Final Results
16/03/2026 07:00
RNS Number : 6727W Allianz Technology Trust PLC 16 March 2026 13 March 2026 ALLIANZ TECHNOLOGY TRUST PLC LEI: 549300OMDPMJU23SSH75 Final Results for the year ended 31 December 2025 The following comprises extracts from the Company's Annual Financial Report (AFR) for the period ended 31 December 2025. The full AFR is available to be viewed on or downloaded from the Company's website at www.allianztechnologytrust.com. Copies will be posted to shareholders shortly. For further information please contact: Tim Scholefield, Chairman Telephone: 020 3246 7000 Stephanie Carbonneil, Head of Investment Trusts Telephone: 020 3246 7539 MANAGEMENT REPORT Highlights: · ATT has once again delivered a strong positive absolute return in its Net Asset Value of +24.7%. Our benchmark index, the Dow Jones World Technology Index, rose +20.0%, so in relative terms this represents an extremely strong 4.7 percentage point outperformance for the Trust. · As the discount also narrowed slightly over the year, the share price total return for shareholders was marginally higher at +25.8%. · ATT's differentiated approach has provided strong compound outperformance versus the index from its actively managed portfolio. Chair's Statement A good year, despite the geopolitical backdrop 2025 saw its fair share of volatility resulting from the febrile global geopolitical backdrop and sporadic bouts of nervousness surrounding the valuations of the listed technology companies the Trust invests in. Nonetheless, it has been a positive year for us, and one that I am happy to be reporting on. Performance I am pleased to report that ATT has once again delivered a strong positive absolute return in its Net Asset Value of +24.7%. Our benchmark index, the Dow Jones World Technology Index, rose +20.0%, so in relative terms this represents an extremely strong 4.7 percentage point outperformance for the Trust. As the discount also narrowed slightly over the year, the share price total return for shareholders was marginally higher at +25.8%. Regarding drivers, it is interesting to note the strong impact of our differentiated strategy - not holding the benchmark equivalent weights in the very largest companies and instead looking for opportunities further down the market capitalisation spectrum. This year we can no longer say the benchmark was wholly driven by 'Mag 7' exceptionalism, though those companies still featured. Nvidia and Alphabet were the largest contributors to the benchmark's performance, with Microsoft third and Meta rounding out the top ten contributors. Apple however was lacklustre, yielding a barely positive return. Our outperformance came from holding higher weights in companies such as Micron Technology, Lam Research, Celestica, Robinhood Markets and Amphenol. We hold well over benchmark weights in the former two which respectively focus on computer memory and semiconductor manufacturing equipment production. The last three - involved in high-tech electronics manufacturing, electronic trading and specialist interconnectors - are not part of our benchmark but are highly exposed to strong secular technology growth themes. Of the Magnificent 7 companies in the benchmark, the maths can become interesting. As noted, Nvidia was the largest contributor to the benchmark return, its winning contribution the result of a dominant 14%-plus index weight and its respectable 30% return. We maintained slightly less than a 10% weight during the year. In contrast, Micron Technologies returned around +216% but only constitutes around 0.6% of the index (we owned a 2.5% position on average). In longer 'compound' performance terms, 2025's +24.7% return comes on the back of 2024's +35.6 % and 2023's +46.4%, a solid +106.7% return over the past three financial years, representing a +2.7 percentage point outperformance of the benchmark index over that time. Of course, those with a longer memory will point out 2022's -33.6%. The point I make is twofold - the volatility associated with the tech sector can be painful, but the rewards when they do come have also been substantial. This is the balance one has to remember when investing in tech. Discount and buybacks Given these impressive returns, it can be difficult to rationalise the persistent discount to Net Asset Value in the price at which the Company's shares have been trading. The wider environment for investment trusts may have a bearing - overall levels of discounts across all trusts remain generally elevated when compared to history. For tech companies a degree of caution over the sector's short term prospects following a period of very strong performance may also have provided a headwind in 2025. We hope that shareholders will remember that our Investment Manager's primary focus is to extract the best returns over the long term from this tremendously exciting sector while reducing exposure to risk, which should help investors worry less about short term newsflow and focus more on their investment returns compounding over time. Beyond sales and marketing efforts to encourage demand, the other mechanism by which the Board can exert some influence on the discount is by buying back the Company's shares. The Board's policy in respect of buybacks is unchanged. We would consider buying back shares when the discount is consistently over 7% and we judge it appropriate to do so given the prevailing market backdrop. Over the year to 31 December 2025, a total of 26,088,876 shares were bought back, for an aggregate value of £124,993,000. The Company traded at an average discount of 9.8% over the period. We ended 2024 at a discount of 8.6% and were pleased to end 2025 at a slightly lower discount of 7.8%. Since the end of the financial year and up to 11 March 2026 the Company bought back a further 4,025,723 shares for an aggregate value of £21,364,000. It may be easy to suppose that buybacks should be used to initiate a 'zero discount policy' as some investment trusts have chosen to do. We view them differently, as a tool to help reduce discount volatility. Moving too far beyond this however risks overly interfering with the permanent capital pool that the Investment Manager works with - a key benefit of investment trusts over open-ended vehicles over the long term. We believe that a balanced approach with that long term view on shareholder value is the right one to take. To that end, at the forthcoming AGM, the Board will once again seek authority to buy back up to 14.99% of the shares in issue. Investment Company of the Year Awards I'm delighted to report that the strong three-year performance noted above, along with recognition of our differentiated strategy and ongoing drive for consistent shareholder returns, was once again recognised by ATT being named '2025 Investment Company of the Year' in the 'Technology' category at Investment Week's prestigious awards in November 2025. The