REG - Allianz Tech Trust - Half-year Report
08/08/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240808:nRSH6354Za&default-theme=true
RNS Number : 6354Z Allianz Technology Trust PLC 08 August 2024
ALLIANZ TECHNOLOGY TRUST PLC
LEI: 549300OMDPMJU23SSH75
ALLIANZ TECHNOLOGY TRUST PLC
HALF-YEARLY FINANCIAL REPORT
For the six months ended 30 June 2024
HIGHLIGHTS
· Net Asset Value total return of 28.0% and a share price return of
30.6%, outperforming the Company's benchmark index which returned 27.0% over
the same period.
· Performance driven by stock selection, exposure to semiconductor
value chain and market capitalisation differentiation from benchmark.
30 June 31 December 2023 %
2024 Change
Net Asset Value per Ordinary share 432.8p 338.2p +28.0
Ordinary share price 396.5p 303.5p +30.6
Dow Jones World Technology Index (sterling adjusted, total return)
3,448.0 2,715.0 +27.0
Shareholders' funds £1,662.0m £1,318.8m +26.0
Discount of Ordinary share price to Net Asset Value 8.4% 10.3%
Interim Management Report
Chairman's Statement
Disparate market drivers
The market environment and the drivers of sentiment remained mixed over the
period, though definitely biased more to the positive, pushing markets
upwards. Global markets gained consistently with the exception of a small step
back in the first half of April. Notably, we have seen consumer price
inflation trending towards central bank target ranges, giving rise to the
prospect of easier monetary conditions later in the year.
It is also the year of elections around the globe and therefore (more than
usual) politics is at the forefront of national agendas. Some elections are
more high profile than others, but billions of people (almost half the world's
population) will go to the polls across the globe in 2024. In the UK where ATT
is domiciled, early indications suggest the agenda of the new Labour
Government, voted in shortly after the period end, is focused on economic
growth. We will watch this develop with interest. In the US, where ATT's
investment managers are based, and where the largest proportion of the
portfolio is domiciled, the situation is still unfolding. We have already seen
the conviction of former President Trump as well as an assassination attempt
on his life. Though Trump is generally regarded as being more pro-business,
somewhat akin to the UK the expectation is that the perceived impact of any
result would be priced in ahead of time making the actual event fairly neutral
for markets.
Beyond 'day-to-day' politics, geopolitics has also continued to provide an
unsettling backdrop for markets. Russia's invasion of Ukraine and the ongoing
conflict are nearly two and a half years old. Tensions, terrorism and
large-scale military action in the Middle East are newer, but still protracted
rather than swift, limited actions, and no less unsettling than Ukraine. While
these ongoing conflicts may sometimes fade in the news, beyond the sadness of
the physical toll on humanity and infrastructure, their impact on the world
economy remains tangible.
Solid technology market performance
The technology sector was buoyed by continued excitement surrounding the
potential impact of Artificial Intelligence (AI) with the so called
'Magnificent Seven' remaining the centre of market attention. The chipmaker
Nvidia, a holding within the portfolio, proved to be the standout amongst
these largest stocks. Seemingly unassailable from the perspective of its
position as the bedrock semiconductor provider for AI, it briefly became the
world's most valuable company in June, being the latest of the technology
giants to top a $3tn market valuation - for context, there are only a handful
of nations whose entire Gross Domestic Product (GDP) is greater than that
amount.
As detailed in the Portfolio Manager's Report, performance of technology
stocks was mixed across sectors and geographies with the aforementioned
largest stocks dominant and a narrow segment of companies considered the key
beneficiaries of the AI theme pushing strongly ahead. Semiconductors were the
main beneficiary, up by almost 60% over the period. Interactive media and
services were also up by 30%. Software returned a more muted 14% and
technology hardware 11%. IT services was down 5% in the period due to ongoing
macroeconomic uncertainty.
Portfolio performance
It is pleasing to report a Net Asset Value total return of 28.0% for the six
months, a strong absolute performance and an outperformance of one percentage
point compared to our benchmark, the Dow Jones World Technology Index. The
share price return was 30.6%, slightly ahead of the NAV return, as during the
period the discount narrowed marginally from 10.3% as at 31 December 2023 to
8.4% as at 30 June 2024. A commentary on the main determinants of performance
is provided in the Portfolio Manager's Report which follows my comments.
