Allianz Technology Trust is managed and managed by the AllianzGI Global Technology team, based in San Francisco. It is close to Silicon Valley, where many of the most important technology companies in the world are based.
In recent years, the Allianz Technology Investment Trust LON:ATT has seen a surge in popularity for technology stocks. The trust has provided a 37% annualised return over the last five years, compared to a 15% compounded annual rate for S&P 500.
It has outperformed most of its peers. The trust has been a top quartile performer over the past five year, with its 380% five year return significantly higher than that of the Investment Trust Technology & Media benchmark’s 293%.
This has more than offset the volatile share price performance of the company, which is highlighted by its Sharpe Ratio (1.29) over the last three years. This is the company’s top quartile performance in comparison to its peers.
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What is the discount on Allianz Technology Investment trading?
Despite its solid performance, the trust trades at 0.5% below its net asset value (NAV). This is evident due to its disappointing performance in recent months, when its shares fell 13% over the last three months.
Its underperformance was due to a shift from growth-oriented stocks towards value opportunities. Stock selection was also a factor. Its performance in comparison to the benchmark has been hampered by its underweight position on Facebook and poor performances from holdings like Crowdstrike over the past few month.
The recent decline in share prices could be a buying opportunity for a long-term perspective. Many of the company’s holdings look promising. Many industries are increasingly dependent on new technology. This is evident as companies seek to lower costs by using artificial intelligence and automation.
Broad exposure to technology sector
The Allianz Technology Investment Trust offers broad exposure to technology. The trust currently holds 68 holdings, which provide significant diversification. Its top ten holdings include household names like Microsoft and Amazon. Nearly 88% of its holdings are listed on North American stock exchanges, which is not surprising given the dominance of the technology sector in North America. Although Asia accounts for only 6% of its assets, it has a modest exposure to Asia.
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The trust is a large and mid-cap trust, with 36% of its holdings having a market capitalisation of more than $100bn. The trust is exposed to the high valuations of many large US technology companies. This could limit the trust’s chances of outperforming the stock market in the near term, especially if the ongoing threats to growth such as the US pandemic or tax changes may impede growth.
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Its OCF of 0.8% for ongoing charges is comparable to many sector peers. It charges a 12.5% performance fee for outperformance of trust’s NAV, compared to the index NAV. The trust’s NAV is subject to a maximum of 2.255% each year.
The trust offers a solid opportunity for capital growth over the long-term, despite this. Its strong track record in outperformance, broad exposure to US technology and modest discount to NAV all suggest that it is attractive for investment. The recent decline in share prices could be a selling opportunity.
Allianz Technology Trust PLC
Technology investment from the heart
Allianz Technology Trust PLC, a UK-listed investment trust that has won awards1, offers investors access to the potential of the technology sector. The Trust seeks long-term capital growth through identifying key trends ahead of others and investing in stocks around the world that could become tomorrow’s Apple, Google, or Microsoft.
The Trust invests in technology companies from mid-sized to large sizes. We hold companies that we believe will benefit from continued growth in certain sub-sectors. It seeks companies that can create shareholder value through the introduction of new products or technology. This would include software, consumer devices, and PC manufacturers over the past 20-years.
Reasons to Invest Allianz Technology Trust
Diversified but focused: Allianz Technology Trust is a portfolio that invests in companies that use technology to create a competitive advantage. Companies that address major growth trends by using innovation to replace existing technology, or fundamentally change products and services, and how they are delivered to customers, are given special attention.
Technology is a source of unparalleled innovation. All economic sectors rely on it to increase quality and productivity, boost competitiveness, or spur growth. Technology has unique growth characteristics. However, there may be increased competition between technology companies, which could lead to higher prices for their products or services. This may impact profitability.
The Manager is located at the center of the action. He continues to make use of San Francisco’s many benefits and maintains close contact with growth companies. Twelve of the Trust’s twenty top holdings are within 50 miles from the Manager’s office. Three more are located within two hours of the Manager’s offices, and three further in the United States.
Extensive experience of the Manager: Walter Price, the Manager, has more than 40 years of experience in investing in technology. He and his team are highly regarded in their industry.
Long-term performance: Technology stocks can be a valuable addition to a portfolio that includes traditional equities. They have outperformed the FTSE All Share Index for 3, 5, and 10 years. However, past performance is not an indicator of future returns. Investments and income may have a fluctuating value.
Awards recognition: Allianz Technology Trust received six consecutive Investors Chronicle Top 100 Fund’ awards. While some awards reflect the opinions of industry experts, others are voted by individual investors who own stocks and shares. They all contribute to raising awareness about the Trust and the potential investment opportunities in the technology sector.