geopolitical backdrop For much of 2025 there was considerable uncertainty. The macroeconomic environment was generally supportive and the year started with some positivity remaining from the inauguration of President Trump on the basis that he had been fairly pro-business in his first term. The 'mic-drop' moment came on 2 April with 'Liberation Day', when tariffs on imported goods were proposed against most countries outside of the US. Markets reacted strongly. Tech was by no means immune, with multi-jurisdictional supply chains woven into the very fabric of the industry. However, the nervousness was short lived. US politics hasn't been the only driver of geopolitical pressure. War still rages in Ukraine. Israel and Palestine moved towards peace but it remains fragile. Against this background though, as a key enabler of modern life, demand for technology continues to accelerate and technology companies have carried on innovating, growing and ultimately justifying their valuations. The benefits of a differentiated approach With the dominance of the largest tech companies over recent periods, it has been seemingly 'easy' to achieve performance with lower-cost investment vehicles, like passive funds and ETFs. But that misses the point. ATT has an approach of focusing lower down the capitalisation scale, in the mid- and large-cap segments. Over time, despite mega-cap tech stocks having dominated, ATT's differentiated approach has provided strong compound outperformance versus the index from its actively managed portfolio. Risk (particularly concentration risk) can be somewhat esoteric, especially when those very large stocks do not suffer any apparent issues - but the point is sound. Our approach is to provide shareholders with a diversified portfolio where risks are spread and not excessively concentrated in a small number of dominant holdings. We therefore avoid the concentration risk that results from a passive approach to portfolio construction which slavishly replicates index weightings. Moreover, sudden or excessive falls in company share prices can create attractive entry points for bottom-up active investors with a longer term investment horizon - a case of opportunity emerging out of market overreaction. The mechanism to mitigate concentration risk as far as possible (while looking at the smaller up-and-coming companies) is a key element we provide for shareholders. We feel ATT's record of active fund management speaks for itself and demonstrates both the benefits of our differentiated approach and the advantages of an investment team located in the San Francisco Bay Area. Why San Francisco, the Bay Area, Silicon Valley? Our Lead Portfolio Manager, Mike Seidenberg, believes there is something special about a 'whites of the eyes' conversation, and not just a video call. The advantage lies in the physicality of the access - he values the chance to see the office, some elements of operations and access to line managers as well as senior management - as it gives him a better feel for how an organisation is truly operating. Being able to experience, and therefore assess, the corporate culture at first hand is a significant advantage. Our manager, having come from industry himself, really values that insight. On top of that, the unique scale of the Bay Area ecosystem allows the investment team to assimilate new tech themes and identify beneficiaries rapidly and effectively. AI and beyond My statement doesn't need a lengthy section dedicated to AI. We have covered the topic in detail previously, and Mike Seidenberg gives more of his team's own thoughts on the topic in the report on pages 7 to 9. Suffice it to say that there has been no material challenge to the narrative around AI - it is truly transformational, not just within the tech sector, but for pretty much everyone and everything. It is speed of adoption, ethics and monetisation which are valid areas of debate. Parallels are often drawn to the rise of the internet - the companies leading the charge at the time weren't necessarily the longer-term winners and that could be the same with AI. The skill for investors will be making money from this incredible trend while maintaining a balanced perspective on risk. Your Investment Manager's focus is not to get carried away on the back of market groupthink, but to look for opportunities with genuine appreciation potential for our shareholders. So, what comes after AI? Although the technology has been around for some time, we now seem to be closer than ever to the emergence of quantum computing as a practical technology. Where conventional computers process information using bits, quantum computers use qubits, which can hold both "on" and "off" states simultaneously. This property allows them to explore multiple solution pathways in parallel, making them extraordinarily powerful for solving problems involving quantum physics, such as molecular interactions. This capability is already attracting serious attention from leading pharmaceutical companies, though the opportunity extends well beyond pharmaceuticals, into materials science and other fields. While fully functioning quantum computers could still be some time away, the pace of innovation is rapid. Another technology which is not new but penetrating ever quicker into mature applications is blockchain. While the technology has attracted investor attention for some time through cryptocurrency speculation, the more significant opportunity lies in its emerging role as core enterprise infrastructure. After years of pilot projects, blockchain has reached a maturity level where it is now being deployed for specific, high-value business problems - particularly those involving multiple parties who need to share data without fully 'trusting' each other. Stablecoins are transforming cross-border payments, asset managers are beginning to 'tokenise' treasury products, Walmart is tracking products on blockchain, and Maersk and Citibank have automated trade finance guarantees using smart contracts. The costs of running your Company Your Board has maintained close attention to the costs of running the Company to ensure they are competitive. The Company's Ongoing Charges Figure (OCF) has fallen marginally to 0.62% (2024: 0.64%). I am pleased to report that the Company continues to have the lowest OCF within its AIC peer group (Technology & Technology Innovation). The OCF excludes any performance fee due to the Investment Manager. Despite outperforming the index in the year there remains brought forward underperformance to offset. As a consequence no performance fee was earned. The board reviewed the performance fee calculation in the year, and considering the increased size of the Company, negotiated a reduction in the percentage performance fee cap from 1.75% to 1.25% of the average Net Asset Value. This took effect from 1 January 2026. Continuation vote In accordance