Performance, Commentary & Portfolio

Fund Manager’s Review

Allianz Technology Trust’s Net Asset Value (NAV) total return was 8.20% in July, compared to the Dow Jones World Technology Index return of 8% in GBP.

Global equities rose modestly in July, bolstered by progress in U.S. trade talks for most of the period. A positive start to the second-quarter earnings season also improved investor sentiment, although gains were capped after President Trump stepped up his campaign against U.S. Federal Reserve Chair Jay Powell, raising concerns about the central bank’s independence, as well as by ongoing geopolitical tensions.

Monthly performance modestly outpaced the benchmark thanks to bottom-up stock selection, which were counterbalanced by industry allocation impacts. Results were led by positive selections in electronic equipment, IT services, and a below- benchmark weight in technology hardware, while more conservative stock picking in software and exposure to entertainment stocks detracted from monthly results.

Contributors

Our active overweight in chipmaker Advanced Micro Devices, Inc., led relative gains for the month as the stock advanced thanks to overall artificial intelligence (AI) related demand as well as news that the company could resume sales of some AI chips in China, following U.S. government assurances that shipments would get approved, a dramatic reversal from the Trump administration’s earlier stance.

An off-benchmark position in Celestica Inc., a maker of components for hyperscale data centres, enterprise, and industrials markets, aided results as the stock rallied following favourable earnings results, led by the company’s cloud-computing segment and overall demand for AI-related applications.

Our avoidance of legacy IT services and consulting provider International Business Machines Corp., contributed to relative performance as shares were lower following weaker-than-expected earnings results for the company’s software segment, with the sell-side increasingly bearish on their future prospects, amid concerns on valuation and moderating growth.

The avoidance of semiconductor equipment maker ASML Holding N.V. and our active underweight allocation to iPhone and personal computer maker Apple Inc., also contributed to results given monthly relative underperformance in each stock.

Detractors

Our structural below-benchmark allocation, given our max position size limitations, to semiconductor maker NVIDIA Corp., offset results as the stock advanced thanks to continued AI-related demand and news the company could sell select chips in China. The stock remained the largest holding in the portfolio thanks to its leadership position, strong management team and favourable investor sentiment.

An active overweight allocation to memory chip maker Micron Technology Inc., detracted from performance as shares declined amid concerns of oversupply in high-bandwidth memory and traditional DRAM markets, suggesting downward pressure on pricing and margins.

Our active overweight in commercial free music and audio streaming solutions provider Spotify Technology S.A., detracted from performance as shares declined following earnings results which came in below expectations due in part to higher-than- expected expenses related to employee compensation.

Our off-benchmark exposure to subscription entertainment provider Netflix, Inc., and below-benchmark weight to enterprise infrastructure software maker Oracle Corp. also detracted from relative performance in July.

New buys and sells 

Turnover in July was undertaken at a lower-than-typical level as we felt the portfolio was already well-positioned from a risk versus reward perspective, particularly as we enter quarterly earnings season. We newly purchased shares of Figma Inc., at the end of the month, as part of the company’s initial public offering (IPO) given their leadership position in collaborative functionality within the product design ecosystem, which has the potential to drive outsized growth.

We also added to shares of the aforementioned Oracle Corp., which offers a portfolio of enterprise software, cloud infrastructure, and integrated security exposure, due in part to outsized growth potential in the company’s cloud AI business. There were no new portfolio sales during the month.

Market Outlook 

The long-term outlook for technology remains exciting and we are amidst a platform shift which tends to occur every 10–15 years with the emergence of AI causing businesses to rethink many of their processes. Like previous shifts, there will be exuberance followed by worry but these secular themes (Cybersecurity, Cloud, and Digital for example) drive spending on technology, and businesses do not want to be left behind. For the remainder of the year, we anticipate a more normalised spending environment post the first half of the year where we saw proposed tariffs impact some of the results and put many businesses on alert.

Our expectation is that the risk to reward within technology stocks may remain favourable , in light of underlying fundamental factors, with macroeconomic uncertainty recently notching lower, and interest rate cuts, which are anticipated in the coming months, which will likely help further improve industry prospects. The upcoming quarterly earnings cycle is likely to drive investor sentiment incrementally, particularly in terms of forward guidance from companies. Although near-term uncertainty may preside, we maintain a positive mid-to-long-term outlook for equity markets and we continue to believe market leaders who execute well are likely to be rewarded regardless of the macroeconomic backdrop.

Our focus remains on building the portfolio from a bottom-up perspective with a macro- overview. Technology remains a key enabler across almost every vertical industry and we will continue to seek stocks which solve difficult problems and can be long-term outperformers. Despite shortterm periods of higher volatility, earnings growth ultimately drives stock prices over the long term, and in our view, we are still early in the spending trend supporting this dynamic segment.

Mike Seidenberg
12 August 2025

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

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