Portfolio & Performance

ISIN GB0003390720
SEDOL 0339072

Share Price is the price of a single ordinary share, as determined by the stock market. The share price above is the mid-market price at market close.
Share Price
1335.0p


Net Asset Value (NAV) per Share is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. The NAV figure above is based on the fair/market value of the company’s long-term debt and preference shares (known as debt at market value). This allows for the valuation of long-term debt and preference shares at fair value or current market price, rather than at final repayment value (known as debt at par).
NAV per Share
1367.1p


Premium/Discount. Since investment company shares are traded on a stock market, the share price that you get may be higher or lower than the NAV. The difference is known as a premium or discount.
Premium/-Discount
-2.4%


Dividend Yield is calculated using the latest full year dividend divided by the current share price. Allianz Technology Trust does not currently pay a dividend.
Dividend Yield
0.0%

Data source DataStream and Allianz Global Investors as at 11.12.2018 based on market close mid price.

Portfolio

The data shown is not constant over time and the allocation may change in the future. Totals may not sum to 100.0% due to rounding. All data source Allianz Global Investors unless otherwise stated.

Top 10 Holdings (%)

Amazon
6.3
Alphabet - A shares
5.7
Apple
4.8
Square
4.2
NetApp
4.1
Microsoft
3.7
Paycom Software
2.9
Okta
2.9
Salesforce.com
2.8
ServiceNow
2.5

Data as of 31.10.2018

Geographic Breakdown (%)

North America 88.2
Europe ex UK 4.9
UK 3.7
Far East & Pacific 0.1
Cash 3.1

Data as of 31.10.2018

Sector Breakdown (%)

Technology
73.5
Consumer Services
8.8
Industrials
6.6
Consumer Goods
4.6
Financials
3.0
Utilities
0.4
Cash
3.1

Data as of 31.10.2018

Market Cap Breakdown (%)

Over US $100bn 29.4
US $10bn to 100bn 32.2
US $1bn to 10bn 34.9
Under US $1bn 0.4
Cash 3.1

Data as of 31.10.2018

Fund Manager Comments

Portfolio Overview

Allianz Technology Trust’s NAV fell by 11.3% in October, underperforming the Dow Jones World Technology Index return of -7.6%. Global markets fell sharply during the month, with technology stocks hit particularly hard. In the case of ATT, stock selection detracted from its relative performance against the benchmark.

Our position in electric vehicle maker, Tesla, was the top contributor during the period. Shares have been more volatile recently with questions regarding the financial stability of the company escalating while ramping up production of its Model 3 car. We believe Tesla made significant steps in addressing those concerns in its latest quarterly update, demonstrating better-than-expected profitability on Model 3 and generating attractive and healthy cash flows. Another area of concern has been sustainability of demand, and we believe Model 3 sales to non-US countries could offset potential pressures in the future.

Our underweight position in NVIDIA was also a top contributor. NVIDIA’s Graphics Processing Units (GPUs) are used in nearly all deep learning/machine learning applications for the purpose of training neural networks. Shares fell in sympathy with other semiconductor stocks through some of the market volatility. Losses accelerated when a competitor reported earnings and indicated that the market for GPUs used in crypto-currency mining applications had weakened more than expected. We remain constructive on NVIDIA shares as the long-term growth trajectory is intact driven by increasing penetration of GPUs in the AI training market and strength in other end markets. While we like the long term opportunity for NVIDIA, we reduced our overall position size in the stock and semiconductors space due to concerns around inventories and the ongoing trade issues with China.

Other top active contributors included not owning IBM, an underweight position in Tencent, and an overweight position in MongoDB.

Our position in Square was the top relative detractor over the month. The company develops business management software for small and medium-sized businesses (SMB) and monetises many of these products through transaction processing. During the month, Square announced that Sarah Friar (CFO) would be stepping down to take on a CEO role at Nextdoor (a hyper-local social platform). Friar had been the face of the company to investors, and her departure was unexpected and disappointing. Jack Dorsey (CEO) indicated in a memo that her departure was amicable and driven by her ambition to be a CEO. Square’s culture of experimentation and delegation has created a deep bench of talent. Square continues to execute well against its goals of moving to larger sellers, expanding internationally, and building e-commerce tools.

Our position in Amazon.com was the top detractor during the period. The company’s shares were caught in the investor angst that persisted throughout the month. Amazon’s third quarter revenue and fourth quarter guidance also fell short of expectations, which further exacerbated the share price declines. While revenues lagged, the company meaningfully increased profitability demonstrating the strength of the underlying cash flow generation of the consolidated entity. We expect there is some conservatism in management’s outlook for the fourth quarter and remain constructive on the business trends, especially the emerging profitability profile.

Other top active detractors included an underweight position in Apple and overweight positions in Advanced Micro Devices (AMD) and GrubHub.

Market Outlook

Our view is that technology remains well-positioned to remain a major driver of market returns. The combination of solid global economic growth, strong corporate earnings, domestic tax cuts in the US, and the ongoing digital transformation among corporations should continue to drive growth in IT spending. Feedback from our discussions with company management teams, as well as management surveys from multiple sources, indicate that companies across the economy are turning to technology solutions to increase revenue, improve productivity, and enhance operating efficiency. While the largest technology companies today will inevitably struggle to grow as rapidly in the future, the broad technology sector should continue to see attractive growth in the future.

Despite high valuations for some cloud and internet companies, we continue to see massive addressable markets much larger than the revenue today. However, we have consolidated our exposure to these areas in select companies having the most compelling solutions and whose business models demonstrate a discernible path to deliver strong earnings and cash flow growth over the next few years.

Artificial intelligence (AI) is also becoming a significant trend. From consumer goods, such as the Amazon Echo, to autonomous driving, practical applications of AI are emerging. We expect AI will increasingly be used to make our lives more convenient.

Walter Price 09 November 2018
...companies across the economy are turning to technology solutions to increase revenue, improve productivity, and enhance operating efficiency.

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

Performance

Performance (%)

Select period:

    Cumulative Returns (%)

    3M 6M 1Y 3Y 5Y
    Share Price -6.6 3.5 16.7 128.7 158.9
    NAV -3.3 8.6 14.5 117.3 165.0
    Benchmark -3.5 7.0 7.3 94.5 159.2

    Source: Thomson Reuters DataStream, percentage growth, mid to mid, total return to 31.10.2018.1

    Discrete 12 Month Returns (%)

    2018 2017 2016 2015 2014
    Share Price 16.7 42.7 37.4 9.0 3.8
    NAV 14.5 39.5 36.0 8.3 12.6
    Benchmark 7.3 29.0 40.5 10.1 21.0

    Source: Thomson Reuters DataStream, percentage growth, mid to mid, total return to 31.10.2018.1

    1Past performance is not a reliable indicator of future returns. You should not make any assumptions on the future on the basis of performance information. The value of an investment and the income from it can fall as well as rise as a result of market fluctuations and you may not get back the amount originally invested.

    Copyright 2018 © DataStream, a Thomson Reuters company. All rights reserved. DataStream shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

    © Allianz Global Investors GmbH 2018, Registered Office: Frankfurt am Main, Register: HRB 9340, Local court: Frankfurt am Main. All Rights Reserved. Allianz Technology Trust PLC is incorporated 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.