with our Articles of Association, shareholders will be asked to vote on the continuation of the Trust at this year's AGM. In view of ATT's excellent long-term performance record and our confidence in the Investment Manager to be able to maintain a portfolio giving differentiated exposure to transformative technologies well into the future, the Board strongly encourages you to vote in favour of the resolution. Annual General Meeting (AGM) arrangements This year's AGM will be held on 23 April 2026 at 2.30pm. As with previous years, the AGM will be a hybrid meeting, meaning shareholders can either attend physically or online. We strongly encourage all shareholders to submit their votes by the deadline of 20 April 2026. Those shareholders attending virtually will be able to view the AGM and submit questions electronically. The Board encourages shareholders to attend the AGM if possible. A presentation by the lead portfolio manager will be made at the start of the meeting. For those unable to attend, a recording of the AGM will be posted to the Company's website. The Board looks forward to welcoming shareholders to this year's event. Outlook One thing is certain - we are very likely to see ongoing volatility. Firstly, it is likely within the sector as investors continue to get over-excited and then over-fearful in turn. An AI 'Bubble' has been called multiple times this past year, and the market has reacted accordingly. There are two camps emerging - those that believe we are seeing valuations starting to overheat, and those that see enough evidence of AI-driven revenue or margin improvement to validate higher valuations today. You can read our Investment Manager's detailed view later in this report, but suffice it to say here that while the onward path is unlikely to be monotonically upward, with times of investor retreat very likely, Mike and his team do not view the current scenario as bubble territory. Volatility will also likely be driven from outside the sector by an increasingly fraught geopolitical environment. A new world order appears to be emerging, and disagreements and posturing are becoming increasingly uncomfortable, and could spill into wider global conflict with profound market implications. Any volatility can be both good and bad for investors. Certainly, it never feels comfortable while experiencing it live - but for the seasoned, dedicated and attuned investor, therein lies opportunity. One of the key skills of our Investment Manager is to navigate the complexity of the macro environment as it melds itself with the day-to-day business of tech firms. Your Trust provides a vehicle to give access to this exciting sector, while providing the reassurance of a highly experienced, investment management team. Tech firms will carry on innovating, growing and selling products and services and demand for those products and services will continue to grow. The signals remain strong for improving revenue growth and the macroeconomic environment looks like it should be supportive. We will continue to ensure the Trust follows its primary objective of generating long-term returns for shareholders from skilful selection of individual businesses in this tremendously exciting sector. Tim Scholefield Chairman 13 March 2026 Portfolio Manager's Report How did the technology sector perform in 2025? Overall, it has been another strong year for technology. Our benchmark, the DJ World Technology index, rose 20.0% and the Company delivered 24.7%. Our returns came from a range of sectors, as technology leadership broadened out from the dominant US mega-caps. We saw particular strength in semiconductors and some hardware names, while the growth of artificial intelligence remained a strong and persistent theme. Nevertheless, this positive result disguised plenty of intra-year volatility. The year definitely had some gut wrenching moments, which seems to be a feature of most years! For example, 'Liberation Day' caused a severe sell-off across global stock markets. The announcement of tariffs made for an unpredictable period for the technology sector. Many technology companies have large global franchises and were therefore on the front line for the tariff impact. It took time for deals to be struck and for share prices to recover. As long-term investors with the goal of owning strong technology franchises in all types of markets, we have built a diversified, resilient portfolio which we hope will weather these short-term storms. Over many cycles, we have learnt that 'doing nothing' is often the best course of action, and the Liberation Day sell-off was no different, when only minor changes to the portfolio were made. These are noisy times and we need to be careful not to respond to every White House announcement. In some cases, we added to our favourite positions when we saw prices of these companies retreat and actively engaged with management in order to understand any potential implications for their business. Our proximity to many of the companies in Silicon Valley allowed us to meet with a number of companies during a tumultuous period for the stocks. We found that, in many cases, the outlook for companies hadn't changed. There have been growing fears of a 'bubble' in Artificial Intelligence (AI). Are you worried? AI is the most important sectoral theme to emerge in the last few years and it is a significant focus for the Company. We are always striving to make good risk/reward decisions for our shareholders, and to do that we have a clear framework around valuation. For every company, we analyse long-term growth rate, profitability and potential. Comparisons have been made with the dotcom boom. In our view, the biggest difference is that in the dotcom boom there were a lot of weak businesses that didn't solve difficult problems. In contrast, many AI companies are solving large, real world problems. Equally, while the first-movers on the internet didn't necessarily stay the distance, the hyperscalers have built far greater dominance over the AI ecosystem and have longevity. As with every technological revolution, not all will make it, which is why active, disciplined management is so important. Public market valuations remain high, but - for the most part - are not excessive and not nearly as high as at the peak of the dotcom euphoria. We do see signs of exuberance in some of the private equity valuations and are watching capital spending carefully. Companies recognise that it could be an existential threat if they get AI wrong - they risk becoming obsolete. This could prompt some potential capital misallocation, but a rigorous bottom-up approach ensures that we can avoid any excesses. What happened to technology company earnings during the year? Earnings have exceeded expectations for many technology companies, particularly those associated with AI. This has created a high bar and investors have been ruthless