1、Annual Financial Report31 December 2019Allianz Technology Trust PLCInvestment objectiveAllianz Technology Trust PLC(the Company)invests principally in the equity securities of quoted technology companies on a worldwide basis with the aim of achieving long-term capital growth in excess of the Dow Jon
2、es World Technology Index(sterling adjusted,total return)(the benchmark).Investment policyThe investment policy of the Company is to invest in a diversified portfolio of companies that use technology in an innovative way to gain a competitive advantage.Particular emphasis is placed on companies that
3、 are addressing major growth trends with innovation that replaces existing technology or radically changes products and services and the way in which they are supplied to customers.What constitutes a technology stockThe investment management team views technology companies as those with revenues pri
4、marily generated by the application of technology products and services.This is divided into two areas:Traditional telecommunications,media and technology(TMT)segments which include Internet,computers and computer peripherals,software,electronic components and systems,communications equipment and se
5、rvices,semiconductors,media and information services.Non-traditional technology companies are those in various other industries that use technology in an innovative way to gain a strategic,competitive edge.As technology becomes ever more pervasive,it is increasingly difficult to differentiate betwee
6、n technology companies and significant adopters as outlined above.Much is spoken of disruptive technologies those which will force change within an industry and which may often displace the dominance of incumbent market leaders.The challenge is to understand not only current technologies,but also fu
7、ture trends and the likely effects.Asset allocationThe fund managers do not target specific country or regional weightings and aim to invest in the most attractive technology shares on a global basis.The fund managers aim to identify the leading companies in emerging technology growth sub-sectors.Th
8、e majority of the portfolio will comprise mid and large cap technology shares.Risk diversificationThe Company aims to diversify risk and no holding in the portfolio will comprise more than 15%of the Companys assets at the time of acquisition.The Company aims to diversify the portfolio across a range
9、 of technology sub-sectors.GearingIn normal market conditions gearing will not exceed 10%of net assets but may increase to 20%.The Companys Articles of Association limit borrowing to one quarter of its called up share capital and reserves.As at 31 December 2019 there was no borrowing facility in pla
10、ce.LiquidityIn normal market conditions the liquidity of the portfolio,that is the proportion of the Companys net assets held in cash or cash equivalents,will not exceed 15%of net assets but may be increased to a maximum of 30%of net assets.DerivativesThe Company may use derivatives for investment p
11、urposes within guidelines set down by the Board.Foreign currencyThe Companys current policy is not to hedge foreign currency.BenchmarkOne of the ways in which the Company measures its performance is in relation to its“benchmark”,which is an index made up of some of the worlds leading technology shar
12、es.The benchmark used is the Dow Jones World Technology Index(sterling adjusted,total return).The Companys strategy is to have a concentrated portfolio which is benchmark aware rather than benchmark driven.Therefore,the Company has tended to have a significantly higher than benchmark allocation to h
13、igh growth,mid cap companies which are considered to be the emerging leaders in the technology sector.The Managers believe that the successful identification of these companies relatively early on in their growth stages,offers the best opportunity for outperformance over the long-term.Key Informatio
14、nAllianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019OverviewContentsOverviewIFC Key Information2 Financial Highlights5 Chairmans Statement11 Why invest in technology?Insights24 Digitisation takes off28 Rise of the trillion-dollar companiesInvestment Managers Revi
15、ew34 Investment Managers Review42 Top 20 Holdings47 Stock Stories50 Investment PortfolioDirectors Review54 Directors56 Strategic Report62 Engagement with Key Stakeholders63 Environmental,Social,Governance Research and Stewardship(ESG)65 Directors Report71 Corporate Governance Statement74 Report of t
16、he Management Engagement Committee75 Report of the Nomination Committee76 Report of the Remuneration Committee77 Directors Remuneration Implementation Report80 Directors Remuneration Policy Report81 Statement of Directors Responsibilities82 Audit Committee ReportFinancial Statements 86 Independent A
17、uditors Report 92 Income Statement 93 Balance Sheet 94 Statement of Changes in Equity 95 Notes to the Financial StatementsInvestor Information 108 Glossary of UK GAAP Performance Measures and Alternative Performance Measures109 Investor Information112 Notice of Meeting22 2 3253 85107Financial Highli
18、ghtsInsightsDirectors ReviewFinancial StatementsInvestment Managers ReviewInvestor Information 1Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Net assets per ordinary share+28.8%2019 1654.1p 2018 1284.7pPerformance against sector average1 Benchmark+39.0%2019
19、1369.9 2018 985.8Share price per ordinary share+35.0%2019 1647.0p 2018 1220.0pPerformance against benchmark1Financial HighlightsAs at 31 December 2019 1 10 years to 31 December 2019.Rebased to 100 at 30 November 2009.2 Allianz Technology Trust Net Asset Value(PAR)undiluted.3 Dow Jones World Technolo
20、gy Index(sterling adjusted,total return).4 Morningstar Global Technology Sector EquitySource:AllianzGI/Datastream.2018 figures are over a 13 month period.The APMs can be found on page 108.65050Dec 09 Dec 19%indexed65050Dec 09 Dec 19%indexed Allianz Technology Trust2 Benchmark3 Allianz Technology Tru
21、st2 Sector average42OverviewOrdinary share price(p)Premium(discount)of ordinary share price to net asset value per share(%)Shareholders funds(m)NAV versus benchmarkNAV per ordinary share(p)20152016201720182019201520162017201820192015201620172018201920152016201720182019201510.39.041.023.828.831.531.7
22、7.039.00.12016201720182019313.4430.1583.4175.7216.71,200.01,220.01,647.0632.0799.01.8(0.4)(6.4)(4.4)(5.0)(0.4)1,178.61,284.71,654.1675.1835.9 Allianz Technology Trust2 Benchmark3Silicon Valley,California,USA.3Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Fin
23、ancial SummaryAs at 31 December 2019 As at 31 December 2018%changeNet Asset Value per Ordinary Share1,654.1p 1,284.7p+28.8Ordinary Share Price1,647.0p 1,220.0p+35.0(Discount)premium on Ordinary Share Price to Net Asset Value(0.4%)(5.0%)n/a Dow Jones World Technology Index(sterling adjusted,total ret
24、urn)1,369.9 985.8+39.0 Shareholders Funds583,440,246430,072,701+35.7For the year ended 31 December 2019For the period ended 31 December 2018*%changeNet Revenue Return per Ordinary Share(7.46p)(9.19p)n/a Ongoing charges0.88%1.01%n/a*The 2018 figures are over a 13 month period.Ongoing charges(as defin
25、ed in the APMs on page 108)are calculated by dividing operating expenses paid by the Company by the average NAV over the year,excluding any performance fees.The 2018 annualised ongoing charge is 0.93%.Five year performance summary31 December 201931 December 2018*30 November 2017 30 November 201630 N
26、ovember 2015Shareholders Funds 583.4m 430.1m 313.4m 216.7m 175.7m Net Asset Value per Ordinary Share1,654.1p 1,284.7p1,178.6p835.9p 675.1p Ordinary Share Price1,647.0p 1,220.0p1,200.0p799.0p 632.0p Dow Jones World Technology Index(sterling adjusted,total return)1,369.9 985.8 984.8 748.7 568.5(Discou
27、nt)premium on Ordinary Share Price to Net Asset Value(0.4%)(5.0%)1.8%(4.4%)(6.4%)4OverviewChairmans StatementDear ShareholderStrong investment returns defy global economy headwinds The year to 31 December 2019 was a period of strong returns for almost all equity markets around the world,in spite of
28、the global economy shifting into reverse gear and geopolitical tensions continuing to prevail.It was a year dominated by the prolonged and thus far unresolved-trade dispute between China and the United States which hit manufacturing and corporate earnings around the world.However,despite this compli
29、cated backdrop,global stock markets delivered unexpectedly strong returns,with the technology sector shining brightest of all and outperforming global stock markets by some considerable distance.Although the Companys overall performance was positive,2019 was very much a tale of two halves.Over the f
30、irst half,to 30 June 2019,absolute and comparative performance was impressive,boosted by careful stock selection,as we reported in the half yearly financial report.Indeed,at that half-way stage,the Company was significantly outperforming its benchmark index,the Dow Jones World Technology Index(sterl
31、ing adjusted,total return)and thus continuing the robust direction of travel witnessed in 2018.Jumping forward six months,whilst performance remained strong the Company lost ground to its benchmark and ended the year lagging it by some considerable distance.For the year to 31 December 2019,Net Asset
32、 Value(NAV)per share increased by a pleasing 28.8%but this compared with a rise of 39.0%for the benchmark.In order to explain the Companys relative performance over the year,it is important to flag that ours is a high conviction concentrated portfolio with attractive growth and valuation characteris
33、tics that differs markedly from the benchmark.As such,we have a large overweight position to smaller and mid-cap higher growth stocks and a large underweight position in some of the very largest technology companies(which grew even larger over the course of 2019).This positioning has driven the Comp
34、anys sustained outperformance over recent years but is the key reason for underperformance this time around,as explained in the Investment Managers Review,on pages 32 to 40.Whilst any period of underperformance is disappointing,the Board is reassured by the Managers demonstrable expertise over many
35、years and by the Companys excellent medium to longer term track record.And,as we enter a new decade,it is worth remembering that not only has the technology sector delivered outstanding cumulative returns over the last ten years,but your Company has also been one of the top-performing of all UK-list
36、ed investment trusts over the same timeframe.Over the year,the market price of the Companys shares rose by 35.0%,from 1220p to 1647p as at 31 December 2019,moving from a discount to NAV of 5.0%to a discount of 0.4%.The share price typically traded at a small discount or small premium to NAV througho