The AI debate
AI continues to dominate not only the technology industry narrative, but also
headlines in general. There is no doubt that it truly is a new frontier - one
that brings not only promise, but also the uncertainty of uncharted, 'never
seen before' technologies. The 'promise' element has captivated many and led
to something of a feeding frenzy - investors keen to get in on the ground
floor of a theme that is seen as having world-changing potential and possibly
almost unimaginable growth potential. That frenzy translates into the risk of
elevated valuations for companies involved in the space - both directly as
creators and implementers of the technology, but also the enablers - the
companies providing the building blocks such as the necessary semiconductor
chips. The question then becomes, have things gone too far? Proponents will be
unable to accept an ill word against the burgeoning technology. Naysayers will
call 'bubble' and hark back to the 'dot-com' era. The truth of course lies
somewhere in between the two extremes and underscores the need for the type of
careful assessment of a company's fundamental characteristics which is at the
heart of our Portfolio Manager's investment process.
The UK and technology
We were asked about opportunities for investment in UK technology companies at
our AGM in April. The UK market in general has been unloved for some time -
many bemoan this as being due to a lack of technology firms listed on the
exchange and a predominance of 'older industries', particularly when compared
to the US. There is some truth in that, but it does not mean the UK is devoid
of technology expertise and drive, in fact quite the opposite is true. A
substantial proportion of the UK technology sector is at an early stage of
development and hence not traded publicly. It is also the case that companies
which have listed on the UK stock exchange are often snapped up by larger,
overseas acquirers. For example, Darktrace - a British cyber security company
headquartered in Cambridge, which we added to the portfolio in March of this
year - was subsequently the subject of a bid from a US private equity firm.
Whilst such a takeover can be considered a pleasing validation of UK expertise
(Darktrace's technology was referred to as 'cutting edge' by the bidder), of
course it is also disappointing to 'lose' such stocks from the domestic
market.
Discount/Buybacks
Over the period our discount to NAV remained elevated, particularly in the
context of a longer-term picture where we have traded closer to par and often
at a small premium when demand for technology stocks was high.
The Board monitored the discount very closely during the period under review,
concluding that the discount largely reflected macroeconomic and interest rate
uncertainty. It is pleasing to be able to note however that the discount
started to narrow slightly towards the end of the period (reaching 8.4% on the
last day). Since the period end the discount has been largely stable, although
in early August it widened during a sudden period of global market volatility.
Our policy in respect of buying back shares remains unchanged. Currently we
would consider buying back shares during periods where the discount is
consistently over 7% and it is felt appropriate to do so given the prevailing
market backdrop. Over the period 5,934,691 shares were bought back at an
average discount of 11.5%. Since the period end on 30 June 2024, no further
shares have been bought back. All shares repurchased are held in treasury
rather than cancelled so that they may be reissued if sufficient demand
arises.
Consumer Duty
The Board has worked with Allianz Global Investors, UK Limited ('AllianzGI
UK'), our AIFM, to ensure all obligations under the FCA's new Consumer Duty
regulations have been appropriately considered and applied to the Company. All
communications including the website, factsheets and other published
documentation, have been reviewed to ensure they are appropriate for
consumers. A 'value assessment' has also been undertaken and it was concluded
that the Company provides fair value. The value assessment is made available
to distributors such as investment platforms and wealth managers to inform
their own due diligence.
Annual General Meeting (AGM)
It was a pleasure to meet many shareholders at the Company's AGM on 24 April
2024. The Board once again put in place arrangements for shareholders to
attend the AGM electronically, as well as being able to ask questions. All
resolutions were passed. A recording of the AGM, including a presentation from
the lead portfolio manager, Mike Seidenberg, can be found on the Company's
website.
We would like to also remind shareholders that the key elements of this year's
Annual Financial Report were made available in an updated online format (the
'Annual Financial Report - full') at tinyurl.com/attafr23.
Outlook
The shorter-term outlook for the technology sector is, as always, difficult to
predict with any great precision and we can safely assume that monetary
policy, geopolitics and election outcomes will be significant determinants of
market direction over the next six to twelve months. While it is the case that
inflation is finally within or approaching central bank targets, and hence
that there are reasonable grounds for anticipating that monetary conditions
will ease over the next twelve months, there is the potential for
disappointment over the timing and magnitude of interest rate reductions. The
valuation of 'growth' sectors such as technology is particularly sensitive to
changes in interest rate expectations which in turn gives rise to a risk of
heightened near term volatility. Nevertheless, we remain excited by the
technology sector's long-term potential and confident that secular themes such
as the development of AI, cyber security and the continued move from legacy IT
infrastructure to the cloud will ultimately reward patient investors with a
focus on the mid- and large-cap segments of the technology sector.
