwwdjindexescomfor further information on this index Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund Security holdings industryweightings and asset allocation made for the Company or Fund may differ significantly from the benchmark Accordingly investment results and volatility of the Company or Fund may differ from those of thebenchmark The indices noted in this document are unmanaged are unavailable for direct investment and are not subject to management fees transaction costs or other types of expenses that the Company orFund may incur The performance of the indices reflects reinvestment of dividends and where applicable capital gain distributions Therefore investors should carefully consider these limitations and differenceswhen evaluating the comparative benchmark data performance Information regarding indices is included merely to show general trends in the periods indicated it is not intended to imply that the fund was similarto the indices in composition or risk
Polar Capital16 Palace Street
London SW1E 5JD
Important Information
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
44For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team BiographiesBen Rogoff Director ndash TechnologyExperience 23 yearsBen joined Polar Capital in May 2003 He is lead manager of Polar Capital Technology Trust plc and is a Fund Manager of thePolar Capital Global Technology Fund and Polar Capital Automation and Artificial Intelligence Fund He has been atechnology specialist for 23 years Prior to joining Polar Capital he began his career in fund management at CMI as a globaltechnology analyst He moved to Aberdeen Fund Managers in 1998 where he spent four years as a senior technologymanager Ben graduated from St Catherinersquos College Oxford in 1995
Nick Evans Senior Fund ManagerExperience 20 yearsNick joined Polar Capital in September 2007 and has 20 yearsrsquo experience as a technology specialist He has been leadmanager of the Polar Capital Global Technology Fund since January 2008 and is also a fund manager on the Polar CapitalTechnology Trust and Polar Capital Automation and Artificial Intelligence Fund Prior to joining Polar he was head oftechnology at AXA Framlington and lead manager of the AXA Framlington Global Technology Fund and the AXA world fund(AWF) ndash Global Technology from 2001 to 2007 (both rated five stars by SampP) He also spent three years as a Pan-Europeaninvestment manager and technology analyst at Hill Samuel Asset Management Nick has a degree in Economics andBusiness Economics from Hull University has completed all levels of the ASIP and is a member of the CFA Institute
Fatima IuExperience 12 yearsFatima joined Polar Capital in April 2006 and has 12 yearsrsquo experience She is a fund manager on the Polar CapitalTechnology Fund Polar Capital Technology Trust and Polar Capital Automation and Artificial Intelligence Fund She isresponsible for the coverage of European Technology Global Security Networking Clean Energy and Medical TechnologyPrior to joining Polar Fatima spent 18 months working at Citigroup Asset Management with a focus on consumer productsand pharmaceuticals Fatima holds an MSc in Medicinal Chemistry from Imperial College of Science amp Technology in LondonShe is also a CFA Charterholder
45For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team Biographies contXuesong ZhaoExperience 11 yearsXuesong joined Polar Capital in May 2012 and has 11 yearsrsquo investment experience He is a lead manager of the Polar Capital Automationand Artificial Intelligence Fund and is a Fund Manager on the Polar Capital Technology Trust and Polar Capital Global Technology FundPrior to joining Polar Capital he spent four years working as an investment analyst within the emerging markets amp Asia team at AvivaInvestors where he was responsible for the technology media and telecom sectors Prior to that he worked as a quantitative analyst andrisk manager for the emerging market debt team at Pictet Asset Management He started his career as a financial engineer at Algorithmicsnow owned by IBM in 2005 He holds an MSc in Finance from Imperial College of Science amp Technology a BA (Hons) in Economics fromPeking University and has passed all three levels of the CFA
Brad ReynoldsExperience 11 yearsBrad joined Polar Capital in October 2011 as an Investment Analyst and Trader working as part of the European Market Neutral team witha focus on media and internet In 2014 he joined the Technology team as an Investment Analyst Prior to joining Polar Capital Bradworked at Ratio Asset Management as an analyst and trader and from 2007 to 2011 he worked at FampC as a hedge fund analyst Bradstarted his career in 2001 at Gartmore Investment Management working within the hedge fund team Brad graduated from the University ofHertfordshire with a degree in Business Studies
Paul JohnsonExperience 6 yearsPaul joined Polar Capital in March 2012 as an Investment Analyst on the Polar Capital Technology team Prior to joining Polar CapitalPaul helped manage a private investment fund between 2010 and 2012 Paul holds a BA in History and Politics and a Masters in Historyfrom Keele University He has successfully passed all three levels of the CFA program
Chris WittstockExperience 34 yearsChris joined Polar Capital in July 2017 as a senior technology analyst based in the US Prior to joining Chris led the International researchsales effort at Pacific Crest a technology investment bank that was ultimately acquired by KeyBanc Capital in 2014 Prior to joining PacificCrest in 2004 Chris led the International sales effort at Schwab SoundView the successor company to Soundview Technology Groupwhere he was since 1996 Chris spent significant time in Europe as a derivative products specialist in the late 80s and 90s lastly withMorgan Stanley International He is a graduate of University of Toronto Faculty of Engineering (Industrial)