where companies have disappointed. In general, companies such as Alphabet have been on the right side, while companies such as Meta and Microsoft have struggled to impress. Nevertheless, it is worth noting that technology continues to contribute a substantial share of S&P 500 earnings - as much as two-thirds for 2025. Earnings strength has broadened out beyond the hyperscalers and into the AI ecosystem and this has been an increasing area of interest for the Company. The Company has around one-third in semiconductors. Why has this been an area of interest? ATT aims to offer investors a diversified technology portfolio. Our goal is to look at the entire ecosystem and find compelling investments across a wide spectrum of companies. In previous secular themes, we attempted to uncover investment opportunities which sit behind the obvious theme leaders, such as the companies supplying the infrastructure to the AI leaders, and our goal is the same here. This resulted in a robust investment pool in the semiconductor ecosystem. The semiconductor sector made up around a third of the portfolio (32.5%) over the year, and delivered an average return of 45.6%. The names we chose within that sector, including Micron, Broadcom and Advanced Micro Devices (AMD), were important for overall returns and we outpaced the benchmark in the semiconductor sector. Micron contributed more than any other single stock to our performance over the year. Elsewhere within the AI ecosystem, we have invested in groups such as Celestica, which is a product manufacturing and supply chain services group that is benefiting from the growth of data centres. We are also invested in Amphenol, which makes the connectors that go inside data centres and is seeing strong growth in demand. Memory was also an important area in 2025 as supply shortages hit, with LAM Research a significant contributor over the year. New ideas added to the portfolio in 2025? Robinhood is an interesting new idea in the portfolio, contributing 1 percentage point to relative performance in 2025. The trading platform is widely used among younger generations for their long-term savings. Its strategy is highly differentiated and uses elements of 'gamification' and' nudge theory' to encourage savings and investment. Young people have a different way of thinking about their savings and expect to be able to manage them in a different way. Robinhood has tapped into that market very well and built a loyal customer base. Has the Magnificent Seven relinquished its grip on market leadership? It was a more complex year for the Magnificent Seven companies, with real concerns over the level of spending and whether they would see returns on their commitments. Microsoft, Meta, Alphabet and Amazon are expected to spend a combined $350 billion this year. Investors increasingly need evidence that those commitments are paying off. In 2025, Alphabet convinced investors that its capital allocation was proving effective, while the jury was out for Meta and Apple. Nvidia's share price was very strong for much of the year and its earnings managed to outpace even the high expectations set for it by analysts. Its third quarter results showed revenues growing at 62% year on year. All the data on AI spending continues to support strong growth for Nvidia and we are comfortable with our position in the stock. The strong performance of the mega caps had been a headwind for active technology strategies such as ours. In a diversified, actively managed portfolio, it would not be prudent to hold Nvidia at index weight or above. And so, even though it is our largest holding, Nvidia did not deliver outperformance versus our benchmark. We prefer to look for large and mid cap stocks where we believe we can add more value. The mega cap headwind became a tailwind in 2025, as investors recognised that there is a range of options to invest in AI growth and started to turn their attention elsewhere. Did your market cap positioning help relative performance over the year? Yes. The portfolio held 47.5% in the mega caps (i.e. those companies worth more than $1 trillion). This was around 12% below the benchmark and this underweight contributed to performance over the year. Our weighting in mid-caps, at around 5% of the portfolio, was a strong contributor, particularly AMD, Amphenol and CrowdStrike. Palantir was another significant contributor to returns in 2025. What drove share price performance there? Palantir sat at the intersection between two major trends in 2025: defence and AI. Defence was a popular sector as European powers committed to raising defence spending, both in support of Ukraine and in response to the US backing away from its prior defence commitments. The MSCI World Aerospace and Defence sector rose 52.5% over the year, more than double the return of the MSCI World. Palantir is also at the forefront of AI. It has the most demonstrable real-time AI deployment. Its customers are large government agencies, who use Palantir products for a variety of use cases. Palantir is moving into the corporate realm and focusing on building its enterprise presence, which should be fruitful. They have some of the brightest and best software engineers and have done a phenomenal job of growing their business with year-on-year sales growing at over 55% in 2025. Did higher defence spending also boost cybersecurity? Cybersecurity is a crucial area of spending for companies and governments. The adversaries have become so good and so sophisticated. In 2025, we saw production disrupted at Japanese beer maker Asahi and at UK car group Jaguar Land Rover. They were among a whole host of companies, businesses and governments to experience attacks. Cybersecurity's relevance extends beyond defence spending and is more about the world we're living in - a digital world requires spending on cybersecurity. Companies in the sector had a reasonable year, with CyberArk and CrowdStrike marginally ahead of the benchmark. We had a 7 percentage point overweight at the start of the year, reducing to 5 percentage point by the end. We still find this segment a good hunting ground for ideas. Software was a more difficult area in 2025. Why was that? Software is still an important part of the portfolio, at 25.8%. However, it had a tough year. The S&P 500 Software Index was down over 2025, falling 1% , which was a significant relative underperformance compared to the rest of the technology sector. The fear is that many software names will be taken out by AI, with IT buyers looking to AI agents to perform tasks currently performed by software. Shares in companies such as Salesforce, ServiceNow and Adobe have all struggled. We believe it will remain a difficult area. Semiconductors are growing at 30%+, which makes an allocation to software, where growth rates are a more anaemic 10-12%, hard to justify. The market tends to reward technology companies for