
Navigating the next phase of the technology cycle
A guide to the Allianz Technology Trust
Please note, the interview for this article took place on 4 September 2025
It is very rare that you meet a manager of a trust that has returned over 130% in the past three years* – only to hear them tell you that they’re not in the sweet spot of their investment cycle.
However, that is precisely the impression we get from Allianz Technology Trust (ATT) manager Mike Seidenberg, who acknowledges that in an “ideal world” he would be taking money out of mega-caps and recycling it into mid and large-cap opportunities – this has been the lifeblood of ATT for a number of years.
ATT seeks long-term capital growth by scouring the globe to build a diversified portfolio of technology stocks. The management team focuses on themes that are addressing major growth trends that can replace existing technology or change how products and services are being made available to consumers. The result is a high-conviction portfolio of 40-70 names.
Mike Seidenberg has been lead manager of ATT since July 2022, and works alongside fellow managers Danny Su and Erik Swords. Long-term performance has been incredibly strong, returning 766% in the past decade from a share price perspective (824.1% NAV)*.
Investment Process
The trust uses bottom-up stock selection – but with a top-down macroeconomic overview – to build a portfolio of stocks. The team are based in close proximity to Silicon Valley and have great access to management teams and 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, cybersecurity 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 and does focus on mid and small-caps – something which has helped diversify performance in the past. ATT has the majority of its assets invested in US companies, although many of them derive their revenues on a global scale.
Why now for this portfolio
- Exceptional long-term outperformance and has held up well despite an underweight to mega-caps recently.
- Focus on mid and large-cap offers diversification from mega-cap exposure.
- Close proximity to Silicon Valley gives the team an on-the-ground advantage.
- Stock picking has demonstrated an ability to invest in structural themes from numerous angles.
- Attractive double-digit discount.
Manager’s View
“There is a real focus – almost an audit – going around what AI means for businesses, but I remain confident in the outlook around technology, particularly after the challenging period we saw with tariff uncertainty. The global economy is doing alright and technology companies have shown themselves to be robust and resilient.”
Mike says the decision to do very little during the height of tariff uncertainty has served ATT well in 2025. He acknowledges that although there was a lot of uncertainty from a product perspective, waiting allowed them to simply recoup those losses once things settled down.
ATT’s managers did make some changes in Q1 and have been overweight semiconductors, citing the continued growth of AI. The way Mike and the team do this is by not only investing in the obvious names (in this case NVIDIA) but also the second and third derivatives of a major theme. For example, they have a holding in Amphenol, which designs, manufactures and markets connectors and interconnect systems.
He says: “I can’t be overweight NVIDIA, it is over 15% of the benchmark – we don’t think a single stock should carry that much weight and it is 10% of our portfolio. We make our money by trying to identify those major themes and play them as many ways as possible.
Mike is restricted to 10% in a single stock for risk-management purposes, meaning a forced underweight to the largest stocks in the index such as NVIDIA and Apple in the past two years as they have rallied. It should be noted that being underweight Apple has helped performance in 2025.
Three structural themes
There are three significant themes which all appear prominent in Mike’s portfolio – namely AI, cybersecurity and software.
AI remains a powerful secular theme, with applications expanding across industries and driving demand for semiconductors, cloud infrastructure and cybersecurity. The emergence of Chinese challenger DeepSeek and other frontier models has further intensified interest in the space, reinforcing the sector’s long-term growth potential.
But it also plays into the other themes. For example, Mike sees AI as a cybersecurity tax. He believes the data is so valuable that the last thing you want to do is have this corrupted – making it the best area of spend in the technology sector.
He says: “Cybersecurity will have huge spend long after I’ve gone. We live in a world where we are all present digitally on networks. Our adversary is not five blokes with face masks trying to break into a retail bank, it is well-funded nations states like Russia, China and North Korea. There are more people living in a digital world and the adversary is more sophisticated and that requires spend.
“Our brand perception is based on watching TV; for our children it is more about what the digital experience is like. This requires companies to spend consistently on cybersecurity.”
There is currently a consolidation play taking place in this space with names like Palo Alto and Crowdstrike – with the aim being more companies offering a suite of cybersecurity products to clients, rather than one or two specialist services, which means a company will need a number of vendors to meet all its needs.
Mike says: “There will always be room for young and nimble companies to a certain degree. In cybersecurity, the adversaries change vectors, so they attack networks, companies and individuals. Cybersecurity really speaks to active management – companies can be relevant and irrelevant very quickly.”
Mike says the results for the second quarter of this year show the death of software has been very overrated. He says we saw a strong set of results from these companies, citing database platform MongoDB as an example of a company that rose 37% after reporting – simply because people really thought the company was struggling.
He says: “I don’t think this is a rising-tide-lifts-all-boats environment in software – I think you need to be very choosy. This is not a shotgun approach, it is a rifle approach. We’ve made minor adjustments but we are still overweight software. If you just think about the value software provides – we are living in a digital world and I don’t care if you are B2B or B2C, you need to meet your customer where they are (and that is digital).
“Every company wants to decrease friction with respect to their sales cycle. Any global business wants less friction because that means quicker sales cycles, which in turn means faster growth. There is not a business in the world that does not want better customer services and to be as efficient as possible. Those three things are what software does and it makes it compelling.”
Here more about these themes directly from Mike Seidenberg on our recent Investing on the go podcast.
Portfolio activity
One of the changes the team has made on the back of the tariff uncertainty has been to add to more names with defensive cashflows. A good example is software and technology provider SAP as well as the likes of Spotify and Netflix.
