investing in technology - trustnet · 2019-05-16 · as desktops, laptops, servers and hard drives....

A guide from Allianz Technology Trust PLC

Investingin technology

Technology: a 21st century growth story

Advances in technology led to electrical engineering, to the internal combustion engine, to global telecommunications and air travel. Developments in modern medicine have been facilitated by technology. Business and entertainment have been transformed by the invention of the personal computer, the internet and now migration to the cloud.

Behind each of these phenomena, there were technology companies reaping the rewards of their innovations. Tech winners are big news. Their headline-grabbing growth draws the attention of mass media and, of course, investors at every level, from

institutions and pension funds down to private investors. It’s no coincidence that five of the ten largest publicly listed companies in the world by market capitalisation are in the technology sector – Apple, Amazon, Alphabet (the parent company of Google), Microsoft, Facebook, Alibaba and Tencent. Apple became the world’s first trillion dollar public company in August 2018, following outstanding performance. Technology is now the largest sector in the S&P 500, making up over 25%.1

But not every tech story is a Microsoft or a Google. According to Steve Jobs, even Apple was 90 days from bankruptcy in

Modern history has seen a remarkable pace of change in almost every aspect of life. Look behind most of these changes and you will find something in common. Transport, energy, communications, healthcare, manufacturing, entertainment, business, education – all have been transformed by advances in technology.

1996. For every big winner, there are examples of tech stocks who haven’t delivered on their promised growth. Even the best ideas need the right business model and management team in place to bring them to fruition.

We believe it takes experience, an extensive network and the strongest research and analytical tools to spot the trends behind the headlines and to identify the potential tech winners. This is why we believe that the experienced long-term investor might find the Allianz Technology Trust PLC to be a valuable complement to a balanced portfolio.

1 Source: Statista ‘The 100 largest companies in the world by market value in 2018’ (11 May 2018)

A guide to investing in technology

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The digital revolution

The origins of the digital revolution can be traced to the invention of the transistor in 1947. More advanced semiconductor technologies followed, notably integrated circuits – silicon chips – which are used in virtually all electronic equipment today. Digital technologies are progressively replacing analog and mechanical predecessors. Vinyl records were superseded by compact digital discs and now digital downloads, film photography was supplanted by the digital camera and the analog computer was replaced by its digital counterpart.

The first personal computers (PCs) came to market just a generation ago in the late 1970s. In 1982, Time magazine named the computer ‘the machine of the year’. By 2008 the number of PCs in use globally had reached one billion. But then came the tablet and shipments of tablet computers matched those of PCs by 2014/15. However, change is inevitable and tablet sales are declining as more flexible laptops and larger screen mobile phones steal their markets.

The original industrial revolution of the 19th century was facilitated by breakthroughs in engineering. The first technological revolution in the early 20th century was characterised by the advent of mass production, the internal combustion engine, petroleum, the discovery of new materials and by advances in electrical engineering and communications. The last part of the 20th century and the start of the 21st is already heralded by many as the digital revolution.

By the end of 2023, penetration of smartphones among adults in developed countries is predicted to exceed 90%, equivalent to sales of over 1.85 billion per year.1

Today, 93% of those with smartphones use them daily and this is predicted to increase. One-third of users pick up their phone within five minutes of waking up.1

1 Source: Deloitte ‘Technology, Media and Telecommunications Predictions 2018’


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2018

A digital time line…

Transistor

Mainframe computer

Silicon chip

Personal computer

World wide web

Digital mobile phone

Cloud computing

Tablet computer

Mass market virtual reality

Self-driving taxis

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Sectors that define technology

SemiconductorsSemiconductors are the components that form the foundation of modern electronics. Integrated circuits – silicon chips – are a form of semiconductor device. A modern integrated circuit can consist of several billion transistors and other electrical components in an area the size of a fingernail. Even though the semiconductor industry is a huge market on its own, it is estimated that it enables four times more in physical products which rely upon semiconductors in their manufacture. The market for semiconductors is one of the most cyclical of technology sectors. By this we mean that demand will tend to recur in cycles, rising at times of global growth, and pulling back at times of reduced corporate and personal spending. Examples of semiconductor companies include Intel Corporation, Qualcomm and Micron Technology, all in the United States, Samsung Electronics and SK Hynix in South Korea, and Toshiba Semiconductor and Sony in Japan.1