46For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Important Information This document is provided for the sole use of the intended recipient and is not a financial promotion It shall not and does not constitute an offer or solicitation of an offer to make aninvestment into any fund or Company managed by Polar Capital It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only Clients who haveaccess to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Companyrsquos Prospectus or latest financial report The law restricts distributionof this document in certain jurisdictions therefore it is the responsibility of the reader to inform themselves about and observe any such restrictions It is the responsibility of any persons in possession of thisdocument to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction Polar Capital Technology Trust plc is an Investment Company with investment trust status and assuch its ordinary shares are excluded from the FCArsquos (Financial Conduct Authorityrsquos) restrictions which apply to non-mainstream investment products The Company conducts its affairs and intends to continue todo so for the foreseeable future so that the exclusion continues to apply It is not designed to contain information material to an investorrsquos decision to invest in Polar Capital PLC ndash Global Technology Fund orPolar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 201161EU (ldquoAIFMDrdquo) managed by Polar Capital LLP the appointedAlternative Investment Manager In relation to each member state of the EEA (each a ldquoMember Staterdquo) which has implemented the AIFMD this document may only be distributed and shares may only be offeredor placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD or (2) this document may otherwise belawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor) As at the date of this document the Fund has not been approvednotified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA However such approval may be sought or such notification or registration may bemade in the future Therefore this document is only transmitted to an investor in an EEA Member State at such investorrsquos own initiative SUCH INFORMATION INCLUDING RELEVANT RISKFACTORS IS CONTAINED IN THE COMPANY OR FUNDrsquoS OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR
StatementsOpinionsViews All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the viewsof Polar Capital This material does not constitute legal or accounting advice readers should contact their legal and accounting professionals for such information All sources are Polar Capital unless otherwisestated
Third-party Data Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital Neither Polar Capital nor any other party involved in orrelated to compiling computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof) and all such partieshereby expressly disclaim all warranties of originality accuracy completeness merchantability or fitness for a particular purpose with respect to any data contained herein
Holdings Portfolio data is ldquoas atrdquo the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or Fund The holdings may represent only asmall percentage of the aggregate portfolio holdings are subject to change without notice and may not represent current or future portfolio composition Information on particular holdings may be withheld if it is inthe Company or Fundrsquos best interest to do so It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request This document is not a recommendation to purchase or sell any particular security It is designed to provideupdated information to professional investors to enable them to monitor the Company or Fund
Benchmarks The following benchmark index is used Dow Jones World Technology Index (Total Return) This benchmark is generally considered to be representative of the Technology Equity universe Thisbenchmark is a broad-based index which is used for comparativeillustrative purposes only and has been selected as it is well known and is easily recognizable by investors Please refer to wwwdjindexescomfor further information on this index Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund Security holdings industryweightings and asset allocation made for the Company or Fund may differ significantly from the benchmark Accordingly investment results and volatility of the Company or Fund may differ from those of thebenchmark The indices noted in this document are unmanaged are unavailable for direct investment and are not subject to management fees transaction costs or other types of expenses that the Company orFund may incur The performance of the indices reflects reinvestment of dividends and where applicable capital gain distributions Therefore investors should carefully consider these limitations and differenceswhen evaluating the comparative benchmark data performance Information regarding indices is included merely to show general trends in the periods indicated it is not intended to imply that the fund was similarto the indices in composition or risk
Polar Capital16 Palace Street
London SW1E 5JD
Important Information
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
45For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Team Biographies contXuesong ZhaoExperience 11 yearsXuesong joined Polar Capital in May 2012 and has 11 yearsrsquo investment experience He is a lead manager of the Polar Capital Automationand Artificial Intelligence Fund and is a Fund Manager on the Polar Capital Technology Trust and Polar Capital Global Technology FundPrior to joining Polar Capital he spent four years working as an investment analyst within the emerging markets amp Asia team at AvivaInvestors where he was responsible for the technology media and telecom sectors Prior to that he worked as a quantitative analyst andrisk manager for the emerging market debt team at Pictet Asset Management He started his career as a financial engineer at Algorithmicsnow owned by IBM in 2005 He holds an MSc in Finance from Imperial College of Science amp Technology a BA (Hons) in Economics fromPeking University and has passed all three levels of the CFA