growth. Nevertheless, there is a question over whether they have gotten too cheap - the decrease in value has been extraordinary. We are finding some interesting opportunities. MongoDB, for example, has been hit hard over the year. It is a good example of a company that hasn't been able to prove to investors that it is part of the deployment of AI workloads, but we see value there. Elsewhere, we continue to look at software companies in detail, visit their premises and pore over the data. We need to be sure that not owning them at these valuations is the right position. As Asian vendors pick up more of the AI supply chain and China expands its technology ecosystem, are you seeing more opportunities outside the US? While the companies we hold draw revenues from across the world, they tend to be listed in the US and have their centre of operations there. It is true that some of the excitement in technology this year has come from outside the US. Investors have started to wake up to the broader AI ecosystem, much of which is located outside the US. We have participated through companies such as TSMC, where we had a 4.3% average weighting over the year. Some of the Korean memory companies have also been strong, but we have participated through Micron. Ultimately, we are based in the US, at the heart of Silicon Valley. The US technology ecosystem is unparalleled, and it is still home to significant global innovation. We want to leverage our strengths for the benefit our investors. How optimistic are you looking in 2026? We are cautiously optimistic. We continue to see good opportunities for technology to be a bigger part of people's lives. This has been a recurring theme since the first day I started working for the Company. We balance this with a nuanced understanding on the spending environment. Innovation continues to support growth for technology companies, particularly around AI. These technology shifts come once every 12-15 years and when they occur, they tend to be very powerful. People will always worry about a bubble, but when a secular change emerges, it tends to create significant value over the cycle. It is our job to uncover this value and to look beyond the obvious opportunities to other parts of the market. 2026 has potential to be a robust year for IPOs with a number of high-profile companies waiting in the wings. Obviously, a number of factors need to line up to execute these IPOs and we look forward to learning more about these exciting businesses. We are alert to the risks of over-valuation, portfolio concentration and also the risks emerging from a volatile macroeconomic backdrop. We are constantly testing our hypotheses and striving to understand the risk and reward for every company. For the time being companies appear to be weathering the macroeconomic volatility well. It has not been a great environment, but in the aftermath of the pandemic, companies underspent on technology and there is still pent-up demand. We expect that companies will need to show value in order for purchase orders to increase but this usually allows the leaders to take market share and for also-rans to fade away. It is important not to let macroeconomic or geopolitical factors become a distraction. There is always noise, and even more so in recent years. Our stock selection has to be governed by our deep dive on the stocks, rather than by the latest missive from the White House. Occasionally, macroeconomic factors will change the business model, but not as often as markets imagine. It is important to remember technology remains at the forefront of creating differentiation for many companies across numerous vertical markets and thus our long-term enthusiasm endures. Mike Seidenberg Lead Portfolio Manager Voya Investment Management Co. LLC 13 March 2026 Viability Statement In accordance with the Corporate Governance provisions the Company is required to make a forward-looking (longer-term) Viability Statement. In order to do this the Board has considered the appetite for a technology investment trust against the current market backdrop, and has formally assessed the prospects for the Company over a period of five years. The Board believes that the period of five years is appropriate and is in line with the five year continuation vote. The next continuation vote will be put to shareholders at the AGM in 2026. In order to assess the prospects for the Company the Board has considered: · The investment objective and strategy taking into account recent, past and potential performance against both the benchmark, other indices of note and peers; · The financial position of the Company, which does not currently utilise gearing in any form but does maintain a portfolio of, in the main, non-income bearing investments; · The liquidity of the portfolio and the ability to liquidate the portfolio on the failure of a continuation vote; · The macro economic conditions and geopolitical events; · The ever increasing level of technology adopted by both individuals and corporations alike; · The inherent risks in such technology both in terms of speed of advancement; and · The principal risks faced by the Company as outlined below. The Board is fully aware that the world of technology is constantly evolving and growing and could potentially look very different in five years. However, based on the results of the formal assessment, through regular updates from the AIFM and the Investment Manager, the Board believes it is reasonable to expect that the Company will continue in operation and meet its liabilities for the period of five years under this review. Investment Controls and Monitoring The Board in conjunction with the AIFM and the Investment Manager has put in place a schedule of investment controls and restrictions within which investment decisions are made. These controls include limits on the size and type of investment and are monitored on a constant basis. They are formally signed off by the AIFM and the Investment Manager every month and are reviewed by the Board at every meeting. Principal and Emerging Risks and Uncertainties The principal risks identified by the Board are set out in the table on page 15 of the annual financial report, together with information about the actions taken to mitigate these risks. A more detailed version of this table in the form of a Risk Map and Controls document is reviewed in full and updated by the Audit & Risk Committee and Board at least twice per year. Individual risks, including emerging risks and threats to reputation, are considered by the Board in further detail depending on the market situation and a high-level review of all known risks faced by the Company is considered at every Board meeting. The principal risks and uncertainties faced by the Company relate to the nature of its objectives and strategy as an investment company and the operations of its third party service providers.