Networking and internetGlobal retail e-commerce sales hit $2.3 trillion in 2017. Even in the UK, where retail has had a tough period, online sales continue to grow around 19% year-on-year, fuelled by an increase in mobile sales.2 But linking computers to a broader connected world creates security risks. Increasingly sophisticated hackers are targeting corporate and government networks with various objectives, from stealing credit card details to state espionage. Internet security is set to become a huge theme in technology. Palo Alto Networks and FireEye, both in the United States, are companies providing network security solutions.1

The world of technology today encompasses many sectors, from aerospace, artificial intelligence and biotechnology to nuclear physics, robotics and nanotechnology. But, thanks to the digital revolution, there are currently four ‘mega sectors’ within technology…

1 This is no recommendation to buy or sell any particular security. 2 Source: IMRG, figures to end of April 2018.


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SoftwareComputers are everywhere, from our phones to our cars, but none of them could do anything without software – a general term for programs that control the functioning of computers. Software is less cyclical and, with relative low barriers to entry, provides some of the most fertile sources of innovation in the technology sector. These innovations could be in areas as diverse as entertainment, education or healthcare. They might also relate to broader trends such as cloud computing (see overleaf). With the cloud, companies can offer software as an on-demand service delivered via broadband. Worldwide software spending is expected to increase 9.5% in 2018, with an increasing share of the budget shifting to ‘Software-as-a-Service’.2

1 This is no recommendation to buy or sell any particular security. 2 Gartner, January 2018.

US$3.7 trillionWorldwide spending on information technology forecast for 2018, up 6.2% from 2017.Source: Gartner Worldwide IT Spending Forecast, April 2018.

Computer hardwareComputer hardware is physical equipment such as desktops, laptops, servers and hard drives. Hardware is seeing some of its business encroached upon by developments in software such as the cloud. However, it is still an important technology sector – software needs something to run on whilst networks need huge amounts of hardware in order to function. The extent to which other hardware giants can reinvent themselves for the modern era will be a defining theme over the next decade. As well as Apple, other examples of hardware companies are SanDisk, who manufacture flash memory storage products and Western Digital, whose products include hard disk drives.1 All are headquartered in the United States.


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Cloud computing – potentially the biggest shift in technology since the internet

To establish a client-server model, many organisations purchase the software and hardware they need and keep these assets ‘on-premise’ in their own data centres. The establishment of this technology infrastructure represents a sizeable capital investment. Businesses must also hire experienced personnel to setup and maintain these systems. Periodic hardware and software updates are also a major drain on resources.

Cloud computing, however, provides computing functionality over the internet. Third parties own and maintain the hardware in remote data centres. These deliver the processing power via high-speed broadband connections.

Software can also be installed and run from the remote hardware, not locally on the user’s computer. This ’Software-as-a-Service’ model can also apply to email, storage and sharing, communications and video conferencing, as well as to sophisticated business software such as Salesforce automation and Customer Relationship Management (CRM).1

In the 1970s, client-server computing – whereby employee PCs are connected to company servers in order to access stored data – became the dominant model in business. It has remained so ever since, until now…

Cloud computing could potentially create significant investment opportunities which we believe could be even larger than those in the shift from mainframes to the client-server model that cloud computing supersedes.

1 This is no recommendation to buy or sell any particular security.


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Public cloud market forecast…

Potential benefits of cloud computing

With the cloud, organisations can benefit from reduced capital outlays for technology infrastructure and upgrades – saving money, time, and effort.

Companies can be more flexible in meeting business demands, disaster recovery is much faster and software updates are automated.

Cloud applications in mobile computing also give employees the ability to access their organisations’ critical applications on the move using smartphones and tablets, fundamentally changing the way people work and promoting increased collaboration amongst the workforce.

Consumers too are adopting the technology into their digital lives, storing and accessing personal content such as photographs, music and movies remotely in the cloud. $186.4 bn

The public and private sectors are migrating their technology assets to the cloud at an accelerating rate. New firms will emerge and grow to meet the increasing demands for cloud solutions in hardware, software, and infrastructure, and the existing corporate IT giants have already begun to evolve their business models to keep pace as cloud appears to become the dominant model in 21st century computing.

Estimated public cloud services market size in 2018, up 21.4% on 2017.

Source: Gartner Worldwide IT Spending Forecast, April 2018.

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2

3

4

302.5

260.2

221.1186.4

153.5

2017

$ B

illio

ns

2018 2019 2020 2021

Source: Gartner, April 2018.