37、ut most of the reporting period.Strong investment returns,combined with share issuance(as described below),saw shareholders funds increasing by over 153.3 million to 583.4 million(31 December 2018:430.1 million).No dividend is proposed for the year ended 31 December 2019(2018:nil).Given the nature o
38、f the Companys investments and its stated objective to achieve long-term capital growth the Board considers it unlikely that any dividend will be declared in the near future.It should be noted that all the Companys expenses continue to be charged to income and not capital,as set out in the accountin
39、g polices found in the financial statements.Your Board regularly considers the use of borrowing and gearing.Although we have this flexibility,to date our assessment has been not to take on this additional risk.5Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019I
40、nvestment Managers ReviewYour Company is managed from San Francisco by an experienced portfolio management team.This years performance is explored in depth on pages 34 to 40 where the Manager explains the reasons behind the Technology sectors momentum in 2019.They also consider how the global econom
41、ys marked slowdown,geopolitical manoeuvrings and the gloomy outlook for the corporate sector have impacted on the Companys high conviction portfolio.Looking ahead,the Manager reviews the prospects for technology and why good stock picking remains fundamental as the Company continues its search for(1
42、)major technology growth trends ahead of the crowd and(2)stocks within tech sub-sectors that offer genuine,long-term growth potential.How do we compare with our peers and other indices?The table below compares the Company to its technology fund peers and related indices.You will note that the Compan
43、ys performance over all timeframes has been robust,particularly over longer periods.%change1 year3 years5 years 10 yearsATT NAV 28.896.9176.3470.9Dow Jones World Technology Index(sterling adjusted,total return)39.079.0161.6381.5MSCI World Technology Index(total return)42.487.4178.6436.6Russell MidCa
44、p Technology Index18.165.1147.9390.8Morningstar Global Technology Sector29.856.8118.9257.4 Source:Allianz Global Investors in GBP as at 31 December 2019The table below provides a comparison with the broader UK and world equity indices which many investors will use when reviewing the performance of t
45、heir individual portfolios.%change1 year3 years5 years 10 yearsATT NAV 28.896.9176.3470.9FTSE All Share Index(total return)19.222.043.8118.3FTSE World Index(total return)22.834.982.4204.3Source:AllianzGI in GBP as at 31 December 2019The Board continues to pay close attention to the Companys performa
46、nce position against the wider universe of open ended funds,closed ended funds and exchange traded funds.The funds included within the Morningstar Global Technology Sector-Equity(Morningstar)category has increased considerably during 2019 and the performance of your Company is very positive for the
47、3,5 and 10 years investment periods.1 year 3 years 5 years 10 years Peer Group Ranking vs Morningstar 59/983/694/551/51Growing the CompanyYour Board remains committed to growing the Company.In addition to delivering capital growth per share,increasing the total value of the Company should make the C
48、ompany more attractive to a wider range of investors through improved secondary market liquidity and marketability;it also enables the Companys fixed expenses to be spread over a larger asset base,to the benefit of all shareholders.Each year the Board considers carefully what level of expenditure sh
49、ould be incurred to promote the growth of the Company,recognising that the benefit of much marketing-related expenditure is cumulative and hence that returns are not easily measured within each financial year.Over recent years the Board has modestly increased marketing expenditure on a strongly focu
50、sed basis and it is very pleasing to note the heightened profile the Company has achieved.Awareness has grown on the back of the Companys long-term performance record as well as the numerous(and prestigious)awards and positive press comment that this performance has delivered.6OverviewCreating deman
51、d for the Companys sharesOur communications programme continues to create significant demand for the Companys shares,particularly through online investment trading platforms where demand has increased steadily in recent years.The Companys shares have become ever more popular with retail investors ke
52、en to access the growth potential of the fast-moving technology sector and who believe that Allianz Technology Trust provides them with a cost-effective means of doing so.The Company featured in the top twenty most viewed investment trusts on the Association of Investment Companies(AIC)website for 2
53、019.It was also amongst the top ten most bought investment trusts through the Interactive Investor platform over the same 12-month period.The marketing programme includes targeted advertising,investor events(often in association with trading platform providers)and substantial interaction with nation
54、al and industry journalists,financial advisers and wealth managers,all timed to coincide with UK visits made by Walter Price and other members of the investment management team.In 2019,we continued recording regular podcasts,providing insights and outlook views for those interested in the technology
55、 sector.This content can be accessed through iTunes or the Companys website(),managed by Allianz Global Investors.Investment Insights from Silicon ValleyShareholders are reminded that,via the website,they can register to receive monthly performance updates via email as well as regular Investment Ins
56、ights from Silicon Valley e-newsletters from the Companys Investment Manager.If you would like to receive our targeted communications,you can opt in via the website simply click on Sign up on the home page.More award accolades bestowedAwards success is helpful in raising awareness of your Companys s
57、pecialist investment remit.Shareholders will know that Allianz Technology Trust has received numerous high profile and prestigious awards in recent years.These include the Investment Week Investment Company of the Year Award,Specialist category in four of the last five years.This award is coveted as
58、 it recognises excellence in closed-ended fund management and highlights the Companys long term performance record.The judging panel was made up of some of the UKs leading researchers and investors in investment trusts and closed-ended companies,as well as several senior board members with many year
59、s experience in the industry.In September 2019,the Company was again recognised by Investors Chronicle who named it a Top 100 Fund for the seventh consecutive year.Earlier in 2019,the Company was named Best Large Trust at the Money Observer Investment Trust Awards.The publication noted that ATT had
60、achieved the highest returns among 2019s award-winners,calling it“a worthy winner of our most prestigious sector award”.These awards are valued accolades as they reflect the Companys long-term investment performance track record and help create sustained and ongoing demand for the Companys shares.On
61、going issuance of sharesAs stated earlier,the Board is very keen to increase the number of shares in issue as a means of growing the Company.However,where there is market volatility the Board will also consider buying back shares when the discount is over 7%and all other factors align.The Board cons
62、iders carefully the parameters which should apply to both the issuance of shares and the buy-back of shares from the market and will only proceed when the action is in the best interests of shareholders.No shares were bought back during the reporting year.Within the year the Company responded to inc
63、reased demand by issuing a total of 1,795,000 new shares,at an average premium to NAV of 1%,for a total of 29.8 million.So far in 2020 the Company has issued 425,000 new shares,at an average premium of 1%,for a total of 8.09 million.7Allianz Technology Trust PLC Annual Financial Report for the year
64、ended 31 December 2019Our continued focus on the costs of running the CompanyYour Board continues to work hard to ensure that the costs of running the Company are both reasonable and competitive,whilst also recognising that Allianz Technology Trust is a specialist vehicle investing in a sector that
65、rewards judicious,active management.The Ongoing Charges Figure(OCF)is calculated by dividing operating expenses by the average NAV.The OCF for the year under review was 0.88%(2018 annualised OCF:0.93%).The OCF excludes any performance fee to which the Investment Manager may be entitled if the Compan
66、ys NAV per share outperforms its benchmark(and is explained in full under Financial Statements,Note 2 on page 97).As a result of the Companys underperformance of its benchmark index in the year to 31 December 2019,no performance fee was earned by the Investment Manager for this period(2018:5,162,649
67、).Although actual performance was strong over the year,the Investment Management Agreement is in place to encourage,recognise and reward relative outperformance.Your Board is satisfied that the performance fee structure is an appropriate incentive mechanism and is confident in the Managers ability t
68、o deliver outperformance in future review periods,just as they have done in the past.The Companys market capitalisation ended the year at 580.9m.Throughout the year,market cap exceeded 400 million which is significant because of the Companys tiered management fee structure with Allianz Global Invest
69、ors.Under this arrangement,the standard fee rate of 0.8%of market capitalisation reduces to 0.6%for any amount of market capitalisation in excess of 400 million.The Board is pleased to inform you that as of 1 January 2020,a new tier to the management fee has been agreed.This is set at 0.8%for any ma
70、rket capitalisation up to 400m,0.6%for any market capitalisation between 400m and 1 billion,and 0.5%for any market capitalisation over 1 billion.Board matters Your Companys Investment Managers continue to take advantage of being based in San Francisco,close to where many of the worlds technology com
71、panies are headquartered.The team has close and regular contact with the growth companies they hold as well as those that have been identified for future investment.As a Board we recognise the advantage the Company gains by being within touching distance of Silicon Valleys gateway,whilst recognising