| Description | Mitigation |
| Investment strategy and performance risk The Company's NAV may be adversely affected by the Investment Manager's inappropriate allocation of funds to particular sub-sectors of the technology market and/or to the selection of individual stocks that fail to perform satisfactorily, leading to poor investment performance in absolute terms and/or against the benchmark. | The Board has established a schedule of investment controls which is monitored monthly and reviewed at each Board meeting. The Investment Manager has responsibility for sectoral weighting and for individual stock picking, having taken due account of Investment Objectives and Controls that are agreed with the Board from time to time and regularly reviewed. These seek, inter alia, to ensure that the portfolio is diversified and that its risk profile is appropriate. |
| Technology sector risk The technology sector is characterised by rapid change. New and disruptive technologies, including AI, can place competitive pressures on established companies and business models, and technology stocks may experience greater price volatility than securities in some slower changing market sectors. | The Board reviews investment performance, including a detailed attribution analysis comparing performance against the benchmark, at each Board meeting. At such meetings, the Investment Manager reports on major developments and changes in technology market sectors and also highlights issues relating to individual securities. The Board has continued to review the risks and opportunities presented by AI via discussion with subject matter experts and discussion with the Investment Manager at each Board meeting. |
| Cyber risk The Company may be at risk of cyber attacks which may result in the loss of sensitive information or disruption to the business. | The operations of the Company are carried out by third party service providers. All service providers report to the Board on operational issues including cyber risks and the controls in place to capture potential attacks. See Operational Risk below. |
| Market risk The Company's NAV may be adversely affected by a general decline in the valuation of listed securities and/or adverse market sentiment towards the technology sector in particular. Although the Company has a portfolio that is diversified by company size, sub-sector and geography, its principal focus is on companies with high growth potential in the mid-size ranges of capitalisation. The shares of these companies may be perceived as being at the higher end of the risk spectrum, leading to a lack of interest in the Company's shares in some market conditions. The Company's portfolio may be affected by changes to central banks' interest rates. Higher interest rates have typically had an adverse impact on growth stocks. Market sentiment may quickly deteriorate in the face of geopolitical events and effects on the macro-economic environment. | The Board, the AIFM and the Investment Manager would monitor the progress of any unexpected events and may consider hedging, gearing or other strategies to respond to particular market conditions. The AIFM and the Investment Manager maintain regular contact with shareholders to discuss performance and expectations and to convey the belief of the Board and the Investment Manager that superior returns can be generated from investment in carefully selected companies that are well managed, financially strong and focused on those segments of the technology market where disruptive change is occurring. The Board, the AIFM and the Investment Manager would monitor the progress of the unexpected events very closely and initiate appropriate responses where possible. |
| Currency risk A high proportion of the Company's assets is likely to be held in securities that are denominated in US Dollars, whilst its accounts are maintained in Sterling. Movements in foreign exchange rates affect the performance of the Investment Portfolio and create a risk for shareholders. | The Board monitors currency movements and determines hedging policies as appropriate. The Board does not currently seek to hedge this foreign currency risk. |
| Financial and liquidity risk The financial risks to the Company and the controls in place to manage these risks are disclosed in detail in Note 13 beginning on page 62 of the annual financial report. | Financial and liquidity reports are provided to and considered by the Board on a regular basis. |