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Dow Jones Global Technology total return FTSE 100 total return FTSE All-Share total return

5 years 10 years 20 years

367.9%398.3%

175.4% 163.2%108.9%

41.4%

201.2%

121.8%

44.9%

Reasons to add technology to your portfolioTechnology has matured as a sector since the dot com boom, developing broader, deeper markets, and has now become the single largest contributor to global economic progress. Evolving technology as a percentage contributor to world output growth has risen from 33% in the mid 20th century to 50% in modern times.1 And technology’s share of the S&P 500 index jumped from 6.3% in 1990 to exceed 25% for the first time in early 2018.2

DemandCorporations and governments have seen and experienced the benefits of next generation solutions in areas such as the cloud, storage and networking and are accelerating their transition from last-generation technologies.

ResilienceTech companies can generate rapid growth in defiance of economic conditions. In many instances, the innovations that are the basis of their market offering are not reliant upon resources or supply chains that may be affected by prevailing market forces.

InnovationThe technology sector is an unparalleled source of innovation. Companies that are doing something new may often have a number of years of super-normal returns before the rest of the market catches up. For an investor, this means that share prices can grow very rapidly over a relatively short space of time. However, because of the fast pace of technological development, products or services developed by these companies may soon become obsolete or have relatively short product cycles. This might lead to returns from investing in technology more volatile than those from other sectors.

1 Source: McKinsey Research, 1920 to 1950 compared with 1998 to 2012. 2 Source: S&P Dow Jones Indices, February 2018.

Source: Thomson DataStream, Total return % in GBP, to 31 July 2018. Past performance is not a reliable indicator of future results.

Total return –how the technology sector has performed against UK equities


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ReachEvery other sector of the modern economy is reliant on technology to improve quality or productivity, maintain competitiveness or spur expansion. This gives the technology sector unique growth characteristics, although competition among technology companies may result in aggressive pricing of their products and services, which may negatively affect profitability.

YieldSome large cap technology companies have very high cash flow yields and hundreds of billions of dollars on their balance sheets. They are starting to offer reasonable yields from dividends and could potentially increase their dividends substantially, returning more cash to investors.

Shareholder focusThere is huge competition within the global technology industry for the best engineers. Share options are a common way to allow engineers to participate in the growth of a company on the back of the products they build. But if a company’s share price was to fall significantly, engineers may defect to a rival. This leads to an increased focus on protecting share price and on shareholder returns amongst the management of technology companies.

Long-term performanceTechnology stocks can offer a valuable long-term complement to a portfolio of traditional equities, having outperformed the FTSE 100 over five, ten and twenty years. Please note that past performance is no guide to future performance and the value of investments could go down as well as up.

Source: S&P Dow Jones Indices, 31/7/18. The weightings for each sector of the index are rounded to the nearest tenth of a percent; therefore, the aggregate weights for the index may not equal 100%.

How technology dominates the S&P 500 index

Information Technology 25.6%

Health Care 14.5%

Financials 14.1%

Consumer Discretionary 12.7%

Industrials 9.9%

Consumer Staples 6.9%

Energy 6.2%

Utilities 2.9%

Real Estate 2.8%

Materials 2.6%

Telecommunication Services 1.9%


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Active is: Allianz Technology Trust PLCAllianz Technology Trust is an award-winning UK-listed investment trust that offers access to the investment potential of the technology sector. The Trust aims for superior long-term returns by identifying major trends ahead of the crowd and investing in stocks worldwide that have the potential to become tomorrow’s Microsoft, Google or Apple.

Allianz Technology Trust invests in approximately 60 technology and technology-related companies and provides access to high growth mid-cap companies that have the potential to become tomorrow’s mega-caps. The Trust has the flexibility to invest on a global basis and aims to invest in the most attractive technology companies wherever they are based. It also seeks to hold companies that will create shareholder value with the introduction of a new product or technology. Over the past 20 years, these

might have included PC manufacturers, software companies, internet application developers or the manufacturers of sector-defining consumer devices.

The Trust was formed in December 1995. In April 2007 the Board appointed Allianz Global Investors to manage the Trust’s assets. This decision was based on the performance and experience of its US-based Global Technology Team.

Association of Investment Companies Shareholder Communication Award (Best Specialist Annual Report 2018)This coveted award recognises the Company’s provision of clear and meaningful information to shareholders in an imaginative way.