72、 the constraints imposed by the geographical distance and time zone difference between London and San Francisco.Most of the Companys Board meetings are held in London,but we schedule a periodic visit to San Francisco.The most recent San Francisco Board meeting was at the end of September/beginning o
73、f October 2019 and the next visit is planned for Autumn 2021.The frequency of these visits recognises the importance of good communications and close working relationships between the Manager and the Board,but also the costs and time commitment of such trips.The United Kingdom formally left the Euro
74、pean Union on 31 January this year and has moved into a transitional period that is scheduled to end on 31 December 2020.Other than the possible impact on the Sterling exchange rate(as already seen in the aftermath of last Decembers general election),this change is not a material factor to the globa
75、l investment proposition offered by the Company.The Companys AIFM,Allianz Global Investors GmbH(AllianzGI GmbH)is incorporated in Germany and it currently provides cross-border management services to the Company using the AIFMD management passport.The German regulator BaFin and the FCA in the UK rea
76、ched a formal understanding so that AllianzGI GmbH can continue to operate as the AIFM,and is regulated in the UK by the FCA,in a three-year transition period.More detail can be found on page 59.An internally facilitated Board and Manager performance appraisal process was conducted towards the end o
77、f the year.This confirmed that the current Board is working in an effective manner with no significant shortcomings identified In accordance with the new AIC Code,all directors will now be proposed for re-election annually.8OverviewBoard changesIn the Companys interim report,we confirmed our earlier
78、 announcement that Richard Holway had decided to step down from the Board in accordance with the Boards agreed succession plan.Richard retired from the Board on 31 December 2019.I and my fellow board members would once more like to record our thanks to Richard for his excellent contribution over his
79、 12-year tenure and we wish him all the very best for the future.We are delighted that Neeta Patel joined our Board on 1 September 2019,bringing with her a wealth of experience of evolving technologies.She is currently the Chief Executive Officer of the Centre for Entrepreneurs,a board advisor for T
80、ech London Advocates and an entrepreneur mentor-in-residence at London Business School.She is also a member of the newly appointed advisory board at City Ventures,the entrepreneurship hub at City University,London and a non-executive director for various start-ups.Neeta has already proven herself to
81、 be a valuable addition to the Board and I look forward to introducing her to shareholders at the Companys forthcoming Annual General Meeting in May where,in accordance with the Articles of Association,she will be standing for election.Continuation VoteIn accordance with our Articles of Association
82、we are required to propose a continuation vote every five years.The most recent continuation vote was proposed and passed by Shareholders at the 2016 AGM.Shareholders will have a further opportunity to vote on the continuation of the Company at the AGM to be held in 2021.OutlookThe beginning of the
83、new decade provides us with an opportunity to reflect on the technology sectors success story over the last ten years and,of course,the exceptional and top-performing investment performance your Companys investment managers have delivered.Whilst we are all aware that past performance is no guide to
84、future returns,our thoughts now turn to the future and what the new decade could hold.Can technology stocks deliver success on a similar scale,when stock market sectors typically come and go out of fashion over the course of time?Of course,nobody has a perfect vison of what lies ahead but we are rea
85、ssured by the Managers first-hand knowledge and long track record.The team continues to believe that exciting opportunities to identify disciplined and well-run tech companies lie ahead.Geopolitics and macroeconomic uncertainties will continue to throw up obstacles along the way.Last year,the US-Chi
86、na trade wars triggered clouds of uncertainty and already,at this early stage of 2020,we have witnessed challenges which have unnerved markets.In the very first days of 2020,new tension between the US and Iran unsettled investors and,more recently,the focus of concern has been the spread of the coro
87、navirus;this global public health crisis is evolving day by day and,first and foremost,our concerns relate to the loss of human life and how to contain the spread of the virus.From an investment perspective,however,this dynamic situation poses a very real threat to the hopes of recovery in the globa
88、l economy.The end of February and beginning of March were very painful weeks for stock markets,with global share prices tumbling over successive days.We will continue to monitor the situation but,in the face of this and other future uncertainties,your Board is reassured by the Managers proven abilit
89、y to carefully balance risks and opportunities,leveraging industry experience and emphasising individual stock selection.Technology is a 21st century growth story and,with every year,its reach and influence grows.It disrupts old industries and moves into different parts of our lives as it tightens i
90、ts grip on the global economy.This bubble is not about to burst any time soon but investing in the sector is not for the faint-hearted and there will always be examples of technology stocks that do not deliver on their promised growth trajectory.With this in mind,we continue to believe that a divers
91、ified technology fund like ours has considerable advantages,since the portfolio offers risk-diversification by investing in a basket of stocks across a range of technology sub-sectors.The team continues to believe that a carefully chosen portfolio of technology stocks can continue to deliver positiv
92、e returns over the long term.9Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Annual General MeetingThe AGM will be held at the new premises of Grocers Hall Princes Street London EC2R 8AD,on 19 May 2020 at 12 noon.I look forward to welcoming and meeting those
93、shareholders who can attend.For those unable to attend in person,the AGM investment presentation will be filmed and made available on the Companys website as soon as practicable after the event.Your vote countsYour Board takes very seriously its responsibility for safeguarding the interests of all S
94、hareholders.We are keen to remind you that being a Shareholder gives you the right to vote on issues that affect the Company,such as director elections and any amendments to policy.Irrespective of whether you can attend the AGM,Shareholders are encouraged to make your voices heard by voting on ordin
95、ary and special business matters,as detailed on the form of proxy enclosed with this report.Robert JeensChairman13 March 202010OverviewWhy invest in technology?11Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Technology is embedding itself into new industries
96、:twenty years ago,car companies relied on mechanics to stay competitive.Today,they rely on their technology departments.The greatest innovation in the motor industry is coming from technology companies such as Google,rather than VW or Ford.As we look to the future,the key determinant of the success
97、or otherwise of a motor company is likely to be the extent to which it can harness technology to build safer,comfortable and more energy efficient cars.We see a similar phenomenon in payment systems.Cash is increasingly obsolete,while mobile apps and digital currencies are likely to overtake credit
98、and debit cards as the most popular ecommerce payment methods worldwide.Nimble fintechs are challenging the existing banking networks,which are encumbered by legacy systems and,too often,surprised by the speed with which people are willing to switch.Why invest in technology?With every year,the reach
99、 and influence of technology grows.It disrupts new industries and moves into different parts of our lives.Technology is present in the way we drive,the way we shop,in our workplaces,in our homes.It helps us communicate effectively and manage our lives more efficiently.The companies that create that
100、technology are in a powerful position to grow even in stagnant economic conditions.Software providers form a major position in the Trust,representing 34.4%of the portfolio as at 31 December 2019.12OverviewThis pattern is replicated across multiple industries.No sector is immune those that believe th
101、eir business is untouchable are likely to experience the most dramatic change when it arrives.Companies must embrace technology and innovate,or face extinction.In the process,the addressable market for technology companies grows.However,technology is not only about taking staid old industries and di
102、srupting them,technology also has an important role in allowing businesses to be more efficient.This is at the heart of corporate digital transformation.Those businesses that are not embracing a digital strategy find themselves marginalised and uncompetitive.Companies that rethink their existing bus
103、iness models and processes through the use of technology are becoming more efficient.Increasingly,companies see the potential in artificial intelligence.In a healthcare company,it may be the reading of scans,or the administration of drugs.For insurance companies,it may be in the interpretation of cl
104、aims.The data sets used to power Artificial Intelligence(AI)would not be accessible if it was not for the cloud.Also,the cloud enables businesses to build sufficient scale to cope with the demands of data-intensive services.This is driving wider adoption of cloud-based systems.It is also saving comp
105、anies money:moving to software as a service and cloud computing lets companies circumvent a costly upgrade cycle.Rather than having to support expensive in-house technology capability,they can pick and mix their technology requirements to suit their business requirements.They can move data storage t
106、o the cloud and buy their software on a subscription basis.These trends have helped make technology a successful investment in recent years.That said,just because technology is pervasive and high growth,it does not guarantee good returns.This was seen starkly in 2019,when strong revenue growth provi
107、ded little protection in the technology rout in the last quarter of the year.While technology companies can justify a premium to the wider market they are delivering structural growth at a time of flat economic growth-valuation levels are important and need a discriminating eye.Technology investment
