Financial highlights, insights and analysis from Allianz Technology Trust PLC for the financial year ended 31 December 2023
Allianz Technology Trust PLC (‘the Company’) invests principally in the equity securities of quoted technology companies on a worldwide basis with the aim of achieving long-term capital growth in excess of the Dow Jones World Technology Index (sterling adjusted, total return) (the ‘benchmark’).
The investment policy of the Company is to invest in a diversified portfolio of companies that use technology in an innovative way to gain competitive advantage. Particular emphasis is placed on companies that are addressing major growth trends with innovation that replaces existing technology or radically changes products and services or the way in which they are supplied to customers.
Technology has become a vast and diverse sector. It encompasses those companies that sell technology solutions – from cloud storage to component manufacturers to software developers – but also those for whom technology is an intrinsic part of their business – the car makers or ecommerce groups using technology to gain a competitive advantage. In this way, technology stocks may sit across multiple sectors, including healthcare, industrials or financial services.
As technology becomes ever more pervasive, the lines between technology companies and significant adopters are increasingly blurred. Even where companies aren’t selling technology, technology may be intrinsic to their success as a company. More companies are becoming technology companies all the time as disruptive innovation brings change and displaces incumbent market leaders. The challenge is to understand not only current technologies, but also future trends and the likely effects.
The Investment Manager does not target specific country or regional weightings and aims to invest in the most attractive technology shares on a global basis. The lead portfolio manager aims to identify the leading companies in emerging technology growth sub-sectors. The majority of the portfolio will comprise mid and large cap technology shares.
The Company aims to diversify risk and no holding in the portfolio will comprise more than 15% of the Company’s assets at the time of acquisition. The Company aims to diversify the portfolio across a range of technology sub-sectors.
In normal market conditions gearing will not exceed 10% of net assets but may increase to 20%. The Company’s Articles of Association limit borrowing to one quarter of its called up share capital and reserves. As at 31 December 2023 there was no borrowing facility in place.
In normal market conditions the liquidity of the portfolio, that is the proportion of the Company’s net assets held in cash or cash equivalents, will not exceed 15% of net assets but may be increased to a maximum of 30% of net assets.
The Company may use derivatives for investment purposes within guidelines set down by the Board.
The Company’s current policy is not to hedge foreign currency.
One of the ways in which the Company measures its performance is in relation to its benchmark, which is an index made up of some of the world’s leading technology shares. The benchmark used is the Dow Jones World Technology Index (sterling adjusted, total return). The Company’s strategy is to have a concentrated portfolio which is benchmark aware rather than benchmark driven. The Company has tended to have a significantly higher than benchmark allocation to high growth, mid cap companies which are considered to be the emerging leaders in the technology sector. The Investment Manager believes that the successful identification of these companies relatively early on in their growth stages, offers the best opportunity for outperformance over the long-term.