Investment Week Investment Company of the Year AwardWinner of the Specialist category in both 2015 and 2017. The award recognises excellence in closed-ended fund management and highlights the Company’s consistent performance over time.

Investors Chronicle Top 100 Funds 2013 - 2018Allianz Technology Trust has been chosen from almost 3,000 eligible actively-managed funds as one of Investors Chronicle ‘Top 100 Funds’ for six consecutive years. The Company’s selection is based on its performance history taking account of risk, fees, tenure of manager and consistency of returns.

Online Personal Wealth AwardsThe company was selected as Best Investment Trust 2017 by the users of MoneyAM.

Money Observer Rated Fund 2018The Trust was included in Money Observer’s Rated Funds list for 2018, in recognition of its consistent investment performance.

A ranking, a rating or an award provides no indicator of future performance and is not constant over time.


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“We believe that in a fast moving sector such as Technology, it pays investors more than most to have an active manager, located near the action who can understand, anticipate and react to trends in a dynamic and proactive way.”Kepler Research

Huachen Chen, CFA, Senior Portfolio Manager, Danny Su, Portfolio Manager/Analyst, Mike Seidenberg, Associate Portfolio Manager/Analyst

The Allianz Global Investors Global Technology Team is co-headed by Walter Price and Huachen Chen, who have worked together for more than 30 years and who both have decades of experience working within the sector.

In his long career investing in technology, Walter has had first-hand experience of key events such as IBM and Microsoft’s domination of the PC hardware and software markets, the invention of the internet and the dot com boom, the emergence of social media and the fall and rise of Apple. Spending in cloud computing is rapidly growing and despite high valuations for some cloud and internet companies, addressable markets could be much larger than the revenue today. The Trust believes cloud computing is a development within the technology sector of a magnitude that only happens every 15 or 20 years.

The team includes two experienced portfolio analysts, Danny Su and Michael Seidenberg, who each offer more than a decade’s experience. They are supported by over ten global sector analysts, nine of whom focus purely on technology companies. Based in the US, Europe and Asia, these specialists extend a global reach which is ever-more important in the technology sector.

Walter PriceSenior Portfolio Manager

Walter Price is a CFA charter-holder, Managing Director, Senior Analyst, and Portfolio Manager on the AllianzGI technology team in San Francisco. Walter received his BS with Honours in electrical engineering from M.I.T. and his BS and MS in management from the Sloan School at M.I.T. In 1971 he joined Colonial Management, an investment advisory firm in Boston, where he became a senior analyst responsible for the chemical industry and the technology area.

Walter joined AllianzGI in 1974 as a senior securities analyst in technology and became a principal in 1978. Since 1985, he has had increasing portfolio responsibility for technology stocks and today co-manages the AllianzGI Technology Team which manages $4bn in assets. Walter is a current Director and past president of the M.I.T. Club of Northern California. He also heads the Educational Council for M.I.T. in the Bay Area and is a past Chairman of the AIMR Committee on Corporate Reporting for the computer and electronics industries.

Walter has become a go-to figure in the media for analysis and commentary on investing in technology. He has appeared on CNBC and Sky News.

Sky News, 8 February 2018. © 2018 BSkyB.


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O R E G O N

C A L I F O R N I A

N E V A D A

Boise

Seattle

WA S H I N G T O N

I D A H OAmazon.com

Microsoft

Facebook

ServiceNow

Square

Palo Alto Networks

Micron Technology

Netflix

Arista Networks

Okta

NetApp

Workday

Alphabet Inc

DXC Technology

Tableau Software

NVIDIA

Autodesk

Salesforce.com

Temenos

Paycom Software

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San Francisco

Allianz Global Technology team: at the heart of the industry…Allianz Technology Trust is managed by the highly experienced Allianz Global Investors US-based Global Technology team based in San Francisco. The team benefits from its close proximity to Silicon Valley where many of the world’s key technology companies are headquartered.

Thirteen of the Company’s top twenty holdings are located within fifty miles of the Global Technology team. A further four are within two hours’ flight time and a further two elsewhere in the United States. This is a significant advantage. The team are able to conduct frequent face-to-face meetings –usually two or three a week – with the management of these leading technology companies, assessing investment opportunities

first hand and continually reviewing market prospects. The team’s location at the epicentre of the industry also enables access to emerging technology companies who tend to cluster around the market leaders, where they also have access to a unique mix of academics, engineers and venture capitalists who are able to fund the technology sector’s next generation of ideas.

