Allianz Technology Trust

The trust uses bottom-up stock selection – but with a top-down macroeconomic overview – to build a portfolio of 40-70 stocks. As mentioned, the team are based in close proximity to Silicon Valley and have great access to management teams and have a wider network to lean into for opportunities.

The first stage of the process covers idea generation. Here the team identify major trends via internal research, conferences, company management, sell-side and Allianz’s own Grassroots Research investigative reports, which are often contracted out to third parties to generate insights into various areas of the market. The managers will look to build as wide a picture of the company and the sub-sector as possible by talking to suppliers, customers and competitors

The team are seeking to identify companies with sustained earnings growth, a strong market position with barriers to entry, strong balance sheets and high-quality management.

Portfolio construction is where the team seek diversification by offering exposure to numerous themes, such as AI, cyber security and software. They do not want to have an over-reliance on one specific theme as this could be harmful in a sector which can have periods of significant volatility.

The majority of the portfolio will typically be held in large ($30-200bn) and mega-cap ($200bn+) stocks, although it can invest in mid and small-caps. The trust has the majority of its assets invested in US companies, although many of them derive their revenues on a global scale.

Although the technology sector tends to be more volatile than the broader market, the team do try to mitigate risk through diversification, stock sizing and sector positioning. The focus on technology means the trust is strongly biased towards growth. Risk is monitored on a daily basis by the investment team, combined with independent firm-wide analysis & oversight.

Allianz Global Investors has a policy of putting ESG at the core of investment thinking. It treats ESG issues as a source of potential risk, and therefore focuses on identifying them through a variety of sources to assess whether that risk could impact the investment case. This work is conducted through a proprietary ESG Risk Signal system. It uses third-party data initially, before being built on internally to identify potential concerns. These concerns are given to managers and analysts who then review and discuss potential risks.

Voya Investment Management also has its own processes for ESG integration. These include a fundamental analysis which includes engaging in dialogue with companies, as well as each analyst providing their own insight and the creation of an ESG scorecard. Quantitative analysis researches systematic ways to generate alpha, including ESG-related signals. The team are also active owners through engagement and proxy voting with a view to improving the long-term sustainability of companies.

The trust does not use gearing and has no debt facilities. This is because both the board and managers acknowledge the sector can be more volatile than the broader market.

The trust has typically traded at a discount over the past five years (averaging at 8.1%)*. This has varied in that time between a 6.6% premium and a 20.4% discount. The trust has a buyback facility in place at 7% and will discuss the potential for buybacks with its broker should it pass this level.

*as at 7 May 2025