Brad ReynoldsExperience 11 yearsBrad joined Polar Capital in October 2011 as an Investment Analyst and Trader working as part of the European Market Neutral team witha focus on media and internet In 2014 he joined the Technology team as an Investment Analyst Prior to joining Polar Capital Bradworked at Ratio Asset Management as an analyst and trader and from 2007 to 2011 he worked at FampC as a hedge fund analyst Bradstarted his career in 2001 at Gartmore Investment Management working within the hedge fund team Brad graduated from the University ofHertfordshire with a degree in Business Studies
Paul JohnsonExperience 6 yearsPaul joined Polar Capital in March 2012 as an Investment Analyst on the Polar Capital Technology team Prior to joining Polar CapitalPaul helped manage a private investment fund between 2010 and 2012 Paul holds a BA in History and Politics and a Masters in Historyfrom Keele University He has successfully passed all three levels of the CFA program
Chris WittstockExperience 34 yearsChris joined Polar Capital in July 2017 as a senior technology analyst based in the US Prior to joining Chris led the International researchsales effort at Pacific Crest a technology investment bank that was ultimately acquired by KeyBanc Capital in 2014 Prior to joining PacificCrest in 2004 Chris led the International sales effort at Schwab SoundView the successor company to Soundview Technology Groupwhere he was since 1996 Chris spent significant time in Europe as a derivative products specialist in the late 80s and 90s lastly withMorgan Stanley International He is a graduate of University of Toronto Faculty of Engineering (Industrial)
46For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Important Information This document is provided for the sole use of the intended recipient and is not a financial promotion It shall not and does not constitute an offer or solicitation of an offer to make aninvestment into any fund or Company managed by Polar Capital It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only Clients who haveaccess to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Companyrsquos Prospectus or latest financial report The law restricts distributionof this document in certain jurisdictions therefore it is the responsibility of the reader to inform themselves about and observe any such restrictions It is the responsibility of any persons in possession of thisdocument to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction Polar Capital Technology Trust plc is an Investment Company with investment trust status and assuch its ordinary shares are excluded from the FCArsquos (Financial Conduct Authorityrsquos) restrictions which apply to non-mainstream investment products The Company conducts its affairs and intends to continue todo so for the foreseeable future so that the exclusion continues to apply It is not designed to contain information material to an investorrsquos decision to invest in Polar Capital PLC ndash Global Technology Fund orPolar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 201161EU (ldquoAIFMDrdquo) managed by Polar Capital LLP the appointedAlternative Investment Manager In relation to each member state of the EEA (each a ldquoMember Staterdquo) which has implemented the AIFMD this document may only be distributed and shares may only be offeredor placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD or (2) this document may otherwise belawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor) As at the date of this document the Fund has not been approvednotified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA However such approval may be sought or such notification or registration may bemade in the future Therefore this document is only transmitted to an investor in an EEA Member State at such investorrsquos own initiative SUCH INFORMATION INCLUDING RELEVANT RISKFACTORS IS CONTAINED IN THE COMPANY OR FUNDrsquoS OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR
StatementsOpinionsViews All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the viewsof Polar Capital This material does not constitute legal or accounting advice readers should contact their legal and accounting professionals for such information All sources are Polar Capital unless otherwisestated
Third-party Data Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital Neither Polar Capital nor any other party involved in orrelated to compiling computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof) and all such partieshereby expressly disclaim all warranties of originality accuracy completeness merchantability or fitness for a particular purpose with respect to any data contained herein
Holdings Portfolio data is ldquoas atrdquo the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or Fund The holdings may represent only asmall percentage of the aggregate portfolio holdings are subject to change without notice and may not represent current or future portfolio composition Information on particular holdings may be withheld if it is inthe Company or Fundrsquos best interest to do so It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request This document is not a recommendation to purchase or sell any particular security It is designed to provideupdated information to professional investors to enable them to monitor the Company or Fund
