Half-yearly Financial Report for the six months ended 30 June 2025
Financial Headlines for the six months ended 30 June 2025
| 30 June 2025 | 31 December 2024 | % Change | |
| Net Asset Value per Ordinary share | 471.8p | 458.6p | +2.9 |
| Ordinary share price | 424.0p | 419.0p | +1.2 |
| Dow Jones World Technology Index (sterling adjusted, total return) | 3,681.9 | 3,688.0 | -0.2 |
| Shareholders’ funds | £1,765m | £1,747m | +1.0 |
| Discount of Ordinary share price to Net Asset Value | -10.1% | -8.6% |
Interim Management Report
A Volatile Backdrop for Technology Investing
The first half of 2025 was a period of considerable uncertainty for global markets, and particularly for the technology sector. Whilst markets initially anticipated a pro-growth agenda, the return of President Donald Trump to the White House instead introduced a new era of unpredictability, with sweeping executive orders, a renewed focus on protectionism and the almost theatrical unveiling of “Liberation Day” tariffs in April. These measures, aimed at rebalancing global trade, initially rattled markets and raised the spectre of a broader economic slowdown.
While some of the more extreme tariff proposals were subsequently postponed, the policy environment remains fluid. The technology sector, with its global supply chains and cross-border dependencies, has been especially sensitive to these developments. However, there are also emerging positives: deregulation in certain areas and a renewed push for domestic energy independence in the US may ultimately benefit high-performance computing and artificial intelligence (AI) infrastructure – both of which are energy-intensive and central to the sector’s long-term growth.
Geopolitical tensions also escalated, with full-scale military action between Israel and Iran in June providing further uncertainty. A ceasefire agreement helped calm nerves toward the end of the period and saw markets respond positively. Central banks responded to the evolving landscape with diverging strategies: while the US Federal Reserve held rates steady, the European Central Bank, Bank of England and People’s Bank of China all cut their respective rates, and the Bank of Japan bucked the trend by raising rates, though that reflects a more specific and differentiated macroeconomic backdrop.
Technology Sector Resilience
Despite the challenging backdrop, the technology sector in aggregate demonstrated resilience, underpinned by continued enthusiasm for AI and related infrastructure. AI remains a powerful secular theme, with applications expanding across industries and driving demand for semiconductors, cloud infrastructure and cybersecurity. The emergence of Chinese challenger DeepSeek and other frontier models has further intensified interest in the space, reinforcing the sector’s long-term growth potential.
However, performance within the sector was uneven. Entertainment stocks surged, semiconductors posted modest gains and software and IT services advanced slightly. In contrast, technology hardware stocks declined sharply, reflecting macroeconomic caution and tariff-related headwinds. Market leadership also broadened somewhat, with mega- and large-cap stocks outperforming, while ‘super-mega caps’ (greater than $1tn) lagged. Our investment manager expands on these points in the Portfolio Manager’s Report below.
Performance and Portfolio Positioning
Against this backdrop, it is pleasing to report a Net Asset Value (NAV) total return of 2.9% for the six months to 30 June 2025, a positive absolute performance and an outperformance of 3.1 percentage points compared to our benchmark, the Dow Jones World Technology Index (sterling-adjusted, total return), which declined by 0.2%. The share price return was 1.2%, falling behind the NAV return, as the discount widened slightly from 8.6% at 31 December 2024 to 10.1% at 30 June 2025.
This relative outperformance was driven by a combination of strong stock selection and sector allocation. The entertainment technology industry performed strongly as noted above with the technology hardware sector one of the weakest. Respective overweight and underweight allocations to these sectors boosted performance. Our focus on mid- and large-cap companies, particularly those with exposure to secular growth themes such as AI, cybersecurity and digital infrastructure, also helped.
While the so-called “Magnificent Seven” stocks have dominated headlines in recent years, their performance in the first half of 2025 has been more mixed. This reinforces the value of our active, bottom-up investment approach, which seeks to identify emerging leaders below the mega-cap tier.
Further detailed commentary on the main determinants of performance is provided in the Portfolio Manager’s Report which follows my statement.
