INVESTMENT OUTLOOK FOR 2023 - 22 - DISRUPTIVE TECH PAM HEGARTY VINCENT NICHOLS Portfolio manager Investment specialist Secular growth drivers dominate The outlook for the technology sector in 2023 is difficult to assess, given the significant macroeconomic and geopolitical headwinds. However, we remain confident in the durability of the secular growth drivers that underpin our strategy – cloud computing, artificial intelligence, automation, and the Internet of Things – as well as the foundational technologies that enable these themes. We believe that the leaders and beneficiaries of digital transformation will deliver superior revenue growth, earnings, cash flows, and returns over a long-term investment horizon. During most of 2022, the tech sector underperformed the broader market as interest rates rose. As a result, valuations have compressed, with little to no ‘froth’ left today, especially in the semiconductor and software industries. While negative earnings revisions are likely as the economy slows, we see potential for the sector to outperform on a relative basis, given the historical resilience of tech profits during recessions. As growth becomes scarcer, investors may once again be willing to pay up for quality growth. Opportunities as we head into 2023 1. The adoption of cloud computing, artificial intelligence (AI), automation, and the Internet of Things continue as companies strive to save costs and make better decisions. 2. The strategic importance of the digital transformation should provide resiliency to