108、 forces an investor to look to the future.This is the direct opposite of investing in a benchmark that rewards yesterdays winning companies.Technology investment demands that investors uncover the trends of the future,looking to see where industries are going,and who is likely to win or lose from th
109、ose developments.In this way,it forces investors to keep pace with changing markets.At each stage,therefore,13Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019the technology investor should be aligned with the winners from change,rather than those at the wrong
110、end of it.We continue to see new industries being created,while old industries die or are forever altered and technology sits at the heart of this global innovation.At a time when the global economy may be slowing,it is also worth noting that technology is far less cyclical today than it has ever be
111、en.The days of the upgrade cycle,where companies replaced expensive technology equipment when they were flush with cash,have largely disappeared.Enterprise software allows companies to avoid these capex-heavy cycles,paying for what they need when they need it.As it stands,technology incorporates a v
112、ast range of different options.There are the traditional technology companies fast-growing,disruptive companies such as Amazon or Square,where revenue growth might be 50%per year.However,the sector has alternative options:Microsoft and Apple,for example,could be considered more stable,annuity-like o
113、ptions.Less highly-valued,they pay growing dividends and deliver steady earnings.There are turnaround ideas,or special situations.This means it is possible to build a portfolio that can perform in a range of market environments.The diversity of technology companies is often over-looked.The growth of
114、 technology has been seen in its increasing dominance of stock market indices.Technology currently forms around 23%of the S&P 500 index,its largest sector weight.1 For the MSCI World,it is 17%.2 As technologys influence grows,we see it forming a greater part of stock market indices as it pervades mo
115、re and more industries.Most investors have long-term goals for their savings:they may be saving for retirement,or for their childrens university fees.It makes sense,therefore,to future-proof an investment portfolio by aligning it with enduring structural trends.An investment in technology helps keep
116、 a portfolio focused firmly on the future.1 Source:S&P Dow Jones Indices,December 2019.2 Source:MSCI,December 2019.Tesla announced the Cybertruck in 2019,an all-electric light commercial vehicle with a range of up to 500 miles.14OverviewTotal return how technology has performed against UK and global
117、 equitiesHow technology contributes to the MSCI World indexSource:MSCI World Index as at 31 December 2019.The weightings for each sector of the index are rounded to the nearest tenth of a percent;therefore,the aggregate weights for the index may not equal 100%.Source:Thomson DataStream,total return%
118、in GBP,to 31 December 2019.Dow Jones World Technology(sterling adjusted,total return)FTSE All-Share Total ReturnFTSE World Total Return5 years1 year10 yearsInformation Technology17%Financials16%Health Care13%Industrials11%Consumer Discretionary10%Communication Services8%Consumer Staples8%Energy5%Mat
119、erials4%Utilities3%Real Estate3%39.0161.643.882.4381.5118.3204.3 19.222.8 15Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Key milestones in technology CERN scientist Tim Berners-Lee writes a proposal to enable the linking and sharing information over the int
120、ernet.This was to become the World Wide Web,using HTTP protocol and HTML language.Ultimately,the development of web browsers such as Netscape Navigator in 1993 and Internet Explorer in 1995 makes surfing the Web easier.Stanford PhD students Larry Page and Sergey Brin begin indexing the World Wide We
121、b.They went on to found Google in September 1998.Previous search engines had ranked search terms by the amount of times they appeared on the page,while Google looked at the relationships between websites instead.The dotcom bubble begins.Internet businesses were launched in a frenzy.Capital was readi
122、ly available and not always discerning.New valuations clicks,eyeballs were used to justify vast valuations.The house of cards tumbled from March 2000.However,some of the very best companies ultimately justified the lofty expectations set for them.Mark Zuckerberg starts social networking site Faceboo
123、k in a Harvard dorm room.There were other players at the time and the Winklevoss twins famously sued Zuckerberg for copying their ConnectU idea.Today,the company has expanded far beyond its original concept,taking over businesses such as Instagram and WhatsApp.Amazon was founded by Jeff Bezos in the
124、 garage of his rented home in Washington.Bezos persuaded family members to back his venture,then just an online bookstore.Those who invested at the start have now made over 100 x their initial investment.USB ports are invented,allowing computing devices to connect with ease.Flash drives were launche
125、d in December 2000,while the first consumer Bluetooth device was launched in 1999.The launch of Wikipedia marked a new era in user-generated content.Once a byword for inaccurate information,it has become a go-to information source.There are now 200 versions of Wikipedia and it holds millions of arti
126、cles.19891994199619982001200416OverviewThe current US president has helped ensure the ongoing relevance of Twitter as a source of breaking news and opinions.The site first launched in 2006,offering limited character messages called“tweets.”IBMs Watson brought artificial intelligence to the mainstrea
127、m.In 2010,man was pitted against machine on Jeopardy!.Machine won,beating Ken Jennings.Azure was Microsofts attempt to rebuild its relevance,and followed the launch of Amazon Web Services.The two platforms have become the core infrastructure for the modern corporation and enabled widespread digitisa
128、tion.Competition in video streaming heated up with the launch of Apple TV+and Disney+and others are waiting in the wings.Neflix was launched in 1997 and today sits atop an increasingly competitive market for streaming services.It has nevertheless made real progress with its original content,and now
129、spends over$17 billion a year on content,many times that of any other content producer.The iPhone launched in 2007,creating the mobile internet and setting a standard for smartphone design and usability.Instagram launched,receiving a billion-dollar boost of Facebook cash in 2012.Its relevance has bu
130、ilt over time,fuelled by an army of influencers.It changed the way people shared their lives with the world.Amazon Echo and Alexa were the first consumer-focused artificial intelligence devices,fuelling an explosion in smart home devices.A number of competitors have since been launched,but Alexa rem
131、ains the one to beat.20062007201020142019 17Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Allianz Technology Trust PLCAllianz Technology Trust is managed by the Allianz Global Investors Global Technology team based in San Francisco.The team is co-headed by W
132、alter Price and Huachen Chen,who have worked together for more than 30 years and who both have decades of experience working within the sector.Walter and Huachen report into the Head of Global Technology,Karen Hiatt.The team includes two experienced portfolio managers/analysts,Michael Seidenberg and
133、 Danny Su,who each offer more than a decades experience.They are supported by over ten global sector analysts,nine of whom focus purely on technology companies.Based in the US,Europe and Asia,these specialists extend a global reach which is ever-more important in the technology sector.Top 100 FundsA
134、llianz Technology Trust has been chosen from almost 3,000 eligible actively-managed funds as one of Investors Chronicle Top 100 Funds for six consecutive years.The Companys selection is based on its performance history relative to risk,fees,tenure of manager and consistency of returns.Investment Com
135、pany of the Year AwardsThe Company won this coveted award in November 2019,having also been victorious in 2018,2017 and 2015.This accolade recognises excellence in closed-ended fund management and highlights consistent performance over time.Money Observer Rated Funds 2019The Company has been include
136、d in Money Observers Rated Funds list for 2019.The list recognises funds that have demonstrated consistent outperformance or that have been chosen as ideal routes into specific markets and sectors.Money Observer Investment Trust Awards 2019Allianz Technology Trust won the Best Large Trust category,i
137、n recognition of its consistent,high achievement.The publication described the Company as“a worthy winner of our most prestigious sector award”.This accolade is an independent,statistical and qualitative assessment of Allianz Technology Trusts performance and highlights the Trusts outperformance bot
138、h in its class and against its peers.18OverviewFirst-hand knowledge:OREGONCALIFORNIANEVADASeattleWASHINGTON132910111213141516181920San FranciscoAllianz Technology Trusts top twenty holdings1378546189101311141215161719202within 50 mileswithin 2 hourselsewhere in the USAoutside of the USAMicrosoftAppl
139、eFacebookTaiwan SemiconductorPaycomMastercardTeradyneSamsung ElectronicsFortinetRingcentralAutodeskAMDTeslaAlphabetZscalerSquareYandexOktaQualcommNvidia 19Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Investment managersWalter C.Price CFAHuachen Chen CFAMana
140、ging Director,Senior Portfolio ManagerManaging Director,Senior Portfolio ManagerWalter is a CFA charter-holder,Managing Director and Portfolio Manager on the AllianzGI technology team in San Francisco.He received his BS with Honours in electrical engineering from Massachusetts Institute of Technolog
141、y(M.I.T)and his BS and MS in management from the Sloan School at M.I.T.In 1971 he joined Colonial Management,an investment advisory firm in Boston,where he became a senior analyst responsible for the chemical industry and the technology area.Walter joined AllianzGI in 1974 as a senior securities ana
142、lyst in technology and became a principal in 1978.Since 1985,he has had increasing portfolio responsibility for technology stocks and has managed many technology portfolios.Walter is a current Director and past president of the M.I.T.Club of Northern California.He also heads the Educational Council
143、for M.I.T.in the Bay Area and is a past Chairman of the AIMR Committee on Corporate Reporting for the computer and electronics industries.Huachen is a Senior Portfolio Manager,and joined AllianzGI in 1984.He has covered many sectors within technology,as well as the electrical equipment and multi-ind
