The waning influence of “Mag7” mega-cap US technology stocks saw Allianz Technology (ATT) outperform last year with the £1.9bn investment trust scoring a 24.7% underlying return versus the Dow Jones World Technology’s 20% advance, with shareholders doing even better with 25.8% as the share price discount narrowed.
ATT, in which activist hedge fund Saba Capital opened a 5.2% position this month, said last year showed the benchmark was no longer wholly driven by “Mag7 exceptionalism”. Although Nvidia and Alphabet were the largest contributors to the Dow Jones index’s performance, with Microsoft third and Meta rounding out the top ten contributors, Apple was “lacklustre, yielding a barely positive return”, it said.
“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.”
The 4.7% outperformance it achieved in 2025 is the third successive year the Mike Seidenberg managed portfolio has beaten the benchmark since its shares lost a third of their value in the 2022 growth crash.
Chair Tim Scholefield said 2025’s 24.7% return comes on the back of 2024’s 35.6 % and 2023’s 46.4%, which represented a “solid” 106.7% return over the past three financial years and 2.7 percentage points more than the benchmark index over that time.
“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,” the chair said.
Given the impressive recent returns, Scholefield said it was difficult to explain the persistent discount on its shares. This had enabled Saba to buy them for around 8% less than their net asset value and prompted the board to buy back nearly £125m worth last year in an attempt to narrow the valuation gap.
“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 news-flow and focus more on their investment returns compounding over time,” Scholefield said.
Our view
Matthew Read, senior analyst at QuotedData, said: “This is a decent set of results for Allianz Technology, which highlights the strength of the tailwinds that remain behind the technology sector. ATT has benefited from leaning more heavily into the broader AI ecosystem – particularly semiconductors and infrastructure providers such as Micron, Lam Research and Amphenol – illustrating that active management in technology can add value, even in an era where passive exposure to mega-cap tech has often seemed sufficient. The trust has been able to capture upside from some of the less obvious beneficiaries of the current innovation cycle. The outlook for AI remains strong, but with its persistent discount despite significant levels of buybacks, ATT needs to ask itself why its underlying performance is not fully recognised in its share price.”
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