Allianz Technology Trust: A punt on the software firms that power our internet age
What does it do? The trust aims to make long-term returns by giving investors access to the fast-moving world of technology, removing the need to keep up with and understand the latest developments. It is managed by Walter Price, who is based near Silicon Valley and has more than 40 years’ experience of investing in tech.
What does the manager invest in? As well as the big boys such as Amazon, Microsoft and Facebook, Price scouts smaller software and service companies, and hardware and semiconductor firms providing the computing power and storage for data centres. Around 54 per cent of the portfolio is linked to cloud computing.
As well as the big boys such as Amazon, the trust invests in smaller software and service firms
What do the experts say? In June, the trust’s net asset value rose 0.32 per cent. This outperformed the Dow Jones World Technology Index, which lost 0.8 per cent. Laith Khalaf, an analyst at Hargreaves Lansdown, says: ‘Performance has benefited from the inexorable rise of the sector, which has itself been the major driver of the US market.’
What do the experts like? Khalaf adds: ‘The trust provides a fairly diverse portfolio of primarily American tech stocks.’ Over the past five years it would have turned £1,000 into £3,562.
Any downsides? Khalaf says: ‘Market expectations for many of the big names leave little room for error. Failing to meet growth projections can be very painful, as Facebook shareholders will testify. Valuations do look stretched, so it’s important to make sure this sector doesn’t make up too big a slice of your portfolio.’