144、ustry areas.Since 1990,he has had extensive portfolio responsibilities for technology and capital goods stocks and has managed U.S.and Global portfolios with Walter Price.In 1994 Huachen became a principal of AllianzGI.Prior to AllianzGI,he worked for Intel Corporation from 1980 to 1983,where he had
145、 responsibilities for semiconductor process engineering.20OverviewMichael Seidenberg CFADanny SuDirector,Portfolio Manager/AnalystDirector,Portfolio Manager/AnalystMichael is a portfolio manager/analyst and a director with AllianzGI,which he joined in 2009.He received his BS in Business Administrati
146、on from the University of Colorado in 1990 and his MBA from Columbia Business School in 1996 with concentrations in Finance and Accounting.He began his investing career with Citadel Investment Group in 2001 covering the software space.Over the next eight years Michael broadened his coverage list to
147、include a variety of technology sectors.Prior to joining AllianzGI in Sept 2009,he worked at a number of hedge funds including Pequot Capital and Andor Capital.Danny is a portfolio manager/analyst and a director with AllianzGI,which he joined in 2000.He received his dual BS in Electrical Engineering
148、 and Economics from M.I.T.in 1993.He received his Master of Management degree from Kellogg Graduate School of Management at Northwestern in 1998.From 1993 to 1996,he was a business analyst with McKinsey&Company in Hong Kong.He has global responsibility for hardware,semiconductor,semiconductors capit
149、al equipment,and contract manufacturers.21Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Insights22Insights 23Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Digitisation takes off24InsightsConstrained by geopolitical u
150、ncertainty and weakening economic data,2019 was a dismal year for corporate investment.In the US,business investment dropped and Fed Chairman Jerome Powell blamed“sluggish growth abroad and trade developments”for companies reluctance to spend.1Usually,this is a tough environment for technology.Corpo
151、rate management tends to spend when they are optimistic and pull back when times are tougher.However,one area bucked the trend.In general,if companies were spending,they were spending on digitisation.Digitisation is not new but continued to build momentum in 2019 as companies have recognised the com
152、petitive advantage in rethinking existing business models and processes through the use of technology.The change is long-term and far-reaching,incorporating many aspects of technology,including artificial intelligence,the internet of things,cloud computing and software-as-a-service.Growing influence
153、In a slow-growth,hypercompetitive world,digitisation offers a means for companies to squeeze out stronger returns.Worldwide spending on the technologies and services that enable the digital transformation is forecast to reach almost$2 trillion by 2022.2 The same survey showed that this year,spending
154、 on digital strategies is likely to hit 10%or more of total spending for nearly a third of companies.It is clear that management teams need to embrace change or risk the long-term health of their business.When we wrote about it last year,we focused on the persistency of the trend and the companies t
155、hat were benefiting.Corporate performance this year confirmed that the trend is well-established with software-as-a-service companies in particular performing well and delivering stronger earnings.S,for example,exceeded its 2019 fourth quarter earnings expectations3 with chief executive Keith Block
156、attributing the success firmly to digitisation:“We had strong growth across our clouds and regions in the quarter as more companies turn to Salesforce as a trusted advisor in their digital transformations,”he said.As digitisation spreads,we see its influence reaching more sectors.For example,there h
157、as been increasing demand in the semiconductor industry for specialist chips.Different chips with more processing power are needed to accommodate and manage a new world of data.Advanced Micro Devices has been a 25Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 201
158、9notable beneficiary.It announced this year that Google would be using its server chips for its vast cloud data centres.In this way digital transformation is influencing who wins and who loses in the semiconductor industry.It also requires a different type of security.During the year,we built a posi
159、tion in Zscaler,which provides global cloud-based information security,covering web security,firewalls,sandboxing,antivirus and vulnerability management.It is designed to give granular control of user activity in cloud computing,mobile and Internet of things environments.It should be noted that digi
160、tisation has its losers as well.During 2019,certain areas saw considerable weakness as companies allocated less capital to supporting their existing infrastructure.Component makers such as DXC Technology and NetApp are re-engineering their businesses,but their legacy business is declining faster tha
161、n they had expected due to the pace of digitisation.Implementation problemsEqually,there were reminders that even the most insistent technology trends are not linear.It has become increasingly clear that digital transformation is not always being done well.In a new McKinsey Global Survey on digital
162、transformations4,more than eight in ten respondents said their organisations had undertaken some digital transformation in the past five years.However,it said that success in these transformations was proving elusive,with companies struggling to ensure digitisation improved performance and then sust
163、ained the improved performance.This was particularly true in certain industries-oil and gas,automotive,infrastructure,and pharmaceuticals.It attributed the failure to several factors:a piecemeal approach,poor coordination,a lack of buy-in from the business,the persistency of old model thinking.Never
164、theless,the companies that show the greatest level of success adopt more technologies rather than fewer:“The organisations with successful transformations are likelier than others to use more sophisticated technologies,such as artificial intelligence,the Internet of Things,and advanced neural machin
165、e-learning techniques.”More is more when it comes to digitisation.Certainly,it is not enough to buy the kit,businesses need to build the process around it to make it work.Also,it takes time to realise the rewards.This trend has only started in earnest over the past couple of years and the results wi
166、ll not be instant.It takes time to re-engineer a workforce.As McKinsey said:“What lies ahead is not a sudden robot takeover but a period of ongoing,and perhaps accelerated,change in how work is organised and the mix of jobs in the economy.”At the same time companies must consider business as usual.A
167、shutosh Bisht,senior research manager for IDCs Customer Insights&Analysis Group says:“Digital transformation involves managing the existing business and building for the future at the same time,something like changing the engine of the plane while in flight.”It is tougher than many enterprises had i
168、nitially believed.More is moreIn spite of these teething problems,companies are demonstrably not going backwards.They have come too far.The current estimates suggest that over 80%of enterprise workloads will be in the cloud by 2020 and 94%of enterprises already use a cloud service5.This is an inexor
169、able trend:companies are not going to rebuild in-house servers having moved to the cloud,or reintroduce an inflexible and costly upgrade cycle.The major advantage of digitisation is the ability to pick and mix requirements rather than support expensive in-house technology capability.They can move da
170、ta storage to the cloud and buy their software on a subscription basis.This means companies do not have to anticipate years in advance.This logic is still driving corporate thinking.Companies appear to be learning from their mistakes and rather than backtracking on digital innovation,doing it better
171、.Surveys suggest that digital transformation remains the top strategic priority for organisations across the globe.6 By 2023,digital transformation spending will amount to over 50%of all worldwide technology investment for the year.At the same time,companies are getting better at it.In a recent surv
172、ey,68%said they now considered themselves to be“intermediate”or“advanced”in terms of digital adoption.An EY survey7 shows that companies are under pressure from shareholders as well:“More than two-thirds of investors want companies to embrace disruptive innovation projects,even if they are risky and
173、 may not deliver short-term returns.The message here is clear:doing anything is better than doing nothing.Driven by people,powered by technology,this is business transformation for a better working world.”26InsightsThe likely winners Our view is that there are plenty of potential winners from the di
174、gitisation trend across the technology sector.At the forefront are the large cloud providers-Amazon,Google,Microsoft.Here we see a concentration into the larger names who can offer better pricing.Ultimately,cloud is a scale business.The software-as-a-service providers are also notable beneficiaries
175、of the digitisation trend.This includes companies such as Paycom Software,which provides online payroll and human resources technology.The company provides functionality and data analytics that businesses need to manage the complete employment life cycle.As at 31 December 2019 the software providers
176、 segment is a major position in the Trust,representing 34.4%of the portfolio.As cloud adoption progresses,there are companies poised to benefit.RingCentral provides cloud-based communications and collaboration solutions for businesses.This includes all-in-one cloud phone system with team messaging a
177、nd video conferencing.AMD makes the right chips for data storage and management,while Zscaler provides security.Digitisation is here to stay.There have been teething problems,but companies are getting better at implementing the solutions and realising the benefits.There are potential winners across
178、the value chain.1.https:/ 27Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Rise of the trillion-dollar companies.28Insights2019 was notable for the rise of a small number of global technology giants.For much of the year performance from the worlds stock marke
179、ts was dominated by a handful of behemoth companies.Their dominance has been driven,in part,by flows into index funds,which has become an issue not just for technology investors,but for all investors.Today,Microsoft,Apple,Amazon,Googles owner Alphabet,and Facebook are the largest companies in the US
