Allianz Technology Trust PLC is a technology-focused investment trust managed by an experienced portfolio management team. The trust has a high conviction concentrated portfolio and has been recognized as the Investment Week Investment Company of the Year in the Specialist category from 2017 to 2021.
In October 2023, the trust's NAV Total Return was -2.46%, compared to the Dow Jones World Technology Index return of -0.84%. The monthly relative performance was influenced by positive selections in interactive media, communications equipment, and e-commerce retailers. However, challenges in the semiconductor sector and conservative stock selection in software and IT services industries offset some of the gains.
Amazon.com Inc. was the top contributor to performance in October, with higher revenue and market share gains. The trust trimmed its position in Amazon.com Inc. to redeploy capital into other investment opportunities, but it remains a core holding. Arista Networks, a provider of cloud networking solutions, also contributed to results with strong earnings and guidance. Other top contributors included cybersecurity providers CrowdStrike Holdings and Palo Alto Networks, as well as enterprise IT management software provider ServiceNow, Inc.
ON Semiconductor Corp., a supplier of semiconductors for data and power management, was the largest detractor in October due to a muted outlook for electric vehicles. The trust reduced its weight in ON Semiconductor Corp. and favored other companies with better near-term catalysts. Microsoft Corp., which has a below-benchmark allocation, offset results with positive performance driven by a favorable earnings announcement. Other detractors included Shopify, Tesla, and HubSpot.
In terms of the market outlook, there is volatility due to rising bond yields and geopolitical tensions. The trust believes that upcoming quarterly earnings results will be important in creating separation among stocks. Despite the challenges, the trust remains optimistic about the secular growth opportunities and benefits from technology-led companies. They expect technology stocks to continue benefiting from long-term tailwinds and anticipate accelerating demand for innovative solutions such as cloud, software-as-a-service, and cybersecurity. The trust is excited about the advancement of AI and believes that the technology sector will provide attractive growth opportunities in the coming years.