What is the Allianz Technology Trust?
The Allianz Technology Trust is an investment trust focusing on the global technology market. It currently has over $4 billion in assets under management. It is listed on the London Stock Exchange. As an investment trust it represents a ‘closed-ended’ investment – the trust issues a fixed number of shares. Investors can buy and sell shares in the trust like they would a listed company. The Allianz Technology Trust was launched in 1995 and uses the Dow Jones World Technology Index as its benchmark. It has a 0.8% annual management charge on the first £400 million of its market capitalisation, and levies a further 0.6% thereafter. It has ongoing charges – previously known as the Total Expense Ratio – of 1.0%.
Who manages the Allianz Technology Trust?
The Allianz Technology Trust is managed by an investment team in San Francisco, which puts it close to the deal makers in Silicon Valley. The trust itself is overseen by Walter Price, who has spent over four decades investing in technology stocks. Price is a long-standing Allianz employee, having joined the company in 1974 as a senior securities analyst specialising in technology stocks. Other senior portfolio managers include Huachen Chen (senior portfolio manager) and Danny Su (portfolio analyst).
What does the Allianz Technology Trust invest in?
The Allianz Technology Trust invests in a global portfolio of technology stocks. At the time of writing the trust had over 70% allocated to pure technology stocks, with the rest distributed across other sectors, like consumer services and industrials. Some 7.8% was sitting in cash. Most of the top stocks in the trust’s portfolio are fairly predictable technology plays, but you would expect to see them in a vehicle of this kind. They include Amazon, Alphabet, Microsoft, Teradyne and Square. Amazon looks to be the biggest single holding, at 6.9%. Most of the portfolio is focused on North America, which is unsurprising. The trust leans towards the larger technology stocks, with 26% invested in tech companies with over $100 billion market cap. Interestingly it does not hold a big stake in Facebook.
How has the Allianz Technology Trust been performing in the last 12 months?
The technology sector has been on a blinder recently, so it comes as no surprise that an investment trust that is aimed at the global tech sector has done well. The trust has a one year cumulative return of 40% and 132% over three years which is very respectable. The managers are slapping themselves on the back for being underweight in Facebook, which we could also see was an accident waiting to happen going into 2018. The trust has also been underweight in Tencent while they were overweight (relative to the index) in the likes of Cree and Teradyne.
What does The Armchair Trader think about the Allianz Technology Trust?
Technology has been one of the industries to be in during the last 12 months, and if you want exposure to the bigger names, an actively managed investment trust like this one is a good place to be. The team at Allianz obviously know their tech stocks and probably drink their Starbucks in the same places as some of the senior directors in the big US tech companies. They are close to the coal face and this is going to help them to react to development in the companies in their portfolio. We like the fact that they were able to identify problem children in the portfolio like Facebook and Tencent early on.