180、.1 Apple and Microsoft have a combined market capitalisation of$2.1 trillion,approximately equal to the market cap of the Russell 2000 small cap index.Their size is undoubtedly a function of their historic success,but as these companies become a larger share of major indices,their share price moveme
181、nts are becoming self-reinforcing.Index funds have proved increasingly popular with investors looking for cheap,convenient access to markets.2019 saw them smash through the$10 trillion level,rising to$11.4 trillion by the end of November.2 This is 5x their level a decade ago.In 2019,US listed exchan
182、ge-traded funds(ETFs)a type of index investment-added another$326.3 billion with funds tracking the S&P 500 among the most popular.3Index weightingsTo highlight the extent of tech giants dominance of major global indices,it is worth looking at their weightings.Apple,with a market capitalisation of$1
183、.3 trillion(to end December 2019),forms around 3%of the MSCI World index,Microsoft another 2.6%and Amazon and Facebook 1.7%and 1.1%respectively.Between its A and C shares,Alphabet takes another 1.8%.That is around 10%of the global index just in five dominant technology companies.4 For US-focused ind
184、ices,there is even greater dominance.The S&P 500,for example,has around 10%in Apple and Microsoft,with technology as a whole making up around 23%5,mostly in these five companies.In the Nasdaq Composite,these five large companies form around one-third of the index.6Investors taking an index approach
185、to technology investment are taking a significant bet on a small number of large companies.At the same time,it means that the valuations of these technology companies have been supported to some extent by flows into passive funds.Should these flows start to reverse,it may leave the share prices vuln
186、erable.29Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019So does this matter?After all,Apple and Microsoft are fantastically successful companies,having delivered growing earnings for many years.They have placed themselves at the forefront of transformative te
187、chnical developments such as smartphones and the Cloud.Valuation versus potentialThe importance of these companies is not in dispute.The question is whether their values reflect their potential.Today,Apple is 3x the size of the nearest non-technology rival(JP Morgan).We can see this valuation stretc
188、h in the discrepancy between share price performance and earnings performance for some of these large companies.During 2019,Apples share price almost doubled.6 Its most recent earnings showed$64 billion in revenue for the three months to 30 September 2019.This was just 2%higher than a year ago.Perha
189、ps more worryingly,smartphone and Mac sales both declined.7This rise in share price,unmatched by a rise in earnings,has left the shares on a far higher multiple than a year ago.Apple is a large,mature,annuity-style business.Its recent iPhone developments have failed to excite users with iPhone sales
190、 down 9%in the most recent quarter.There are areas of potential growth for the company its services business continues to do well-but it is vulnerable to ongoing US/China hostility.These should give passive investors pause for thought.Microsoft has seen a similar phenomenon,albeit not to the same ex
191、tent.Its share price has risen a more modest 60%8 and its earnings have shown punchier growth than those of Apple.It has some strong sources of potential new revenue in its cloud business and wearables.However,its multiple has grown and it is not a high growth business in the same way as some of the
192、 software-as-a-service businesses,which are seeing earnings growth of 50-100%.The concern is that if share prices have been propped up by passive investment,gains may swiftly reverse should market sentiment change.After 10 years of more or less continued expansion in markets,this is plausible.Equall
193、y,the US has been the top-performing market for a number of years,which has driven flows.Should the US market lose its lustre,investors could drift away from the market,pulling capital from its largest and most liquid stocks.As we see it,this is a risk that investors may not have appreciated.The swe
194、et spot for growthWhile many large companies have been great businesses,inevitably,growth is harder the larger a company becomes.We have a flexible approach and over the Companys history,we have had periods of favouring megacaps.However,for a number of years our focus has been on mid cap companies.T
195、o our mind,the most compelling argument for technology investment is to find new sources of innovation and growth in the global economy.Companies that are doing something new have a window to make exceptional returns before the rest of the market catches up and competitors emerge.To our mind,these a
196、re far more likely to be found among medium-sized companies than among the large caps,where the growth trajectory is well-established and well-known and therefore likely to be fully reflected in the share price.In recent years,the most exciting software-as-a-service companies and the major security
197、names have all been in the mid-cap area.30InsightsWe believe it is where many of the more exciting companies will emerge in future.Companies in the mid-cap area have proof of concept and are established businesses,but often still have their strongest growth ahead of them.Disruption is getting faster
198、:Sectors such as automobiles,advertising,security,retail and manufacturing are all being transformed by advances in technology.We find a lot of areas of this innovative disruption among the mid-caps.Environmental,social and governance(ESG)considerationsThere is another consideration worth noting for
199、 passive investors.Can they be sure that an index manager is paying attention to ESG considerations?In general,Apple and Microsoft have been strong on governance it has been part of their success.Microsoft has managed to shake off its predatory reputation and become a leader for corporate efficiency
200、.Apple has led the way in terms of privacy and been focused on giving money back to shareholders.However,this is not necessarily true for some of the other technology giants who have rubbed regulators and tax authorities up the wrong way.Should these companies be left less accountable because the in
201、vestor base is largely passive,it could spell bad news for shareholders.The technology giants are at the top for a reason.They are,in general,excellent companies that have built unrivalled technology.However,we are mindful of the distorting impact on their valuations from index funds and the potenti
202、al repercussions if flows reverse.1.https:/ 31Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Investment Managers Review32Strategic ReportDemand for bespoke semiconductors grew over the year.Artificial intelligence,for example,requires large capacity for data
203、processing.33Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Investment Managers ReviewIt was a year of contrasts for the technology sector.Although aggregate performance was positive,there were two distinct phases.The first favoured high growth companies;the
204、second saw investors shift to more economically-sensitive areas.One trend persisted,however-the largest stocks grew even larger as flows into index funds influenced pricing.Economic backdropThe first part of the year was dominated by concerns on trade tensions and declining economic data.Global grow
205、th in 2019 recorded its weakest pace since the global financial crisis a decade ago1 and this was particularly marked in the first half of the year,prompting central banks around the world to take action.Manufacturing was the notable weak spot as the US/China trade war weighed on activity.The weakne
206、ss of manufacturing behemoth Germany was emblematic of a wider malaise,with key industries under pressure and investment levels weak.For Germany,the dominant auto sector saw a perfect storm of regulatory change,emissions standards and declining consumer demand.Both China and the US saw PMI data fall
207、 below the 50-mark that indicates contraction.2 3In the manufacturing sector and beyond,global geopolitical uncertainty prompted caution among corporate decision makers.Firms proved reluctant to undertake long-term spending projects,with purchases of machinery and equipment decelerating.Nevertheless
208、,the digitisation trend remained largely intact as firms saw the financial and competitive advantages of selective investment in technology.In the face of these gloomier signals from the global economy,monetary policy remained accommodative.The Federal Reserve changed course during 2019,initially ha
209、lting its ambitions to normalise rates;and then implementing quarter-point cuts in July,September and October.In its December meeting,Fed chair Jerome Powell signalled rates would now stay on hold throughout 2020.4The Galaxy Z Flip from Samsung Electronics is the first folding smartphone to use a gl
210、ass display.34Investment Managers ReviewTowards the end of the year,there were signs that central bank measures were having an effect with green shoots of recovery emerging.Loose monetary policy helped compensate for the waning impact of President Trumps tax cuts.As importantly,expectations of a US/
211、China trade deal revived in September.With the prospect of a deal came higher expectations for global growth.Markets Overall,it was a good year for the technology sector.The tech-heavy Nasdaq outpaced the S&P 500 and Dow Jones Industrial indices.Our benchmark index,the Dow Jones World Technology Ind
212、ex(sterling adjusted,total return),delivered 39.0%.However,the gains were not universally distributed,with the lions share of fund flows moving into the largest companies in the sector.In the early part of the year,it was the higher growth stocks that made progress.Amazon,for example,saw its share p
213、rice rise from$1,656 a share to a peak of over$2,000 in July.5 It was a familiar story.Fearful of a downturn in global economic growth,investors sought the relative safety of reliable earnings and a compelling growth story.However,there was a discernible switch in sentiment from September onwards.Th
214、is benefited cyclical and value companies at the expense of higher growth companies.Previously unloved areas such as hardware and semiconductors performed well.Flows into index funds increased over the year and this had an influence on pricing.The largest stocks in the index saw significant multiple