Principal risks and uncertainties for the remainder of the financial year
The principal risks and uncertainties facing the Company are broadly unchanged
from those described in the Annual Financial Report for the year ended 31
December 2023. These are set out in the Strategic Report on pages 15 to 16 of
that report, together with commentary on the Board's approach to mitigating
the risks and uncertainties. Given the global macroeconomic and geopolitical
backdrop, market risk remains front of mind and the Board, AIFM and Investment
Manager continue to monitor the situation carefully.
The Board performs a review of the principal risks at every meeting to ensure
that the risk assessment is current and relevant, adjusting mitigating factors
and procedures as appropriate.
Keeping in touch
Shareholders are reminded that the Company's website
www.allianztechnologytrust.com is the 'go-to' destination for the very latest
news, views and broadcast content relating to the Company. We continue to
offer an ongoing email communications programme distributing monthly
factsheets, insights and other occasional Company updates to all those who opt
in to receive them. If you would enjoy receiving these targeted
communications, you can sign up easily via the Company's website.
Going concern
The Directors believe that it is appropriate to adopt the going concern basis
in preparing the financial statements as the assets of the Company consist
mainly of securities that are readily realisable, and the Company's assets are
significantly greater than its liabilities. The Directors have considered the
Company's investment objective and capital structure. The Directors have also
considered the risks and consequences of the geopolitical and macro-economic
events on the operational aspects of the Company. The Directors believe that
the Company has adequate financial resources to continue in operational
existence for twelve months after approval of these financial statements.
The Company is subject to a continuation vote of the Shareholders every five
years. The last continuation vote was put to Shareholders at the AGM in 2021.
Related party transactions
Note 15 of the Company's 2023 Annual Financial Report gives details of related
party transactions and transactions with the AIFM and Investment Manager. The
basis for these has not changed during the six months under review. This
report is available on the Company's website at www.allianztechnologytrust.com
Responsibility statement
The Directors confirm to the best of their knowledge that:
- the condensed set of financial statements contained within the
half-yearly financial report has been prepared in accordance with FRS 102 and
FRS 104, as set out in Note 1, and the Accounting Standards Board's Statement:
'Half-Yearly Financial Reports';
- the interim management report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.7 R, of important
events that have occurred during the first six months of the financial year,
their impact on the condensed set of financial statements, and a description
of the principal risks and uncertainties for the remaining six months of the
financial year; and
- the interim management report includes a fair review of the
information concerning related party transactions as required by Disclosure
and Transparency Rule 4.2.8 R. The half-yearly financial report was approved
by the Board on 7 August 2024 and signed on its behalf by the Chairman.
Tim Scholefield
Chairman
7 August 2024
Portfolio Managers' Report
How did markets fare overall during the first half of the year?
Global stocks rallied strongly over the first half of 2024, with equity
indices in many markets reaching fresh highs. Sentiment was buoyed by solid
corporate earnings, the continued resilience of the US economy and a pick-up
in economic momentum in Europe and China. The rally was mostly driven by
outsized returns for information technology and communication services
companies.
While headline inflation rates eased, the slowdown took longer than forecast,
with US inflation, in particular, proving stickier than expected. Hopes that
the US Federal Reserve (Fed) may cut rates up to six times in 2024 were
significantly dialled back as the US economy shrugged off higher rates and
continued to power ahead. Elsewhere however, an increasing number of central
banks started to ease monetary policy. In June, Canada became the first G7
nation to cut rates, swiftly followed by the European Central Bank. In
contrast, the Bank of Japan finally exited its below-zero interest rate policy
in March, raising rates to a range of 0-0.1%.
Were there any notable differences in the performance of the different
technology sectors or market capitalisation bands during the period?
There was a wider-than-typical performance differential between key technology
areas. From an industry standpoint, semiconductors, which command roughly 30%
of the Dow Jones World Technology Index, were up more than 58% for the period
thanks to increased demand, improved supply chains and strong investor
sentiment related to artificial intelligence (AI) and other chip applications.
In addition, the industry is in better shape cycle-over-cycle with less excess
capacity leading to better pricing. Interactive media & services were also
strong contributors, advancing more than 30% amid robust gains in social
media, e-commerce and search providers. Software stocks, the second largest
industry weight in the benchmark, were bookended by a solid start and end to
the period. The middle portion though succumbed to headwinds with the sector
posting an overall return of 14%. Technology hardware stocks notched a more
modest 11%. Meanwhile, IT services were down 5% for the period as
macroeconomic uncertainty translated to a clouded near-term outlook.
