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Fund Profile

Allianz Technology Trust 31 October 2018

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Allianz Technology Trust. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
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Overview

Around a year after it developed a specific “Brexit” page, the FT newspaper app now has a dedicated Technology section. Either this marks the very top of the market (we think not), or it is a rather late acknowledgement from the FT that the technology sector impinges ever more in every aspect of our lives and at the same time has delivered exceptionally strong returns for investors in these companies.

For investors wanting exposure to this area, Allianz Technology Trust (ATT) represents a very actively managed specialist investment trust, managed by one of the most experienced technology investment teams in the world, which has delivered excellent returns over the years.

Despite some clouds continuing to hang over the technology sector’s largest names, the portfolio has witnessed a significant re-shaping since September 2017. It has shifted capital away from mega caps to mid caps, and has continued to increase the number of stocks held. The ATT team now has around 50% of the portfolio exposed to companies expected to benefit from “the cloud”, and has slashed exposure to China and semi-conductors.

This represents a marked change in risk appetite and the re-positioned portfolio now offers, according to Allianz Global Investors' (AllianzGI’s) estimates, earnings growth for the next 12 months of 20%+, nearly twice that of the benchmark. Recognising that interest rates and discount rates are rising, manager Walter Price is mindful of valuations, and whilst the portfolio is expensive on a forward P/E of 33x, the realised PEG (or PE to Growth) ratio will be lower than the benchmark in the year ahead.

Walter and his team in San Francisco have developed a long-term track record stretching back several decades. The team took over management of ATT over ten years ago, over which period the trust has generated NAV total returns (to 30th Sept) of 593%, outperforming the benchmark by an exceptional 202%. Over one year ATT has posted a strong relative performance against both the wider market and the DJ World Technology Index, up 10.1% in the year to 28th October 2018, against the benchmark return of 4.3%. ATT has total assets of £463m.

Kepler View

There are relatively few specialist technology funds in the UK trust and OEIC universe, but ATT has outperformed the vast majority of them. We believe this is thanks to the team’s flexible stock picking approach and focus on seeking to identify areas of 'innovative disruption', and invest in what they see as the next 'mega cap' businesses. However, one can’t discount the advantage it has of being based in the midst of 'the action' in San Francisco.

Historically, ATT has traded on a wider discount than its closest listed peer, PCT. However, for a while now this situation has reversed and the trust trades on a small premium to NAV (of 2.9% at 30 Oct 18) as compared to PCT’s discount of 4.9% - in our view, reflecting the stronger performance and active stock picking employed by the AllianzGI team.

The team’s active investment process, flexibility and high-conviction approach has delivered considerable value over the last ten years, with the portfolio now tilted towards the 'high growth' beneficiaries of the continued move towards the cloud.

Bull
Bear
Active stock picking in a specialist area
High P/E relative to market could offer little protection in prolonged market drawdown
Team has delivered strong historic growth
Premium to NAV could suffer if sentiment falls
Simple, flexible mandate
The trust has a performance fee
Continue to Portfolio