215、 expansion.In some cases,this came in spite of weaker earnings.This was also a year in which investors grew sceptical of the valuations in private equity.A number of high profile companies came to market,but failed to deliver for optimistic investors.The valuation gap between public and private mark
216、ets was exposed.There remain,nevertheless,some notable secular trends and companies exposed to those trends did well.In particular,the digitisation trend continued to show momentum.Software-as-a-service providers had a good year.This rippled out into the semiconductor industry,with specialist cloud
217、chip makers,such as Advanced Micro Devices also benefiting from the trend.Streaming service Disney+launched during the year to compete with established rivals such as Netflix,Hulu and Amazon Prime Video.35Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Apples
218、iPhone 11 range,including the triple-camera 11 Pro,launched in September 2019.The iPhone 11 became the second-best selling smartphone globally in 2019,despite only being made available for fewer than four months of the whole year.36Investment Managers ReviewTechnology developmentsIPOsIt was the year
219、 that a number of high-profile technology unicorns finally came to market,including Lyft,Pinterest and Uber.However,it also exposed the ambitious valuations set for many of these companies.As a result,in spite of good earnings performance,the share prices were weak.A high-profile casualty was WeWork
220、,which pulled its flotation after struggling to attract investors,who proved disinclined to support a technology-type valuation for a property company.6 Apples iPhone 11 rangeThe latest iPhone incarnation brought more cameras and longer-lasting batteries.5G was notably absent,despite rivals introduc
221、ing compatible smartphones.It was generally favourably reviewed and early reports suggested sales may be better than expected across the US and Western Europe.However,this has yet to be reflected in Apples results.7Security breaches and technical glitches at FacebookIt was a year of disruption for F
222、acebook.Alongside the usual hum of regulatory threats,it also experienced security breaches and technical glitches.March saw the group experience 14 hours of disruption,its“most severe outage”to date.8 May saw WhatsApp admit that the app had been used to install surveillance software on the phones o
223、f around 1,400 users.There were further technical problems in July,with users unable to upload photos and videos.Streaming warsNetflix saw its streaming dominance challenged as,among others,Disney Plus launched a streaming service,giving access to more than 500 movies and 7,500 TV episodes.9 Microso
224、fts revivalMicrosoft CEO Satya Nadella was the Financial Times person of the year for 2019,praised for his stunning wealth creation.10 His venture into cloud computing has been a resounding success.The company scored a coup when it won the high-profile contract to provide the Pentagon with cloud com
225、puting and artificial intelligence services,pipping hotly-tipped Amazon to the prize.The deal could be worth as much as$10bn(7.7bn)over time and presents a good platform to pitch Microsoft beat Amazon to win a contract to provide the Pentagon with cloud computing and artificial intelligence services
226、.37Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019the firms Azure services to other government departments and private companies.Performance It was a strong year for the Company in absolute terms,with our net asset value rising 28.8%.However,we lagged our ben
227、chmark by 10.2%.Although our investments are not driven by the weightings of individual companies in the benchmark,we are aware of the benchmark and use it to measure the success of our performance.As such,this was disappointing,but there were clear reasons for the discrepancy.The Company had long f
228、avoured the mid cap area,believing this to be the sweet spot for innovation and growth.As a result,we are typically underweight the mega-caps.With this in mind,the most dramatic detractor from overall performance this year was our 10.1%underweight to Apple.Apple gained around 82%over the year and we
229、 were very underweight.The dominance of these large companies continues to prove a challenge for technology investors.On the one hand,they have become huge parts of the index,so their performance tends to dominate relative performance for the Company,either good or bad.At the same time,their share p
230、rices are influenced by passive flows.This year saw a significant rise in Apples share price while earnings were lacklustre.Microsoft was another major detractor,for similar reasons.While we held an average weight of 5.3%in Microsoft and believe it is a business with attractive qualities,the benchma
231、rk weighting is 12%.From a risk management point of view,this would be a lot to hold in an individual stock and not the size of position we favour.As it stands,we keep our conviction approach even if it means there will be moments of pain.Our strongest performers over the year were clustered into th
232、e software-as-a-service sector.Corporate digitisation continues apace and these stocks did well over the year,beating earnings expectations and improving and diversifying their businesses.Otka,Paycom Software and Teradyne were three of the most significant contributors to overall performance.Otka ha
233、d another strong year as cloud security software saw widespread adoption.It is built on Workforce and customer identity specialist Okta achieved$141 million in sales and 49%growth year over year.38Investment Managers Reviewtop of the Amazon web services cloud,helping companies manage employee access
234、 to corporate applications.The company not only exceeded market expectations on sales,which hit$141 million,representing 49%growth year over year,but also raised its outlook for the year ahead.11We opened our position in Teradyne in 2017 and it has subsequently proved a strong performer for the trus
235、t.Alongside its core business,which is semiconductor testing,it makes small robots,nicknamed co-bots.They are not designed to replace humans,but to remove some repetitive tasks attaching two components together,for example.The robots are both flexible and trainable.The company beat earnings expectat
236、ions for the year,as ongoing demand for 5G infrastructure and Flash memory testing drove Semiconductor Test performance.12Semiconductor specialism became a theme over the year as demand for bespoke semiconductors grew.Artificial intelligence,for example,requires large capacity for data processing,wh
237、ich in turn requires high performance chips.Semiconductor companies had performed poorly for much of the year,but picked up in the final quarter and it was those that could meet specialist needs that led the way.In the portfolio,this was seen in the strong relative performance of Taiwan Semiconducto
238、r,which we bought during the year,and Advanced Micro Devices(AMD).Apple continues to use Taiwan Semiconductor to produce chips for iPhones,while AMD is benefiting from the move to the cloud.The trade war has been a headwind for the semiconductor sector,but this is more than reflected in valuations.T
239、he trade war had an impact on technology in other ways,notably among the component makers.Companies such as Netapp and DXC had been facing weakening demands for their products anyway as companies moved to the cloud.They had been trying to transition to growth areas,in some cases successfully,but the
240、 slowdown in their legacy business was much faster than expected as companies grew increasingly disinclined to spend on existing infrastructure.For these groups,some resolution in the trade war will be welcome.In general,we avoided many of the IPOs coming to market.While they were often Semiconducto
241、r testing company Teradyne beat earnings expectations for the year.39Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019exciting,high growth businesses,the valuations are simply too high and even if they deliver on expectations,it is difficult to see how the shar
242、e prices can make significant headway.One exception was cybersecurity group Crowdstrike,in which we built a small position.We believe it has potential,but it was a detractor from performance over the year.OutlookHere,we focus on a single year in technology,but it is important to remember that techno
243、logys influence continues to grow,year after year.It disrupts more industries,from retail to autos,and on into financial services and beyond.Our universe expands each year,with exciting companies emerging and evolving.Technology investment is about future-proofing your portfolio,ensuring you have to
244、morrows winners rather than yesterdays.1.https:/blogs.imf.org/2019/12/18/2019-in-review-the-global-economy-explained-in-5-charts/2.https:/ introduced its HoloLens 2 mixed reality smartglasses technology in November.40Investment Managers ReviewNew holding Taiwan Semiconductor produced strong relative
245、 performance.Apple continues to use Taiwan Semiconductor to produce chips for iPhones,41Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019 Sector Headquarters Value of holding Percentage of portfolioMicrosoft develops,manufactures,licenses,and supports a range o
246、f hardware and software.Since Satya Nadella took over as CEO in 2014,the company has moved away from its traditional hardware business to focus on its Azure cloud computing platform.As a result,Microsoft revenue is now split roughly equally between its three personal computing,cloud and business pro
247、cessing divisions.Facebook hit 2.4bn monthly active users in 2019.It is increasingly monetising these users through advertising.It has faced technology problems this year,but has worked hard to address criticism over its dissemination of fake news,hate messages and violence.It has seen significant g
248、rowth via Instagram and also launched Facebook Dating during the year.Taiwan Semiconductor is the worlds largest dedicated semiconductor manufacturer.It has over half the market for semiconductor production outsourcing and counts Qualcomm,Apple,Nvidia and Advanced Micro Devices(AMD)among its custome
249、rs.It makes the central processing units for the iPhone and last year reported$1,031bn in revenue.MicrosoftAppleFacebookTaiwan Semiconductor1234SoftwareWashington,USA 45,637,0008.0%Interactive Media&ServicesCalifornia,USA 24,845,0004.4%Technology,Hardware Storage&PeripheralsCalifornia,USA 26,022,000
250、4.5%Semiconductors&Semiconductor EquipmentTaiwan 20,526,000 3.6%Top 20 HoldingsApple is a leading global consumer electronics company,making personal computers,software,mobile communications devices,and networking solutions.Its market capitalisation is now$1.327 trillion,with revenues of almost$265.
