Our annual report summary series delivers a condensed analysis of a selected investment trust's annual report, including details of the trust's aim, investment style, portfolio focuses, gearing policy, charges and performance.
Allianz Technology Trust (LSE: ATT) targets long-term capital growth through investments in listed technology companies on a worldwide basis. Its report and accounts for the year to 30 November 2016 shows shareholders’ assets of £216.7 million.
Walter Price has been manager of ATT since April 2007. He heads an experienced, four-strong, San Francisco-based global technology team. They are supported by more than 10 global sector analysts, nine of whom focus purely on technology companies, as well as by Allianz Global Investors’ ‘grassroots’ team of researchers. The team favours companies using technology to gain a competitive advantage, particularly those addressing major growth trends with innovations that replace existing technologies or that radically change the way products and services are supplied to customers.
The sterling-adjusted Dow Jones World Technology index is the trust’s benchmark, but management of the trust’s concentrated portfolio is benchmark-aware but not benchmark-driven. At end-November, 30 companies accounted for nearly 80 per cent of the portfolio. Exposure to mega- and large-capitalisation companies was significantly underweight at 40.6 per cent of the portfolio, whereas high-growth medium-sized companies accounted for a significantly overweight 40.9 per cent. Smaller companies were even more overweight at 16 per cent. Gearing was nil, and ongoing charges had been trimmed to 1 per cent.
Over one year NAV and share price total returns were 23.8 per cent and 26.4 per cent respectively. The majority of the gain was due to the fall in sterling, and the trust’s performance lagged the 31.7 per cent return from its benchmark. However over five and 10 years it remained ahead of its index and most of its peers, and it has been performing strongly again in 2017. No dividends have been paid since AGI took charge in 2007.
The board is prepared to buy back shares when the discount exceeds 7 per cent and to reissue them at a narrower discount. Over 100,000 shares were bought back last year and none were reissued.
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