In terms of market capitalisation results, there was a continued
outperformance of select mega-cap companies, led by strong momentum in NVIDIA,
which was up more than 150%, with Meta up 44%. In aggregate, mega-cap stocks
led index results, with companies greater than £200bn advancing more than 36%
on average, a further testament to the continued narrowness of the market.
Meanwhile, large cap stocks (between £30bn and £200bn) notched a more modest
14% gain, followed by mid cap stocks (£5bn to £30bn) which were up a mere
4%, whereas small cap stocks (less than £5bn) were flat for the period.
How has the Company performed during the period under review?
The Company was a beneficiary of a number of tailwinds from exposure in key
technology segments, including AI, cyber security, Internet of Things (IoT)
and digital commerce, among others, and outpaced the benchmark due to
stockpicking. For the year-to-date period through to 30 June 2024, the
Company's net assets rose by 28.0% compared to its benchmark, the Dow Jones
World Technology Index (sterling adjusted, total return) which rose by 27.0%.
Relative results were driven by bottom-up stock selection and allocation
impacts, including an above-benchmark exposure to semiconductors and active
underweight to technology hardware, which was offset by short-term selections
in IT services, where select cyber and infrastructure names are classified.
From a market capitalisation exposure perspective, our bottom-up selections in
mega-caps overcame headwinds from a relative underweight to the segment, with
bottom-up results in large caps also aiding performance. Meanwhile, our
emphasis on mid-caps detracted from relative results due to the first half
narrowness of the market.
What were the biggest positive contributors to our performance compared to the
benchmark?
Shares of Micron Technology, a leading provider of memory and related chips,
rallied thanks to upside revenue and earnings results combined with a strong
sales forecast which was buoyed by demand for AI hardware. The stock remains
attractive thanks to its leadership position in memory and storage solutions
combined with secular tailwinds, especially for cutting edge products,
particularly high-bandwidth-memory chips used in next-generation technologies.
Our active underweight allocation to iPhone and personal computer maker Apple
contributed to relative results as the company underperformed its broad
technology peers, particularly in the initial four months of the reporting
period, amid the lack of near-term catalysts alongside greater competition and
slowing growth in China. Our active underweight to legacy chip maker Intel,
which was fully exited at the beginning of February, contributed to relative
performance as shares were impacted by softer-than-expected earnings results
combined with a lacklustre forecast. The company has lagged behind several
chip rivals in terms of revenue and cutting-edge expertise. In our view, once
a company is behind in the semiconductor industry, it is difficult to catch
up.
What about the largest detractors to performance?
Our largest detractor was MongoDB, a document database provider which allows
users to store structured or unstructured data to make development of
applications more agile, which was lower following a weaker-than-expected
outlook combined with overall headwinds in software names. Our exposure to
cloud-based commerce platform Shopify offset results following a
weaker-than-expected earnings outlook, which prompted our decision to exit the
name in an effort to focus on stocks with better near-term catalysts. Shares
of Zscaler, a security-as-a-service offering via a cloud-based security
platform, also offset results as the cyber security leader posted upside
earnings results, yet was impacted by lofty expectations as the market was
anticipating higher billings guidance to sustain recent performance. We view
this as simply a case of where expectations were ahead of the stock and
continue to hold shares given the company's strong leadership position.
Where have you been finding new opportunities?
We made a handful of new buys during the period, with our largest being ASML
Holding NV, a Dutch provider of hardware, software and services to the
semiconductor industry, which was purchased in mid-February. The company has
been a beneficiary of strong order volume, driven by its leadership position
and demand for its high-end lithography machines, translating to robust sales
growth. We made the decision to add Amphenol Corporation, a designer,
manufacturer and marketer of electrical, electronic and fibre optic connectors
and interconnect systems, at the end of April given the potential for
favourable demand from AI and traditional sectors such as automotive and
aerospace. We also purchased Dell Technologies in late March as the company is
a direct beneficiary of AI and digital transformation growth, which is
translating into higher data centre, server, storage and equipment demand.
How have you funded these new investments?
Our sell decisions included exiting digital marketing and creative software
developer Adobe at the end of February, amid concerns of rising generative
artificial intelligence-related competition. We fully exited consumer and
communications equipment giant Samsung Electronics in mid-February given our
preference for companies with better business models and superior near-term
catalysts. The aforementioned Shopify Inc. was cut in mid-May following
disappointing earnings and guidance results, coupled with expectations that a
new cycle of increased spending would likely translate to weaker margins and
take time to materialise.
What is your outlook for the remainder of the year?