Source: Allianz Technology Trust Half-Yearly Financial Report to 31 May 2018. Any security mentioned above will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date.

within 50 miles

within 2 hours

elsewhere in the USA

outside of the USA

First-hand knowledge: Allianz Technology Trust’s top twenty holdings


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About Allianz Global Investors…

Grassroots® Research1

In the technology sector, separating products that have widespread appeal from those that may offer elegant technology but no resonance with end buyers is a significant challenge. Financial analysts don’t tend to be very helpful in assessing new models and new companies and, if they do, don’t always understand them very well. A good example of this is the iPhone. At its launch in 2007, relatively few analysts recognised its significance. Certainly, few predicted that sales of iPhones would rise from 1.39 million units in 2007 to 216 million in 2017.2

Allianz Global Investors is a diversified active investment specialist managing €513 billion in assets worldwide. Allianz Global Investors employs more than 700 investment professionals in 25 locations in the US, Europe and Asia and uses specialised in-house researchers around the world to carry out in-depth analysis across economic and industrial sectors. These analysts conduct over 5000 meetings each year with companies that represent potential investments, feeding back their insights to the portfolio managers and their teams.

To build an understanding of whether a product will find traction with consumers, Allianz Technology team uses Grassroots® research surveys. Grassroots® Research is a division within Allianz Global Investors that commissions investigative research for asset management professionals. The Grassroots® research team has a global network of over 300 independent journalists and field force researchers, experts in their field, who use their knowledge to conduct customised surveys that answer key questions about a company’s products and/or services. Allianz Technology Trust uses these surveys to help build a picture of expected demand for a product or service.

1 Grassroots® Research is a division of Allianz Global Investors that commissions investigative market research for as-set-management professionals. Research data used to generate Grassroots® Research reports are received from independent, third-party contractors who supply research that, subject to applicable laws and regulations, may be paid for by commissions generated by trades executed on behalf of clients. 2 Source: Statista, January 2018.

As at 31 March 2018.

“We believe Grassroots® Research ultimately provides an information advantage that other investors may not have.”Walter Price, Senior Portfolio Manager


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Introducing the Allianz Technology Trust Board…

Robert Jeens, MA (Cantab), FCARobert joined the Board on 1 August 2013 and became Chairman on 2 April 2014. Following 12 years with Touche Ross, where he was an audit partner, Robert became Finance Director of Kleinwort Benson Group and subsequently Woolwich plc. He has extensive experience of the asset management industry and is currently a Non-Executive Director of both JPMorgan Russian Securities plc and Chrysalis VCT plc. He has also had experience of technology companies, as Chairman of nCipher plc and as a Non-Executive Director of Dialight plc, and is currently Chairman of Remote Media Group, a cloud-based digital signage company.

Humphrey van der Klugt, BSc(Hons), FCAHumphrey joined the Board on 1 July 2015 and became Chairman of the Audit Committee and Senior Independent Director on 14 April 2016. He is currently a director of JPMorgan Claverhouse Investment Trust plc and Worldwide Healthcare Trust PLC. He is an experienced investment manager and investment company director, having previously served as a director of trusts managed by BlackRock, Fidelity and Standard Life Aberdeen. Humphrey initially qualified as a chartered accountant with Peat Marwick Mitchell & Co. (now KPMG) in 1979, and in 2004 retired from a long career as a fund manager and director of Schroder Investment Management Limited.

As an investment trust, Allianz Technology Trust PLC is an independent company listed on the London Stock Exchange which means the investment manager is accountable to the Trust’s board of directors. The Board is completely autonomous and meets five times a year to ensure that the interests of shareholders are looked after.

“Technology can create new markets, provide lower cost ways of doing things and generate growth when other sectors are less buoyant.”Robert Jeens, Chairman


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Richard Holway, MBERichard joined the Board on 29 January 2007. He was Group Marketing Director for Hoskyns (now Capgemini) before setting up his own technology analysis company in 1986. He is currently the Chairman of TechMarketView LLP. He is a patron of the Prince’s Trust, co-founder of the Trust’s Technology Leadership Group and was a member of the Trust’s advisory board until 2016.

