Allianz Technology Trust PLC, a technology-focused investment trust, has provided an update on its portfolio performance for November 2023. The trust's NAV Total Return was 10.95% for the month, outperforming the Dow Jones World Technology Index return of 8.23%. The outperformance was driven by bottom-up stock selection in IT services and software, while short-term selections in media and financial services had a modest negative impact on performance.
The top contributors to performance in November were Shopify, Inc. and CrowdStrike Holdings, Inc. Shopify rebounded significantly following short-term underperformance, thanks to strong earnings results and growth opportunities. CrowdStrike reported an upside earnings surprise and demonstrated growing market share in enterprise security. Other top contributors included MercadoLibre, Inc., Datadog Inc, and Cisco Systems, Inc.
On the other hand, Trade Desk, Inc. and Salesforce, Inc. were the largest detractors from performance. Trade Desk's share price moderated slightly, and lower forecast guidance offset the upside earnings surprise. The trust partially trimmed its position in the stock due to a slightly more opaque near-term outlook. Salesforce's performance was impacted by concerns of mixed guidance and execution uncertainty, leading to a full exit of the position. However, the company's share price rallied at the end of the month.
In terms of market outlook, equity market sentiment improved in November, particularly for technology and related segments. Investors anticipate central banks pausing or lowering interest rates as inflation and other metrics moderate. The trust remains optimistic about opportunities within technology, including artificial intelligence, machine learning, cyber security, digital assets, and mobility. They anticipate robust earnings growth in 2024 and believe valuations are justified at current levels.
Overall, Allianz Technology Trust PLC's portfolio managers have demonstrated their expertise in technology investing, delivering strong performance in November. The trust continues to focus on high conviction, concentrated positions in technology companies with strong growth potential.