Technology earnings results have been constructive for most companies, but we
have seen several cross currents arise as of late as investors have concern
about the timing of benefits from some of the emerging technologies. In
addition, macro-economic concerns regarding the consumer, employment, and
geopolitical tensions have increased. There has been a wider-than-typical
performance differential between key technology industries in recent months as
AI-related euphoria translated into divergent outcomes. Areas like
semiconductors and hardware deemed as more direct plays on the AI trade were
among the recent outperformers, but there have been growing questions whether
enthusiasm may have eclipsed near-term fundamentals. Meanwhile, software and
IT services lagged due to their muted guidance and interest rate sensitivity,
as expectations for Fed rate cuts in 2024 have been lowered notably throughout
the year. It is important to note that the recent reporting quarter is
seasonally slow for software and IT services due to technology spending cycles
which favour the back half of the year. We saw a similar pattern of a slow
relative start compared to broader technology peers in early 2023, which
reversed course in the second half of the year.
We anticipate a potential broadening of performance across industries and
market caps, consistent with a more normalised environment. Global economic
conditions remain healthy, as labour markets, corporate earnings, and consumer
spending have been resilient. Valuations continue to be elevated but not
excessive and we believe there is the potential for upward revenue and
earnings revisions should we see a better spending environment in the second
half of the year. Uncertainty in terms of geopolitical tensions, the US
Presidential elections and the timing and the level of Fed and other central
bank interest rate cuts may translate to periods of rising volatility in the
coming months.
Since the end of this reporting period, CrowdStrike, a leading security
vendor, had a widespread operational issue with respect to an update of their
product. This was not a security breach, which would have been a major concern
for us. In response to the breach, which we feel will impact business near
term, we have reduced the position to reflect this risk. Longer term we
believe CrowdStrike should be able to work through this issue and continue to
see cybersecurity as an attractive investment theme.
Technology remains a key enabler across almost every industry and we will
continue to seek stocks which solve difficult problems and can be long-term
outperformers. Despite short-term periods of higher volatility among
technology stocks, earnings growth ultimately drives stock prices over the
long term, and in our view, we are still early in the spending trend
supporting this dynamic segment. We are excited about the investment
opportunities presented, and believe our research-driven, bottom-up process is
the most effective means of capturing the value generated by this theme.
We continue to believe the technology sector can provide some of the best
absolute and relative return opportunities in the equity markets -
particularly for bottom-up stock pickers with proven long-term selection
capabilities.
Mike Seidenberg
Lead Portfolio Manager
7 August 2024
Analysis of Portfolio
Contributors and detractors
Top five contributors relative to the benchmark Active Contributions GBP (%)
Apple Underweight 1.65
Intel Corporation Underweight 0.60
Micron Technology Overweight 0.58
Microsoft Underweight 0.48
Cisco Systems Underweight 0.35
3.66
Top five detractors relative to the benchmark
MongoDB Overweight -1.43
Zscaler Overweight -0.80
Snowflake Overweight -0.75
Shopify Overweight -0.66
MercadoLibre Overweight -0.38
-4.02
Source: Allianz Global Investors, top contributors to and detractors from the
Company's Net Asset Value total return for the six months to 30 June 2024
relative to the Dow Jones World Technology Index. Figures may not add due to
rounding.