Benchmarks The following benchmark index is used Dow Jones World Technology Index (Total Return) This benchmark is generally considered to be representative of the Technology Equity universe Thisbenchmark is a broad-based index which is used for comparativeillustrative purposes only and has been selected as it is well known and is easily recognizable by investors Please refer to wwwdjindexescomfor further information on this index Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund Security holdings industryweightings and asset allocation made for the Company or Fund may differ significantly from the benchmark Accordingly investment results and volatility of the Company or Fund may differ from those of thebenchmark The indices noted in this document are unmanaged are unavailable for direct investment and are not subject to management fees transaction costs or other types of expenses that the Company orFund may incur The performance of the indices reflects reinvestment of dividends and where applicable capital gain distributions Therefore investors should carefully consider these limitations and differenceswhen evaluating the comparative benchmark data performance Information regarding indices is included merely to show general trends in the periods indicated it is not intended to imply that the fund was similarto the indices in composition or risk
Polar Capital16 Palace Street
London SW1E 5JD
Important Information
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
46For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Important Information This document is provided for the sole use of the intended recipient and is not a financial promotion It shall not and does not constitute an offer or solicitation of an offer to make aninvestment into any fund or Company managed by Polar Capital It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only Clients who haveaccess to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Companyrsquos Prospectus or latest financial report The law restricts distributionof this document in certain jurisdictions therefore it is the responsibility of the reader to inform themselves about and observe any such restrictions It is the responsibility of any persons in possession of thisdocument to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdiction Polar Capital Technology Trust plc is an Investment Company with investment trust status and assuch its ordinary shares are excluded from the FCArsquos (Financial Conduct Authorityrsquos) restrictions which apply to non-mainstream investment products The Company conducts its affairs and intends to continue todo so for the foreseeable future so that the exclusion continues to apply It is not designed to contain information material to an investorrsquos decision to invest in Polar Capital PLC ndash Global Technology Fund orPolar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 201161EU (ldquoAIFMDrdquo) managed by Polar Capital LLP the appointedAlternative Investment Manager In relation to each member state of the EEA (each a ldquoMember Staterdquo) which has implemented the AIFMD this document may only be distributed and shares may only be offeredor placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD or (2) this document may otherwise belawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor) As at the date of this document the Fund has not been approvednotified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA However such approval may be sought or such notification or registration may bemade in the future Therefore this document is only transmitted to an investor in an EEA Member State at such investorrsquos own initiative SUCH INFORMATION INCLUDING RELEVANT RISKFACTORS IS CONTAINED IN THE COMPANY OR FUNDrsquoS OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR
StatementsOpinionsViews All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof but are subject to change without notice and do not necessarily represent the viewsof Polar Capital This material does not constitute legal or accounting advice readers should contact their legal and accounting professionals for such information All sources are Polar Capital unless otherwisestated
Third-party Data Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital Neither Polar Capital nor any other party involved in orrelated to compiling computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof) and all such partieshereby expressly disclaim all warranties of originality accuracy completeness merchantability or fitness for a particular purpose with respect to any data contained herein
Holdings Portfolio data is ldquoas atrdquo the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or Fund The holdings may represent only asmall percentage of the aggregate portfolio holdings are subject to change without notice and may not represent current or future portfolio composition Information on particular holdings may be withheld if it is inthe Company or Fundrsquos best interest to do so It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document A list of allrecommendations made within the immediately preceding 12 months is available upon request This document is not a recommendation to purchase or sell any particular security It is designed to provideupdated information to professional investors to enable them to monitor the Company or Fund