Mike says: “Netflix traditionally produce a lot of their own content from overseas, so they have not appeared to land in the Trump line of fire yet. They may need to re-shore production from Canada, Europe and other places in a certain scenario, but given they are nimble and have an international presence they feel a safe bet.”
ATT has seen its international exposure rise amid the uncertainty, but not to a huge degree. Mike says the reality is that most technology companies are based in the US, despite having international exposure. He adds that one of the additional challenges of looking internationally is companies are typically more scarce, which means they normally have to pay a higher P/E multiple.
One area they have delved back into is China – where exposure has gone from zero to 3%, with Alibaba and Tencent both added to the portfolio.
He says: “Policy has got better, the economy has got better. When the current regime came in, China was almost 13% of the trust – at that point we left China in a big way and it really helped the trust. I like the fact there is tonnes of intellectual capital there. We want to own the highest quality names there (Alibaba/Tencent) because the regime makes me nervous, so I want to own those marquee businesses so there is little chance the regime takes it off the face of the Earth, as they have done with other businesses and sectors.”
As mentioned, ATT has a traditional overweight to mid-caps, but Mike acknowledges this environment is geared towards mega-caps, despite some of their mid-cap holdings gaining real traction.
He says: “In a healthier IT environment, where spending is easier, the mid and large-cap tend to do better as their products are less established and any type of discretionary spend tends to benefit them. We are not there today and that is why more capital is being used to flank some of the mega-caps.”
Portfolio contributors and detractors
Some of the biggest contributors to performance in 2025 have included the likes of Palantir Technology, an American software company that provides data analysis platforms for government and commercial clients. Its main products include Gotham, used by intelligence agencies for operational planning; Foundry, a platform for managing and analysing data to improve decision-making; and Apollo, a service for continuous software updates. Mike says he recently took some profits there due to valuations, despite the business model remaining strong.
Others include the likes of Cloudfare, a next generation development platform, as well as Spotify and Netflix. Another is Robinhood Markets, which Mike describes as a next generation asset manager aimed at younger people who are looking to save money. He says: “It has secular growth potential and a strong underlying client base, which is likely to drive revenue and earnings.”
In terms of negatives, we have already discussed the impact of the underweight to NVIDIA versus the benchmark (10.5% vs. 15.5%) and the rationale behind this move. Others include Lam Research Corporation, a global supplier of wafer fabrication equipment and services for the semiconductor industry. Mike says the firm has probably oversold to China which has led to some pain for the business. Others include Monolithic Power, a business ATT has held for a number of years and one Mike has full confidence in over the longer term.
In addition to the likes of Robinhood Markets, Alibaba and Tencent, other new names added in 2025 include chipmaker Advanced Micro Devices, which was added in an effort to increase the semiconductor and AI-related exposure in the portfolio and given expectations that the company is increasing its competitive position in the AI-chip market. ATT also bought shares of Intuit, a tax, business and financial management software provider, given its attractive growth vs. valuation mix, favourable execution across product lines and durable demand drivers, plus its introduction of AI-related features which will give back time to its time-constrained customers.
Sales included the cloud-based security monitoring and analytics platform Datadog, given the team’s lower conviction in the stock. Other sales included relationship management software provider HubSpot, due to a less attractive growth vs. valuation mix relative to peers, and exited security platform Palo Alto Networks, as the team felt there were better opportunities in the cybersecurity space. Positions in social networking platform Reddit and software intelligence maker Dynatrace were also sold, with Mike citing the need to improve the risk vs. reward characteristics of the portfolio.
Performance
ATT has doubled its NAV returns over the past five years (103.9%), compared with a 116% return for the Dow Jones World Technology Index (sterling adjusted, total return). The share price has risen 83.5%**. It is important to note that performance has held up incredibly well given ATT typically has an underweight to the dominant mega-caps driving performance in the sector (and global markets in general).

As already discussed, Mike and the team have a mid-cap bias, although mega-caps have been topped up more recently to account for their current strength. The long-term philosophy remains unchanged in terms of recycling mega-cap money into mid and large-caps and that is proven by long-term performance, with ATT returning a stellar 766% return in share price (824% NAV) over the past decade*.
What else do investors need to know?
ATT is currently trading at an 11.2% discount, compared with an average discount of 9% over the past five years***. ATT does not use any gearing. The board of ATT actively repurchase shares to manage a persistent discount to NAV. The trust has a policy of buying back shares when the discount is consistently over 7% and conducts these repurchases on a regular basis.
ATT has an ongoing charge of 0.64%. The management and contract fees are tiered: 0.8% on market cap up to £400 million, 0.6% on £400m to £1bn, and 0.5% on £1bn plus. There is also a performance fee of 10% of outperformance against the benchmark, capped at 1.75% of the company’s average daily net asset value.
Outlook
ATT is an excellent diversifier for anyone wanting exposure to technology as a theme, but is wary of the exponential growth within the mega-caps. Mike and the team have proven long-term that they can find innovative, leading-edge companies – creating shareholder value.
They have also been able to manage risk effectively by building a diversified portfolio, which should offer some stability in what can be a volatile sector. With the management team based in close proximity to Silicon Valley, the team are also in the thick of the action, giving them an edge over their peers. They also have great access to management teams, suppliers and competitors to gauge a strong overview of various sub-themes within the technology sector.
In a market where uncertainty and volatility could lead to greater dispersion in returns, this could be an ideal active portfolio to consider.
*Source: AIC, 17 October 2025
**Source: Allianz Technology Trust
***Source: FE fundinfo, 16 October 2025