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
For the six months ended For the six months ended
30 June 2024 30 June 2023
Total Total
Revenue £'000s Capital Return £'000s Revenue £'000s Capital Return £'000s
£'000s (Note 1) £'000s (Note 1)
Gains on investments held at fair value through profit or loss - 364,988 364,988 - 275,144 275,144
Exchange gains (losses) on currency balances (3) 631 628 (33) (1,326) (1,359)
Income 3,179 - 3,179 2,470 - 2,470
Investment management and performance fee (Note 2) (4,302) - (4,302) (3,258) - (3,258)
Administration expenses (634) - (634) (491) - (491)
Profit (loss) before finance costs and taxation (1,760) 365,619 363,859 (1,312) 273,818 272,506
Finance costs: Interest payable and similar charges - - - - - -
Profit (loss) on ordinary activities before taxation (1,760) 365,619 (1,312) 273,818
363,859 272,506
Taxation (443) - (443) (429) - (429)
Profit (loss) attributable to Ordinary shareholders (2,203) 365,619 (1,741) 273,818
363,416 272,077
Earnings (loss) per Ordinary share (Note 3) (0.57p) 94.58p 94.01p (0.43p) 68.39p 67.96p
BALANCE SHEET
As at As at As at
30 June 30 June 2023 31 December 2023
2024
£'000s £'000s £'000s
Investments held at fair value through profit or loss (Note 4) 1,634,808 1,173,373 1,286,786
Cash and cash equivalents 29,519 16,529 34,292
(2,329) (1,900) (2,303)
Net current liabilities
1,661,998 1,188,002 1,318,775
Total Net Assets
Called up share capital 10,719 10,719 10,719
Share premium account 334,191 334,191 334,191
Capital redemption reserve 1,021 1,021 1,021
Capital reserve 1,355,704 877,766 1,010,278
(39,637) (35,695) (37,434)
Revenue reserve
1,661,998 1,188,002 1,318,775
Shareholders' funds
432.8p 299.7p 338.2p
Net asset value per Ordinary share
The net asset value is based on Ordinary shares in issue of 384,022,319 396,435,569 389,957,010
Treasury shares in issue 44,734,361 32,321,111 38,799,670
STATEMENT OF CHANGES IN EQUITY
Called up Share Premium Account Capital Redemption Reserve
Share £'000s £'000s Capital Revenue Reserve
Capital Reserve £'000s Total
£'000s £'000s £'000s
Six months ended 30 June 2024
Net assets at 1 January 2024 10,719 334,191 1,021 1,010,278 (37,434) 1,318,775
Revenue loss - - - - (2,203) (2,203)
Shares repurchased into treasury during the period (Note 5)
- - - (20,193) - (20,193)
Capital profit - - - 365,619 - 365,619
Net assets at 30 June 2024 10,719 334,191 1,021 1,355,704 (39,637) 1,661,998
Six months ended 30 June 2023
Net assets at 1 January 2023 10,719 334,191 1,021 626,971 (33,954) 938,948
Revenue loss - - - - (1,741) (1,741)
Shares repurchased into treasury during the period (Note 5)
- - - (23,023) - (23,023)
Capital profit - - - 273,818 - 273,818
Net assets at 30 June 2023 10,719 334,191 1,021 877,766 (35,695) 1,188,002
NOTES TO THE FINANCIAL STATEMENTS
Note 1 - Summary statement of accounting policies and basis of preparation
The financial statements have been prepared in accordance with FRS 102 'The
Financial Reporting Standard applicable in the UK and Republic of Ireland'
which forms part of the United Kingdom Generally Accepted Accounting Practice
(UK GAAP) issued by the Financial Reporting Council in January 2022.
The condensed set of financial statements has been prepared on a going concern
basis in accordance with FRS 102 and FRS 104, 'Interim Financial Reporting',
the Companies Act 2006 and with the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies and Venture Capital
Trusts' (the 'SORP') issued by the Association of Investment Companies in July
2022.
The accounting policies applied in preparation of the condensed set of
financial statements with regard to measurement and classification have not
changed from those set out in the Company's annual financial report for the
year ended 31 December 2023.
The Total Return column of the Income Statement is the profit and loss account
of the Company. All revenue and capital items derive from continuing
operations. No operations were acquired or discontinued in the period. A
Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the Income Statement.
Note 2 - Management
Allianz Global Investors UK Ltd is appointed as AIFM, providing company
secretarial, administrative and sales and marketing services, whilst
performance management services are provided by Voya Investment Management Co
LLC. The management agreement provides for a base fee of 0.8% per annum
payable quarterly in arrears and calculated on the average value of the market
capitalisation of the Company at the last business day of each month in the
relevant quarter. The base fee reduces to 0.6% for any market capitalisation
between £400m and £1 billion, and to 0.5% for any market capitalisation over
£1 billion. Additionally there is a fixed fee of £55,000 per annum to cover
AllianzGI UK's administration costs.
In each year, in accordance with the management contract, the Investment
Manager is entitled to a performance fee subject to various performance
conditions. For years beginning on or after 1 January 2022, the performance
fee entitlement is equal to 10.0% (1 December 2013 to 31 December 2021: 12.5%)
of the outperformance of the adjusted NAV per share total return as compared
to the benchmark index, the Dow Jones World Technology Index (sterling
adjusted, total return). Any underperformance brought forward from previous
years is taken into account in the calculation of the performance fee.
A performance fee is only payable where the NAV per share at the end of the
relevant Performance Period is greater than the NAV per share at the end of
the financial year in which a performance fee was last paid. At 31 December
2023 this 'high water mark' (HWM) was 297.2p per share. In the event the HWM
is not reached in any year, any outperformance shall instead be carried
forward to future periods to be applied as detailed below. Any performance fee
payable is capped at 1.75% of the average daily NAV of the Company over the
period. For this purpose, the NAV is calculated after deduction of the
associated performance fee payable.
