Access the some of the world’s most transformative and profitable companies with this London-listed trust
Thursday 16 Jan 2020 Author: Steven Frazer

The world’s turned a few times since Walter Price first started picking technology stocks and few fund managers know the changes, challenges and implications of the vast technological transition that is taking place across the globe than the senior fund manager of the Allianz Technology Trust (ATT).

That makes this investment trust an excellent solution for retail investors who want a way in to the exciting profit potential that tech offers, but are scared off by the complexity and high ratings of many tech companies.

The trust has beaten its benchmark in both net asset value (NAV) and share price terms over one, three and five years, and the stock has increased nearly 250% in price since 2014.

Price and his team like to be close to the action which allows the trust to take a bottom-up, hands-on approach to stock selection, able to visit foundries or research and development sites, and speak directly to senior management frequently. That’s a big help since retail investors simply don’t get access to the top brass of the biggest and best tech companies in Silicon Valley, China or elsewhere.

Today innovation in technology is transforming virtually every industry. From electric cars loaded with electronics to online shopping, how we consume entertainment using cloud computing to providing solutions to keep us safe from crooks and other internet threats.

WHY THIS TRUST STANDS OUT

One of the ways Allianz Technology Trust stands apart from other tech funds is that it has scope to drift further beyond its benchmark index than most. This means it can combine larger or smaller positions in some of the world’s largest technology companies with outsized stakes in faster growing names, although it could also make the share price more volatile.

There are plenty of familiar tech names in the portfolio (Microsoft is its largest position right now), including Facebook, Apple, Tesla and Mastercard, while the likes of online payroll and human resources supplier Paycom Software, advanced testing business Teradyne and Ring Central, the digital communications firm may be less known in the UK.

The discount to NAV has narrowed in 2020 reflecting the market’s current appetite for technology investment options.

The average 3.4% discount tends to reflect the sometimes volatile nature of tech stocks, which is typically penalised by investors. But we believe there is scope for this trend to change as investors switch to companies most capable of delivering sustainable growth through any economic slowdown.

That could see the share price attain a decent premium to NAV over the next 12 to 18 months. The stock has previously traded close to a 6% premium to NAV. With very reasonable fees (ongoing charges are 0.48%), the Allianz Technology Trust is a very attractive option for UK investors looking for well-run tech exposure.

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