Benchmarks The following benchmark index is used Dow Jones World Technology Index (Total Return) This benchmark is generally considered to be representative of the Technology Equity universe Thisbenchmark is a broad-based index which is used for comparativeillustrative purposes only and has been selected as it is well known and is easily recognizable by investors Please refer to wwwdjindexescomfor further information on this index Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund Security holdings industryweightings and asset allocation made for the Company or Fund may differ significantly from the benchmark Accordingly investment results and volatility of the Company or Fund may differ from those of thebenchmark The indices noted in this document are unmanaged are unavailable for direct investment and are not subject to management fees transaction costs or other types of expenses that the Company orFund may incur The performance of the indices reflects reinvestment of dividends and where applicable capital gain distributions Therefore investors should carefully consider these limitations and differenceswhen evaluating the comparative benchmark data performance Information regarding indices is included merely to show general trends in the periods indicated it is not intended to imply that the fund was similarto the indices in composition or risk
Polar Capital16 Palace Street
London SW1E 5JD
Important Information
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
47For non-US professional investor use only Please refer to the Important Information at the end of this presentation
Regulatory Status Polar Capital LLP is a limited liability partnership number OC314700 It is authorised and regulated by the UK FCA and is registered as an investment adviser with the US Securities ampExchange Commission (ldquoSECrdquo) A list of members is open to inspection at the registered office 16 Palace Street London SW1E 5JD FCA authorised and regulated Investment Managers are expected to write toinvestors in funds they manage with details of any side letters they have entered into The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expectedto provide one investor with more materially favourable rights than those afforded to other investors These rights may for example include enhanced redemption rights capacity commitments or the provision ofportfolio transparency information which are not generally available The Fund and the Investment Manager are not aware of or party to any such arrangement whereby an investor has any preferentialredemption rights However in exceptional circumstances such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time certain investors have been or may be provided withportfolio transparency information andor capacity commitments which are not generally available Investors who have any questions concerning side letters or related arrangements should contact the PolarCapital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS) The Fund is prepared to instruct the custodian of the Fund upon request to make available to investorsportfolio custody position balance reports monthly in arrears
Information Subject to Change The information contained herein is subject to change without notice at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this informationin any way
Forecasts References to future returns are not promises or estimates of actual returns Polar Capital may achieve Forecasts contained herein are for illustrative purposes only and does not constitute advice or arecommendation Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place
PerformanceInvestment ProcessRisk Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions Factors affecting the Company or Fundrsquosperformance may include changes in market conditions (including currency risk) and interest rates and in response to other economic political or financial developments Past performance is not a guide to orindicative of future results Future returns are not guaranteed and a loss of principal may occur Investments are not insured by the FDIC (or any other state or federal agency) or guaranteed by any bank andmay lose value No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable
Allocations The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time The types of investments presented herein will not always have thesame comparable risks and returns Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith Please note that theCompany or Fund may elect to invest assets in different investment sectors from those depicted herein which may entail additional andor different risks Performance of the Company or Fund is dependent onthe Investment Managerrsquos ability to identify and access appropriate investments and balance assets to maximize return to the Company or Fund while minimizing its risk The actual investments in the Companyor Fund may or may not be the same or in the same proportion as those shown herein
Country Specific disclaimers The Company or Funds have not been and will not be registered under the US Investment Company Act of 1940 as amended (the Investment Company Act) and the holdersof its shares will not be entitled to the benefits of the Investment Company Act In addition the offer and sale of the Securities have not been and will not be registered under the US Securities Act of 1933 asamended (the Securities Act) No Securities may be offered or sold or otherwise transacted within the United States or to or for the account or benefit of US Persons (as defined in Regulation S of theSecurities Act) In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to and for the account or benefit of non US Personsin offshore- transactions within the meaning of and in reliance on the exemption from registration provided by Regulation S under the Securities Act No money securities or other consideration is being solicitedand if sent in response to the information contained herein will not be accepted Any failure to comply with the above restrictions may constitute a violation of such securities laws
Important Information ContPolar Capital
16 Palace StreetLondon SW1E 5JD