Any outperformance in excess of the cap (or where the HWM has not been met)
shall be carried forward to future years to be available for offset against
future underperformance but not to generate a performance fee. To the extent
the Company has underperformed the benchmark, such underperformance is carried
forward and must be offset by future outperformance before a performance fee
can be paid. Underperformance / outperformance amounts carried forward do so
indefinitely until offset.
The performance fee accrued as at 30 June 2024 was £nil (30 June 2023: £nil;
31 December 2023: £nil).
The Investment Manager's fee is charged 100% to revenue and the performance
fee is charged 100% to capital.
Note 3 - Earnings per Ordinary share
The earnings per Ordinary share is based on the net profit for the half year
of £363,416,000 (30 June 2023: £272,077,000, 31 December 2023:
£420,200,000) and on the weighted average number of Ordinary shares in issue
during the period of 386,588,184 (30 June 2023: 400,385,538, 31 December 2023:
397,030,186).
Note 4 - Valuation of investments
Investments are designated as held at fair value through profit or loss in
accordance with FRS 102 sections 11 and 12. Investments are initially
recognised at cost, which is considered to be their fair value at that point.
After initial recognition, these continue to be measured at fair value, which
for quoted investments is either the bid price or the last traded price
depending on the convention of the exchange on which the investment is listed.
FRS 102 sets out three fair value hierarchy levels for disclosure.
Level 1: The unadjusted quoted price in an active market for identical assets
or liabilities that the entity can access at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are
observable (i.e. developed using market data) for the asset or liability,
either directly or indirectly.
Level 3: Inputs are unobservable (i.e. for which market data is unavailable)
for the asset or liability.
As at 30 June 2024, the financial assets at fair value through profit or loss
of £1,634,808,000 (31 December 2023: £1,286,786,000) are categorised as
follows:
As at As at
30 June 31 December 2023
2024
£'000s £'000s
Level 1 1,634,808 1,286,786
Level 2 - -
Level 3 - -
1,634,808 1,286,786
Note 5 - Called up Share Capital
At 30 June 2024 there were 384,022,319 Ordinary shares in issue (30 June 2023:
396,435,569; 31 December 2023: 389,957,010). During the half-year ended 30
June 2024 the Company repurchased 5,934,691 Ordinary shares into treasury
(half-year ended 30 June 2023: 10,052,149; and year ended 31 December 2023:
16,530,708). During the same period no Ordinary shares were issued from the
block listing facility or reissued from treasury (half-year ended 30 June
2023: nil; year ended 31 December 2023: nil).
Since 30 June 2024, no shares were repurchased into treasury.
Note 6 - Investments
Purchases for the half-year ended 30 June 2024 were £285,942,000 (30 June
2023: £577,258,000) and sales were £302,908,000 (30 June 2023:
£577,965,000).
Note 7 - Transaction costs
Brokers commission costs on equity purchases for the half-year ended 30 June
2024 amounted to £97,000 (30 June 2023: £151,000) and on sales were
£135,000 (30 June 2023: £192,000).
Note 8 - Comparative information
The Half-Yearly Financial Report to 30 June 2024 and the comparative
information to 30 June 2023 have neither been audited nor reviewed by the
Company's auditors and do not constitute statutory accounts as defined in
section 434 of the Companies Act 2006 for the respective periods. The
financial information for the year ended 31 December 2023 has been extracted
from the statutory accounts for that year which have been delivered to the
Registrar of Companies. The auditor's report on those financial statements was
unqualified and did not contain a statement under Section 498 (2) or (3) of
the Companies Act 2006.