Fund History

20 Mar 2024 Allianz Technology Trust
Michael Seidenberg
Join us for this webinar as part of our month-long online series 'Themes for your ISA in 2024' hosted by the team at Kepler Trust Intelligence throughout March...
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14 Feb 2024 Rise of the Machines
We look at some potentially exciting technology themes outside of the AI realm and share ways for investors to gain exposure without the hefty price tag…
14 Feb 2024 Allianz Technology Trust offers a rare, discounted exposure to technology
ATT is trading at a 14.5% discount…
10 Jan 2024 Definitely maybe
Fund flows and discounts may shed some light on a once-in-a-generation opportunity…
18 Oct 2023 Computer says no
Markets are fixated on replacing humans with AI, rather than maintaining them with biotech. Could this be an opportunity to rotate profits?
18 Aug 2023 Fund Analysis
ATT offers stock selection prowess in a high growth sector, yet is trading at a wide discount…
19 Jul 2023 Simply the Best
Investing in high quality companies was a successful strategy for many years, but has its time passed?
19 Apr 2023 Are we nearly there yet?
We look at which trusts have done best year to date, and ask where there may be value…
23 Mar 2023 The first course: week one of our ISA event in review
We look at the first four presentations of our ISA season event…
08 Mar 2023 Allianz Technology Trust - Live from Silicon Valley
Michael Seidenberg
Rewatch this webinar from our month-long online series 'A feast of ideas for your ISA' hosted by the team at Kepler Trust Intelligence throughout March...
Watch Recording
21 Dec 2022 Reasons to be cheerful
We find reasons to be cheery this Christmas in the long-term trends which are going to transform society and generate returns…
23 Nov 2022 Guns n’ roses
A sustainable future for the free world may depend on investments in weapons and oil as well as traditional ESG friendly assets…
13 Oct 2022 Fund Analysis
Robust portfolio, a sector sell-off, and a wide discount make ATT a ‘buy the dip’ opportunity…
27 Jul 2022 Has the comeback begun?
Our analysts debate whether the market has fully priced in the current inflation and looming recession…
22 Jun 2022 Spider's web
We outline our new quantitative system for mapping the crucial performance characteristics of investment trusts…
25 Mar 2022 Slides and Audio: Allianz Technology Trust
Download the presentation and listen to the audio from our 'Ideas for your ISA' virtual Spring event on 17 March...
23 Mar 2022 Fifteen ideas for your ISA
Slides and audio from our event last week, featuring fund managers running money in every major market in the world...
23 Feb 2022 Regime change
Ahead of our spring conference, we ask whether investors need to junk their portfolios and start again…
09 Feb 2022 Fund Analysis
Despite ATT’s strong long-term performance, it trades at an attractive discount…
14 Jul 2021 Fund Analysis
ATT's active approach means current discount could offer opportunity…
30 Jun 2021 Inflation – a real threat or hot air?
Two of our analysts ask whether recent high inflation numbers indicate something long-lasting and troubling is happening…
22 Apr 2021 FAANGs for the memories
The massive outperformance of mega-cap tech last year could become a thing of the past if anti-trust legislation and negative sentiment starts to bite...
31 Mar 2021 East End boys and West End girls
Our analysts debate whether the US or Asian stock markets will deliver the best returns over the next decade…
24 Mar 2021 Shoot to Thrill: ISA targets for long term growth
We all intend to invest for the long-term but can often be distracted by the news...
10 Mar 2021 Spring Conference '21
Audio and presentations from 21 of the UK’s leading investment trust managers…
04 Mar 2021 Slides and Audio: Allianz Technology Trust
Download the presentation and listen to the audio from our 'Ideas for your ISA' Spring Conference on 03 March...
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
16 Dec 2020 Fund Analysis
ATT offers a unique portfolio of technology stocks, performing strongly during COVID-19…
19 Nov 2020 Hope springs eternal
The US election has given long-suffering value investors new hope of a 'great rotation' in their favour, but that light at the end of the tunnel could in fact be a train…
26 Aug 2020 Trump v. Biden
Two of our analysts debate who will win the US election and what that means for markets…
15 Jul 2020 Why stagflation is likely and how to protect your portfolio from it
Our analysis suggests a combination of cost-push inflation and economic hardship could lead to a short, but unpleasant, period of stagflation...
09 Jul 2020 The next big thing: two mega-trends that everyone should own
Tech has beaten almost everything hands down – but nothing lasts forever. Where else should investors be looking for secular growth themes?
16 Jun 2020 Factor performance and the COVID-19 effect
Will value continue to move into the black, or fade to red?
20 May 2020 Riding for a fall?
We consider the risks which could derail the multi-year tech boom…
13 May 2020 Sea change
While global giants like Amazon still hold the weather gauge, we examine the long term prospects for a shift in the prevailing wind...
15 Apr 2020 Fund Analysis
Active specialist manager, performed strongly in the COVID-19 downturn...
02 Oct 2019 Fund Analysis
The Allianz Technology Trust invests in a portfolio of technology companies, with a bias towards mid-cap companies with significant earnings growth potential...
10 Apr 2019 Because they're worth it
With the rise of the passives putting more pressure on fees than ever before, we argue that performance fees could be the key to encouraging truly active investment trust managers...
29 Mar 2019 Fund Analysis
A very actively managed specialist trust, with one of the most experienced technology investment teams in the world at the helm...
31 Oct 2018 Fund Analysis
Allianz Technology Trust is a very actively managed specialist investment trust, managed by one of the most experienced technology investment teams in the world...
31 Oct 2018 The Trump effect
Two years after the shock election of Donald Trump, we take a look at what the Trump administration has really meant for US markets and the trusts that invest in them...
26 Apr 2018 Fund Analysis
Allianz Technology Trust (ATT) offers exposure to companies involved in 'innovative disruption' in sectors as wide ranging as automobiles, advertising, security, retail and web services
26 Apr 2018 The $23.9 trillion dollar question*
Are US equities, which have hit record highs on 71 occasions in the last 12 months, overpriced or are they actually trading at a price worth paying?
27 Sep 2017 Winners and losers from tomorrow’s world
Searching for the Tesla of tomorrow…
27 Sep 2017 Fund Analysis
A pure exposure to disruptive technology...
21 Feb 2017 Don't wanna be an American idiot
We highlight various routes to US exposure for those who are not sure how much faith they place in the 'Trump Bump'...
16 Feb 2017 Fund Analysis
16 Nov 2016 Fortune favours the brave
Our analysis shows that technology trusts are far less risky than the returns they have generated suggest...
View all

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