| Operational risk The Company may be impacted by disruption to or the failure of the systems and processes utilised by the AIFM and the Investment Manager or other third party service providers. This encompasses disruption or failure caused by cybercrime, fraud and errors and covers dealing, trade processing, administrative services, financial and other operational functions. | The Board receives regular reports from the AIFM, the Investment Manager and third parties on internal controls highlighting areas of exception, including reports on monitoring visits carried out by the Depositary on behalf of the Company. The Board has further considered the risk of cyber-attacks and fraud and has received reports and assurance regarding the controls in place and details of whistleblowing procedures. |
| Key individual risk The Company could suffer disruption to operations as a consequence of loss of key individuals e.g. the lead portfolio manager. | Succession plans are in place for the Board. The lead portfolio manager is supported by Erik Swords, portfolio manager, and an experienced team of technology investors. Cover is available for core members of the relevant teams of the AIFM. |
| Emerging Risk - Artificial General Intelligence Artificial General Intelligence (AGI) could introduce unintended consequences, geopolitical and economic disruption, security vulnerabilities and, in extreme scenarios, existential risk. | The Board will continue to monitor AI evolution through through discussions with the Investment Manager and industry experts. Changes to, and the implementation of new regulations, laws and governance of AI will be monitored by the Board as the landscape develops. The Board will also monitor its third party service providers in respect of the controls and regulation of AI. |
| Investment | Sector1 | Sub Sector1 | Country2 | Valuation £000 | % of Portfolio |
| NVIDIA | Semiconductors & Semiconductor Equipment | Semiconductors | United States | 209,907 | 10.5 |
| Alphabet | Interactive Media & Services | Interactive Media & Services | United States | 191,099 | 9.5 |
| Microsoft | Software | Systems Software | United States | 163,681 | 8.2 |
| Apple | Technology, Hardware Storage & Peripherals | Technology, Hardware Storage & Peripherals | United States | 146,299 | 7.3 |
| Broadcom | Semiconductors & Semiconductor Equipment | Semiconductors | United States | 145,895 | 7.3 |
| Taiwan Semiconductor | Semiconductors & Semiconductor Equipment | Semiconductors | Taiwan | 112,039 | 5.6 |
| Micron Technology | Semiconductors & Semiconductor Equipment | Semiconductors | United States | 93,991 | 4.7 |
| Lam Research | Semiconductors & Semiconductor Equipment | Semiconductor Materials & Equipment | United States | 73,328 | 3.6 |
| Meta Platforms | Interactive Media & Services | Interactive Media & Services | United States | 60,307 | 3.0 |
| KLA | Semiconductors & Semiconductor Equipment | Semiconductor Equipment | United States | 53,183 | 2.6 |
| Top Ten Investments | 1,249,729 | 62.3 | |||
| Monolithic Power Systems | Semiconductors & Semiconductor Equipment | Semiconductors | United States | 50,897 | 2.5 |
| Amphenol | Electronic Equipment Instruments & Components | Electronic Components | United States | 46,792 | 2.3 |
| Snowflake | IT Services | Internet Services & Infrastructure | United States | 41,718 | 2.1 |
| MongoDB | IT Services | Internet Services & Infrastructure | United States | 37,778 | 1.9 |
| Shopify | IT Services | Internet Services & Infrastructure | Canada | 35,451 | 1.8 |
| Advanced Micro Devices | Semiconductors & Semiconductor Equipment | Semiconductors | United States | 34,569 | 1.7 |
| Analog Devices | Semiconductors & Semiconductor Equipment | Semiconductors | United States | 29,797 | 1.5 |
| Arista Networks | Communications Equipment | Communications Equipment | United States | 29,169 | 1.5 |
| CrowdStrike | Software | Systems Software | United States | 27,319 | 1.4 |
| Cloudflare | IT Services | Internet Services & Infrastructure | United States | 26,626 | 1.3 |
| Top Twenty Investments | 1,609,845 | 80.3 | |||
| Western Digital | Technology, Hardware Storage & Peripherals | Technology, Hardware Storage & Peripherals | United States | 23,993 | 1.2 |
| Celestica | Electronic Equipment Instruments & Components | Electronic Manufacturing Services | Canada | 23,389 | 1.2 |
| Robinhood Markets | Capital Markets | Investment Banking & Brokerage | United States | 22,559 | 1.1 |
| Tencent | Interactive Media & Services | Interactive Media & Services | Cayman Islands | 21,814 | 1.1 |
| Alibaba | Broadline Retail | Broadline Retail | Cayman Islands | 19,974 | 1.0 |
| Palantir Technologies | Software | Application Software | United States | 18,831 | 0.9 |
| Samsara | Software | Application Software | United States | 18,289 | 0.9 |
| ServiceNow | Software | Systems Software | United States | 17,666 | 0.9 |
| Palo Alto Networks | Software | Systems Software | United States | 17,654 | 0.9 |
