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.
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.