13th Mar 2024 11:05
(Alliance News) - Allianz Technology Trust PLC on Wednesday boasted a "strong absolute performance" in 2023 despite slightly underperforming its benchmark, as the investor has an "underweight position" in some of the biggest names in the world of technology.
The tech sector-focused investor said its net asset value per share increased by 46% to 338.2 pence at the December 31 year-end, from 231.0p 12 months earlier.
Shares in Allianz Tech were up 1.3% to 349.32 pence in London on Wednesday morning.
Despite a backdrop of robust inflation and high interest rates, Allianz Tech's portfolio benefitted from its significant exposure to both the artificial intelligence and cybersecurity sectors, which performed well over the year.
However, the trust underperformed its benchmark, the Dow Jones World Technology Index, by 1.8%.
"The strength of the 'magnificent seven' and their dominance in the index made it difficult to beat. We continued to hold below index weights in these stocks to avoid concentration risk in the portfolio," Allianz Tech added.
The 'magnificent seven' stocks it made reference to are Alphabet Inc, Amazon.com Inc, Apple Inc, Meta Platforms Inc, Microsoft Corp, Nvidia Corp, and Tesla Inc. Chipmaker Nvidia in particular has been at the heart of an AI boom.
Allianz Tech added: "Our portfolio manager focuses on the mid- and large-cap segments, reflecting our belief that companies at an earlier stage of their development provide better opportunities for long-term earnings growth."
Its 2023 outturn was a notable improvement from 2022, when NAV per share plunged by 34%, however.
Like previous years, no dividend was proposed, in line with its "stated objective of achieving long-term capital growth".
Looking ahead, Allianz Tech added: "It is relatively difficult to make predictions for the year ahead in such an uncertain world. However, most indicators are suggesting a pivot in interest rates could well be on the cards which would certainly be positive for growth stocks, including many technology stocks.
"Geopolitics remain a source of uncertainty. Whilst the fortunes of individual companies are often insulated from the direct impacts of world events, heightened uncertainty will impact on sentiment in general and affect factors such as consumer confidence."
By Elijah Dale, Alliance News reporter
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