INVESTMENT PORTFOLIO
As at 30 June 2024
Investment Sector(1) Sub sector(1) Country Valuation % of Portfolio
£'000s
NVIDIA Semiconductors & Semiconductor Equipment Semiconductors United States 197,523 12.1
Microsoft Software Systems Software United States 131,418 8.0
Meta Platforms Interactive Media & Services Interactive Media & Services United States 103,381 6.3
Apple Technology, Hardware Storage & Peripherals Technology, Hardware Storage & Peripherals United States 101,830 6.2
Broadcom Semiconductors & Semiconductor Equipment Semiconductors United States 77,717 4.8
Amazon.com Broadline Retail Broadline Retail United States 67,975 4.2
Alphabet Interactive Media & Services Interactive Media & Services United States 64,965 4.0
Lam Research Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 55,786 3.4
Micron Technology Semiconductors & Semiconductor Equipment Semiconductors United States 54,011 3.3
ASML Holding(2) Semiconductors & Semiconductor Equipment Semiconductor Materials & Equipment Netherlands 46,997 2.9
Top ten investments 901,603 55.2
Monolithic Power Systems Semiconductors & Semiconductor Equipment Semiconductors United States 43,252 2.6
Taiwan Semiconductor Semiconductors & Semiconductor Equipment Semiconductors Taiwan 42,649 2.6
Western Digital Technology, Hardware Storage & Peripherals Technology, Hardware Storage & Peripherals United States 38,192 2.3
Advanced Micro Devices Semiconductors & Semiconductor Equipment Semiconductors United States 33,956 2.1
ServiceNow Software Systems Software United States 33,363 2.0
Palo Alto Networks Software Systems Software United States 33,161 2.0
Applied Materials Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 33,115 2.0
CyberArk Software Software Systems Software Israel 32,364 2.0
Datadog Software Application Software United States 31,153 1.9
Arista Networks Communications Equipment Communications Equipment United States 29,364 1.8
Top Twenty Investments 1,252,172 76.5
CrowdStrike Software Systems Software United States 28,435 1.7
Cadence Design Software Application Software United States 27,673 1.7
KLA Semiconductors & Semiconductor Equipment Semiconductor Equipment United States 27,452 1.7
Zscaler Software Systems Software United States 25,688 1.6
Amphenol Electronic Equipment Instruments & Components Electronic Components United States 24,314 1.5
HubSpot Software Application Software United States 20,660 1.3
Pinterest Interactive Media & Services Interactive Media & Services United States 20,142 1.2
Okta IT Services Internet Services & Infrastructure United States 19,814 1.2
Cloudflare IT Services Internet Services & Infrastructure United States 19,532 1.2
MongoDB IT Services Internet Services & Infrastructure United States 19,125 1.2
Top Thirty Investments 1,485,007 90.8
Dell Technologies Technology, Hardware Storage & Peripherals Technology, Hardware Storage & Peripherals United States 18,681 1.1
Elastic NV Software Application Software United States 15,758 1.0
NXP Semiconductors Semiconductors & Semiconductor Equipment Semiconductors Netherlands 15,547 1.0
Synopsys Software Application Software United States 14,084 0.9
JFrog Software Systems Software Israel 12,944 0.8
Uber Technologies Ground Transportation Passenger Ground Transportation United States 12,465 0.8
Netflix Entertainment Movies & Entertainment United States 12,234 0.7
Snowflake IT Services Internet Services & Infrastructure United States 12,218 0.7
Monday.com Software Systems Software Israel 11,515 0.7
MercadoLibre Broadline Retail Broadline Retail United States 10,883 0.7
Top Forty Investments 1,621,336 99.2
Oracle Software Systems Software United States 10,359 0.6
BE Semiconductor Industries Semiconductors & Semiconductor Equipment Semiconductor Materials & Equipment Netherlands 3,113 0.2
Total Investments 1,634,808 100
(1) GICS Industry classifications
(2) Includes ADR
ANALYSIS OF PORTFOLIO
Distribution of Assets as at 30 June 2024
By Sector % of portfolio By region % of portfolio
Semiconductors & Semiconductor Equipment 38.7 United States 89.8
Software 26.2 Netherlands 4.1
Interactive Media & Services 11.5 Israel 3.5
Technology, Hardware Storage & Peripherals 9.6 Taiwan 2.6
Broadline Retail 4.9
IT Services 4.3
Communications Equipment 1.8
Electronic Equipment Instruments & Components 1.5
Ground Transportation 0.8
Entertainment 0.7
Total Portfolio 100.0 Total Portfolio 100.0
As cash is excluded and the weightings for each sector are rounded to the
nearest tenth of a percent, the aggregate weights may not equal 100%.
For further information, please contact:
Kelly Nice Stephanie Carbonneil
Company Secretary Head of Investment Trusts
Allianz Technology Trust PLC Allianz Global Investors UK Limited
Tel: 0800 389 4696 Tel: 020 3246 7256
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FFFSITLIDIISRecent news on Allianz Technology Trust
See all newsREG - Allianz Global Invs - Net Asset Value(s)
AnnouncementREG - Allianz Tech Trust - Net Asset Value(s)
AnnouncementREG - Allianz Global Invs - Net Asset Value(s)
AnnouncementREG - Allianz Tech Trust - Net Asset Value(s)
AnnouncementREG - Allianz Global Invs - Net Asset Value(s)
Announcement