| Rubrik | Software | Systems Software | United States | 17,220 | 0.9 |
| Top Thirty Investments | 1,811,234 | 90.4 | |||
| Zscaler | Software | Systems Software | United States | 16,281 | 0.8 |
| Spotify Technology | Entertainment | Movies & Entertainment | Luxembourg | 15,259 | 0.8 |
| Klaviyo | Software | Application Software | United States | 14,903 | 0.7 |
| Datadog | Software | Application Software | United States | 14,467 | 0.7 |
| Seagate Technology | Technology, Hardware Storage & Peripherals | Technology, Hardware Storage & Peripherals | Ireland | 14,178 | 0.7 |
| Sandisk | Technology, Hardware Storage & Peripherals | Technology, Hardware Storage & Peripherals | United States | 14,064 | 0.7 |
| Elastic NV | Software | Application Software | Netherlands | 12,982 | 0.6 |
| Lumentum | Communications Equipment | Communications Equipment | United States | 12,382 | 0.6 |
| Coherent | Electronic Equipment Instruments & Components | Electronic Equipment Instruments & Components | United States | 12,102 | 0.6 |
| Rocket Lab | Aerospace & Defense | Aerospace & Defense | United States | 10,594 | 0.5 |
| Top Forty Investments | 1,948,446 | 97.1 | |||
| Interactive Media & Services | Interactive Media & Services | United States | 10,173 | 0.5 | |
| CyberArk | Software | Systems Software | Israel | 9,018 | 0.4 |
| Bloom Energy | Electrical Equipment | Electrical Equipment | United States | 8,444 | 0.4 |
| Okta | IT Services | Internet Services & Infrastructure | United States | 7,381 | 0.4 |
| Sailpoint | Software | Application Software | United States | 7,109 | 0.4 |
| Oracle | Software | Systems Software | United States | 6,420 | 0.3 |
| Coinbase | Capital Markets | Financial Exchanges & Data | United States | 5,598 | 0.3 |
| IonQ | Technology, Hardware Storage & Peripherals | Technology, Hardware Storage & Peripherals | United States | 4,008 | 0.2 |
| Figma | Software | Software | United States | 24 | 0.0 |
| Total Investments | 2,006,621 | 100.0 |
| 2025 Revenue £'000s | 2025 Capital £'000s | 2025 Total Return £'000s | 2024 Revenue £'000s | 2024 Capital £'000s | 2024 Total Return £'000s | |
| Gains on investments held at fair value through profit or loss | - | 413,324 | 413,324 | - | 462,854 | 462,854 |
| Exchange gains (losses) on currency balances | (17) | (2,202) | (2,219) | (8) | 1,521 | 1,513 |
| Income | 8,332 | - | 8,332 | 6,571 | - | 6,571 |
| Investment management fee and performance fee | (10,159) | - | (10,159) | (8,816) | - | (8,816) |
| Administration expenses | (1,129) | - | (1,129) | (1,165) | - | (1,165) |
| Profit (loss) before finance costs and taxation | (2,973) | 411,122 | 408,149 | (3,418) | 464,375 | 460,957 |
| Taxation | (1,168) | - | (1,168) | (891) | - | (891) |
| Profit (loss) on ordinary activities attributable to Ordinary shareholders | (4,141) | 411,122 | 406,981 | (4,309) | 464,375 | 460,066 |
| Earnings (loss) per Ordinary share (basic and diluted) | (1.11p) | 110.50p | 109.39p | (1.12p) | 120.68p | 119.56p |
| 2025 £'000s | 2024 £'000s | |
| Non current assets | ||
| Investments held at fair value through profit or loss | 2,006,621 | 1,715,543 |
| Current assets | ||
| Other receivables | 811 | 511 |
| Cash and cash equivalents | 25,121 | 33,763 |
| 25,932 | 34,274 | |
| Current liabilities | ||
| Other payables | (3,698) | (2,950) |
| Net current assets | 22,234 | 31,324 |
| Total net assets | 2,028,855 | 1,746,867 |
| Capital and reserves | ||
| Called up share capital | 10,719 | 10,719 |
| Share premium account | 334,191 | 334,191 |
| Capital redemption reserve | 1,021 | 1,021 |
| Capital reserve | 1,728,808 | 1,442,679 |
| Revenue reserve | (45,884) | (41,743) |
| Shareholders' funds - equity | 2,028,855 | 1,746,867 |
| Net asset value per Ordinary share | 571.7p | 458.6p |
| Called up Share Capital £'000s | Share Premium Account £'000s | Capital Redemption Reserve £'000s | Capital Reserve £'000s | Revenue Reserve £'000s | Total £'000s | |
| Net assets at 1 January 2024 | 10,719 | 334,191 | 1,021 | 1,010,278 | (37,434) | 1,318,775 |
| Revenue loss | - | - | - | - | (4,309) | (4,309) |
| Shares repurchased into treasury during the year | - | - | - | (31,974) | - | (31,974) |
| Capital profit | - | - | - | 464,375 | - | 464,375 |
| Net assets at 31 December 2024 | 10,719 | 334,191 | 1,021 | 1,442,679 | (41,743) | 1,746,867 |
| Net assets at 1 January 2025 | 10,719 | 334,191 | 1,021 | 1,442,679 | (41,743) | 1,746,867 |
| Revenue loss | - | - | - | - | (4,141) | (4,141) |
| Shares repurchased into treasury during the year | - | - | - | (124,993) | - | (124,993) |
| Capital profit | - | - | - | 411,122 | - | 411,122 |
| Net assets at 31 December 2025 | 10,719 | 334,191 | 1,021 | 1,728,808 | (45,884) | 2,028,855 |