Elisabeth Scott, MA(Hons), MSc Elisabeth joined the Board on 1 February 2015. She was managing director and country head of Schroder Investment Management (Hong Kong) Limited from 2005 to 2008 and Chairman of the Hong Kong Investment Funds Association from 2005 to 2007. She worked in the Hong Kong asset management industry from 1992 to 2008. She is a director of Pacific Horizon Investment Trust plc, Fidelity China Special Situations plc, Dunedin Income Growth Investment Trust plc and Chairman of India Capital Growth Fund plc. She is a board member of the Association of Investment Companies.

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Investment opportunities Within the four ‘mega sectors’ shaped by the digital revolution – semiconductors, internet and networking, hardware and software – we believe that the following have the potential to be key themes in the short term and beyond.

SecuritySecurity breaches are increasing in sophistication and magnitude. In June 2018, UK electricals and mobile phone retailer Dixons Carphone disclosed an attempted hack on one of its processing systems. It joined a long list of companies subject to hackers. Organisations in Europe and the US, inlcuding law firm DLA Piper and Danish shipping giant Maersk, struggled to defeat a malicious ransomware attack known as “Petya”. Security could be a major threat to the development of the internet. Companies have to rethink their policies and are still only in the early stages of adjusting to the various threats presented by a new, more sophisticated, breed of hacker.

Internet of ThingsMore objects, particularly machines, are being embedded with sensors connecting them to the internet. This is known as the ‘Internet of Things’ (IOT). The resulting IOT networks can lead to improved business processes and new business models while reducing costs. In terms of growth prospects, whilst ten billion machines and devices of varying types are connected to the internet today, 75 billion could be connected by 2020. Furthermore, the efficiencies realised by the IOT are expected to create $14.4 trillion in waste reduction and productivity enhancements. The IOT is not confined to business, of course. Consumer products too – from fridges to central heating systems, from cameras to cars – are increasingly connected, redefining the user experience and driving new sales.

Cloud computingCloud computing dramatically alters the economics of software infrastructure. Instead of spending large sums of money to build and maintain their own datacenters, companies can now hire a cloud vendor for a subscription fee, saving up to 50% of their IT costs. Cloud also boosts productivity because it takes less time to bring products and services to market, creating more opportunities for companies to develop innovative solutions for businesses and consumers. It’s thought that more than $1 trillion in IT spending will be directly or indirectly affected by the shift to cloud during the next five years. The aggregate value of business moved to the cloud in 2018 is estimated to be $186 billion, increasing to $302 billion by 2021.1

Artificial intelligence (AI)With the massive amounts of data available from the cloud, smartphones, and connected devices, coupled with more powerful computing capabilities, AI applications are becoming more robust and useful for business applications. AI applications can now use vast amounts of data to make decision-making more efficient and effective for humans.

Artificial Intelligence is also being used to automate complex physical tasks, making factories more efficient. It can also be used to automate mundane, processing tasks allowing workers to focus on more value-added jobs. For example, amongst its many useful applications, AI solutions can read and analyse thousands of pages of research in seconds, make driverless vehicles “smarter” over time, or make shopping faster and more convenient.

1 Source: Gartner, April 2018. The information above is provided for illustrative purposes only; it should not be considered a recommendation to purchase or sell any particular security or strategy or investment advice.


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“Security as a theme is just getting started and companies are still only in the early stages of adjusting to the various threats presented by a new, more sophisticated, breed of hacker.”

Walter Price, Senior Portfolio Manager

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The benefits of Allianz Technology TrustIn summary, we believe Allianz Technology Trust offers a number of potential benefits to investors looking to invest in the growth potential of technology in a long term investment portfolio.

Expert access to a specialist sectorAllianz Technology Trust offers investors access to the complex, fast moving world of technology with the reassurance that investment decisions are made by a manager with over 40 years of experience of investing in technology assisted by a team informed by the significant research resources of Allianz Global Investors.

At the heart of the industryWalter Price and the team take advantage of being based in San Francisco and have close and regular contact with the growth companies that are identified for the portfolio. Many of the world’s technology companies are headquartered locally.

Potential for diversificationAllianz Technology Trust’s portfolio typically consists of around 60 stocks across a range of technology sub-sectors and no holding in the portfolio will comprise more than 15% of the Trust’s total assets at the time of acquisition. This spreads the risk as there is no reliance on the success of just one or two investments.

Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors may not get back the full amount invested. Competition among technology companies may result in aggressive pricing of their products and services, which may affect the profitability of the companies in which the Trust invests. In addition, because of the fast pace of technological development, products or services developed by these companies may become rapidly obsolete or have relatively short product cycles. This may have the effect of making the Trust’s returns more volatile than the returns of a fund that does not invest in similarly related companies.


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Cost-effective solutionBuying shares in an investment trust can be less costly than purchasing the underlying stocks individually. This can be particularly true in the technology sector as the price of some companies can reach several hundred dollars a share.

Independent, experienced boardLike all investment trusts, Allianz Technology Trust is an independent company listed on the London Stock Exchange. The investment manager is accountable to the Trust’s autonomous board of directors, safeguarding shareholder interests.

Long-term convictionAs an investment trust, Allianz Technology Trust has a fixed number of shares in circulation at any one time. This frees the managers from the obligation of selling holdings – irrespective of their investment convictions – in the event of redemptions, as would be the case with an open-ended investment fund. Instead, they are able to implement a measured, long-term investment strategy and to make portfolio decisions purely in terms of achieving investor objectives. Please note that investment trusts are quoted companies listed on the London Stock Exchange. Their share prices are determined by factors including demand, or lack of, which means that the shares may trade below (at a discount to) or above (at a premium to) the underlying net asset value.

“There is no substitute for first-hand knowledge.”

Huachen Chen, Senior Portfolio Manager

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You will find much more information about Allianz Technology Trust on our website. As well as the latest performance information including fact sheets and daily share prices, you’ll also be able to watch videos, read the very latest Stock Exchange announcements and other press cuttings of interest and download the most recent annual report.

How to invest

Allianz Technology Trust PLC is a UK-based investment trust traded on the London Stock Exchange. You can easily invest in the Trust by purchasing shares through an investment platform, a stockbroker or a financial adviser.

Many investment platforms allow you to hold shares within an Individual Savings Account (ISA), Junior ISA, Self Invested Personal Pension (SIPP) and/or savings scheme. You should note, however, that savings schemes vary in terms of their charges and make sure that you understand what the charges are and that you are happy with them.

A list of investment platforms through which you can buy shares in Allianz Technology Trust is available on our website or from our Investor Services team. They can also help if you have any queries or would like to join our mailing list for Financial Reports or fact sheets. You might also like to keep in touch with Walter Price’s views on the technology sector by subscribing to our Insights From Silicon Valley emails. Our Investor Services team can be reached on:

0800 389 4696 email: [email protected]

www.allianztechnologytrust.com


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Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors may not get back the full amount invested. Past performance is not a reliable indicator of future returns. You should not make any assumptions on the future on the basis of performance in-formation. The information provided in this document including any expression of opinion is for information purposes only and is given on the understand-ing that it is not a recommendation and anyone who acts on it, or changes their opinion thereon, does so entirely at their own risk. The opinions expressed are based on information which we believe to be accurate and reliable, however, these opinions may change without notice. The data used is derived from various sources, and assumed to be correct and reliable, but it has not been independently verified; its accuracy or completeness is not guaranteed and no liability is assumed for any direct or consequential losses arising from its use, unless caused by gross negligence or wilful misconduct. This is a marketing communication issued by Allianz Global Investors GmbH, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42-44, D-60323 Frankfurt/Main, registered with the local court Frankfurt/Main under HRB 9340, authorised by Bundesan-stalt für Finanzdienstleistungsaufsicht (www.bafin.de). Allianz Global Investors GmbH has established a branch in the United Kingdom which is subject to limited regulation by the Financial Conduct Authority (www.fca.org.uk). This is not a recommendation or solicitation to buy or sell any particular security. A stock mentioned as example in the video will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subse-quent date. This communication has not been prepared in accordance with legal requirements designed to ensure the impartiality of investment (strategy) recommendations and is not subject to any prohibition on dealing before publication of such recommendations. Allianz Technology Trust PLC is incorpo-rated in England and Wales. (Company registration no. 3117355). Registered Office: 199 Bishopsgate, London, EC2M 3TY. VAT registration no. 678 1784 81. The Company is a member of the Association of Investment Companies - Category: Sector Specialists - Technology, Media & Telecoms.

Allianz Technology Trust PLC199 BishopsgateLondonEC2M 3TY

+44 (0)207 859 9000 www.allianztechnologytrust.com

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investing in technology - trustnet · 2019-05-16 · as desktops, laptops, servers and hard drives....

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