Investor Behaviour and the Case for a Long-Term Perspective
A topic of much debate at any point in time is whether the market is being driven more by investors or by short-term traders. In times of stress, it can certainly be more the latter. Short-termism is often driven by macro headlines – such as shifts in US monetary policy and tariff announcements – or quarterly earnings surprises.
This risks missing the broader point though. Technology is not a passing trend, but a structural force reshaping every sector of the global economy. From AI and automation to cloud computing and cybersecurity, the long-term trajectory of technology adoption remains upward. Attempting to time exposure to this trend, dipping in and out of the market, could prove detrimental to long-term returns. That said, while the ensuing volatility caused by reactive trading by the wider market can be uncomfortable, therein lies opportunity for the eagle-eyed stock-picker.
From the perspective of our investment manager, while they will absolutely adjust the portfolio to account for the expected effects of macro factors, their role is definitely not to chase momentum stocks or themes, or attempt to time the market, but rather to identify and support high-quality businesses via an investment process designed to select companies with durable competitive advantages, strong management teams and clear paths to sustainable growth. This requires patience, discipline and a willingness to look beyond the noise of the daily news cycle.
Outlook
The outlook for the technology sector over the remainder of 2025 and beyond is shaped by a complex and evolving set of macroeconomic, geopolitical and structural factors. While the long-term growth potential of the sector remains compelling, the near-term environment is likely to remain volatile, with many variables influencing both company fundamentals and investor sentiment.
From a macroeconomic perspective, the trajectory of global interest rates remains a key determinant. While inflation has moderated in many regions, the pace and extent of any monetary easing remain uncertain. Geopolitical developments also continue to cast a long shadow. The re-escalation of trade tensions under the Trump administration, including the threat and partial implementation of new tariffs, has introduced renewed uncertainty into global supply chains and cross-border investment flows.
At the same time, structural trends within the technology sector remain robust. The rapid evolution of artificial intelligence continues to drive innovation and investment across a wide range of industries. Demand for computing power, data infrastructure, cybersecurity and productivity-enhancing software remains strong, even if near-term spending patterns may be influenced by macroeconomic caution. The secular shift toward digital transformation, automation and cloud-based services is far from complete, and we believe the long-term beneficiaries of these trends will continue to deliver attractive returns.
However, it is important to acknowledge that the market’s response to these dynamics may not always be linear. Investor enthusiasm for AI and related technologies has at times led to elevated valuations and narrow market leadership. Periods of consolidation or rotation are to be expected, particularly if earnings growth fails to keep pace with expectations or if macroeconomic conditions deteriorate. In this context, we believe that a disciplined, bottom-up investment approach is essential.
Discount / Buybacks
The Board has continued to monitor the share price discount to NAV closely. Given the volatile market environment and broader industry trends, we have been more active in deploying share buybacks during the period. This has helped to maintain the discount at a relatively modest level, and we remain committed to using this tool judiciously to reduce volatility.
Over the period 6,873,738 shares were bought back at an average discount of 9.7%. Since the period end on 30 June 2025, 1,509,724 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.
Annual General Meeting
The Company’s AGM was held on 23 April 2025, and we were pleased to welcome shareholders both in person and online. All resolutions were passed, and a recording of the meeting, including a presentation from the lead portfolio manager, Mike Seidenberg, is available on the Company’s website.
We remain committed to maintaining high standards of transparency and engagement with our shareholders – as such we would like to 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/attafr24.
Principal Risks and Uncertainties
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 2024. These are set out in the Strategic Report 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
The Company’s website, www.allianztechnologytrust.com remains 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, www.allianztechnologytrust.com/en-gb/information/shareholder-information.
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 and therefore the next vote will be at next year’s AGM in April 2026.
Related party transactions
Note 15 of the Company’s 2024 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 Guidance 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 Guidance and Transparency Rule 4.2.8 R. The half-yearly financial report was approved by the Board on 8 August 2025 and signed on its behalf by the Chairman.
Tim Scholefield
Chairman
8 August 2025