251、6bn in 2018(2.).Over one billion people have bought an iPhone,its flagship product,since it launched a decade ago.42Investment Managers ReviewTeradyne was a new holding for the trust in 2017.Its core business is semi-conductor testing,but has a growing robotics business.It makes small robots,nicknam
252、ed co-bots,designed to take on some of the repetitive tasks attaching two components together,for example.They are designed to improve the efficiency of the manufacturing process,helping humans to complete tasks.Samsung Electronics is a South Korean multinational electronics company,and is the world
253、s largest manufacturer of mobile phones and smartphones.Significant improvements in its smartphone range have seen it emerge as a major rival to Apple in recent years.The company also manufacturers televisions,cameras,and electronic components.Paycom Software Teradyne Mastercard Samsung Electronics
254、Co 5678SoftwareOklahoma,USA19,511,000 3.4%Semiconductors&Semiconductor EquipmentMassachusetts,USA 15,133,000 2.7%IT ServicesNew York,USA16,243,000%2.9%Technology,Hardware Storage&PeripheralsSouth Korea14,905,0002.6%Paycom is an US online payroll and human resource technology provider.The company pro
255、vides functionality and data analytics that businesses need to manage the complete employment life cycle.Its software improves productivity and this has been reflected in Paycoms impressive growth rates,as businesses look to re-engineer their systems using technology to create efficiency.Its share p
256、rice more than doubled in 2019.Mastercard operates a global payment processing network,connecting consumers,financial institutions,retailers,governments and businesses.It operates across more than 210 countries and territories.In recent years,it has built a suite of digital payment products,includin
257、g its Digital Enablement Service.In 2019,the company acquired the Danish real-time payments company Nets for$3.2bn,as part of its strategy to expand beyond card payments.43Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019SoftwareCalifornia,USA13,549,0002.4%Soft
258、wareCalifornia,USA12,388,0002.2%SoftwareCalifornia,USA13,370,0002.4%Semiconductors&Semiconductor EquipmentCalifornia,USA12,360,0002.2%Security group Fortinet develops and markets cybersecurity software and appliances and services,such as firewalls,anti-virus,intrusion prevention and endpoint securit
259、y.Its flagship products is FortiGate,an enterprise firewall platform.It was founded in 2000 by brothers Ken and Michael Xie and now has over 425,000 customers.Ringcentral does as its name suggests,providing an all-in-one cloud phone system with team messaging and video conferencing,alongside other c
260、loud-based communications and collaboration solutions for businesses.It has made selective acquisitions in recent years,including Dimelo,a Paris-based OmniChannel contact centre provider in October 2018 and Connect First,a customer engagement provider in January 2019.FortinetRingcentral AutodeskAdva
261、nced Micro Devices 9101112 Sector Headquarters Value of holding Percentage of portfolioAutodesk is a computer-aided design company.It makes software for the architecture,engineering,construction,manufacturing,media,education,and entertainment industries.It recently switched its business model from l
262、icensed software to subscriptions sold and delivered via the cloud.It is now seeing subscription growth of around 16%year on year.AMD has built specialism in high performance chips,designed to manage and store big data.Independent benchmarks suggest that its chips deliver more than twice the perform
263、ance of close rival Intels for each dollar spent,and four times as much for high-performance computing.This is vitally important in a world rapidly moving to the cloud.44Investment Managers ReviewAlphabet,the parent company of Google,the worlds leading search engine.The group remains a primary benef
264、iciary of the secular shift to online spending.It also owns YouTube.Founders Larry Page and Sergey Brin stepped down this year,to be replaced with Sundar Pichai.However,they remain controlling shareholders of the business.“I hope he likes what we have done in his name”said Elon Musk about Nikola Tes
265、la.Nikola Tesla,inventor of the electric motor,plus a pioneer in radar,radio and x-rays,inspired Elon Musk to push the boundaries of conventional science and engineering and gave his pioneering electric car company its name.Tesla continues to dominate electric car manufacturing and,through its Solar
266、City subsidiary,solar panel manufacturing.The company has recently established a European base in Germany.Tesla AlphabetZscaler Square13141516AutomobilesCalifornia,USA12,034,0002.1%Internet Software&ServicesCalifornia,USA 11,471,000 2.0%SoftwareCalifornia,USA11,375,0002.0%IT ServicesCalifornia,USA 1
267、0,463,000 1.9%Zscaler is a global cloud-based information security company,founded in 2008 by serial entrepreneur Jay Chaudhry.It provides a cloud-based information security platform and has the worlds largest security cloud.It also provides next generation firewalls,sandboxing,SSL inspection,antivi
268、rus and vulnerability management and is geared into growth sectors such as cloud computing,mobile and the Internet of things environments.Square helps different types of merchants run their business better-from secure credit card processing to faster access to cash.It makes software and hardware pay
269、ments products,including Square Register and Square Reader.It also has a number of services for small business,such as Square Capital,a financing program,and Square Cash,a person-to-person payments service,plus Square Payroll.45Allianz Technology Trust PLC Annual Financial Report for the year ended
270、31 December 2019 Sector Headquarters Value of holding Percentage of portfolioInternet Software&ServicesMoscow,Russia10,425,0001.8%Semiconductors&Semiconductor EquipmentCalifornia,USA9,626,0001.7%Internet Software&ServicesCalifornia,USA10,184,0001.8Semiconductors&Semiconductor EquipmentCalifornia,USA
271、9,401,0001.7%Russias multinational internet company owns the largest search engine in the Russia market,with a market share of over 50%.It also operates across transport,eCommerce,mobile applications and online advertising.Notably,Uber and Yandex merged their businesses in Russia,Kazakhstan,Azerbaij
272、an,Armenia,Belarus and Georgia.It has recently conducted tests of autonomous vehicles in Moscow.Okta provides cloud software,built on top of the Amazon web services cloud,that helps companies manage employee passwords.It came to the public markets in 2017,having been founded in 2009 by a team of for
273、mer S executives led by Todd McKinnon.Okta sells a range of services,including a single sign-on option that acts as a gateway to a number of different systems,including Gmail,S and Slack.Yandex Okta Qualcomm Nvidia Corp 17181920Qualcomm is a US-based multinational semiconductor and telecommunication
274、s equipment company.Its core business is chip-making and the bulk of its profit comes from patent licensing businesses.Chinese telecoms group Huawei is a major customer,which has given the group some problems during the trade war,but the group posted stronger than expected results for the final quar
275、ter of its fiscal year.Nvidia creates graphic chips used for video games and cloud infrastructure.In theory it should be in a sweet spot for growth,with gaming booming and cloud adoption accelerating.However,the group has had to contend with the US trade tensions,plus falling demand from China,which
276、 has implemented gaming restrictions and weakening smartphone sales.It has recently expanded its key markets-gaming,professional visualisation,data centres,and auto to include artificial intelligence.46Investment Managers ReviewStock StoriesMicrosoft develops,manufactures,licenses,and supports a wid
277、e range of software products for computing devices.When Satya Nadella took over as CEO in 2014,the company appeared to be drifting into irrelevance.It had plenty of cash,but its legacy business appeared increasingly irrelevant and attempts to compete in search and smartphones had come to nothing.Ove
278、r the past five years,Nadella has carefully steered the company away from its traditional hardware business,focusing instead on the high growth cloud computing market.The move has been more successful than almost anyone anticipated.In the quarter to 30 September,the companys intelligent cloud busine
279、ss saw revenues jump 27%,to$10.8bn.Microsoft recently won a$10bn contract from the US Department of Defense.Amazon had been favourite to win the bid,so it represented a satisfying competitive victory as well as putting the group in a prime position to pitch the firms Azure services to other governme
280、nt departments and private companies.Microsoft has also managed to shed its reputation for corporate arrogance,responding to shareholder demands for a more independent board and keeping a low profile when its fellow technology giants were under attack.The company has achieved the unusual feat of sus
281、taining its relevance over multiple decades.MicrosoftSector SoftwareHeadquarters Washington USAValue of holding 45,637,000%of portfolio 8.0%47Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Paycom SoftwareSector SoftwareHeadquarters Oklahoma USAValue of holdin
282、g 19,511,000%of portfolio 3.4%Paycom is an US online payroll and human resource technology provider.The company provides functionality and data analytics that businesses need to manage the complete employment life cycle.Its software frees companies from the tedium of time sheets,holiday requests and
283、 payroll,all of which suck time and resources from the business.It is an easy win for companies looking to improve productivity and this has been reflected in Paycoms impressive growth rates.It has beaten market expectations in each of its four most recent quarterly earnings statements and earnings
284、per share are showing growth of over 30%.It is a key winner from the digitisation trend as businesses look to re-engineer their systems using technology to create efficiency.Paycoms customers pay quarterly or monthly,which delivers a regular revenue stream.Its share price more than doubled in 2019.4
285、8Investment Managers ReviewAdvanced Micro DevicesSector Semiconductors&Semiconductor EquipmentHeadquarters California,USAValue of holding 12,360,000%of portfolio 2.2%AMD has seen a major turnaround under the stewardship of chief executive Lisa Su.Five years ago,after a long period of underperformanc
286、e,Su and IBM colleague Mark Papermaster decided to redesign the groups product range from the bottom up.It was a gamble and one that also required strong performance from manufacturing partner Taiwan Semiconductor.It appears to have paid off.It has seen a significant re-rating in its stock price,whi
287、ch has risen 19x over the past five years.Its most recent coup was Google choosing AMDs server chips for its vast cloud data centres.Microsoft,Amazon,Tencent and Baidu are already customers,giving it a major foothold in the major cloud and internet giants.The company has built specialism in high per
288、formance chips,designed to manage and store big data.Independent benchmarks suggest that AMD chips deliver more than twice the performance of close rival Intels for each dollar spent,and four times as much for high-performance computing.This is vitally important in a world rapidly moving to the clou
289、d.It continues to draw scepticism from some analysts,who have seen AMD build up a technical advantage only to lose it again,but Su and Papermaster have already exceeded expectations and may do so again.49Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019Investme
290、nt Portfolioat 31 December 2019Geographical breakdownRegionValuation 000%of Invested Funds United States 446,274 78.6 Netherlands 28,498 4.9 Taiwan 20,526 3.6 United Kingdom 16,049 2.8 South Korea 14,905 2.6 Germany 13,350 2.4 Cayman Islands 10,230 1.9 Singapore 6,331 1.1 Switzerland 5,956 1.1 Swede
291、n 5,815 1.0 As cash is excluded and the weightings for each country are rounded to the nearest tenth of a percent,the aggregate weights may not equal 100%.Sector breakdownSoftwareInternet Software&ServicesInteractive Media&ServicesIT ServicesSemiconductors&Semiconductor EquipmentInternet&Direct Mark
292、eting RetailTechnology,Hardware Storage&PeripheralsCommunications EquipmentAutomobilesEntertainmentElectronic Equipment Instruments&ComponentsRetailingRoad&RailEquity Real Estate InvestmentHealth Care TechnologyElectrical EquipmentAs cash is excluded and the weightings for each sector are rounded to
293、 the nearest tenth of a percent,the aggregate weights may not equal 100%.34.4%19.0%10.6%8.0%6.9%5.8%3.8%2.2%2.1%2.1%0.2%0.5%0.7%0.7%1.4%1.6%50Investment Managers ReviewInvestmentSector#Sub Sector#Country Valuation 000%of Portfolio MicrosoftSoftwareSystems SoftwareUnited States 45,637 8.0 AppleTechno
294、logy,Hardware Storage&PeripheralsTechnology,Hardware Storage&PeripheralsUnited States 26,022 4.5 FacebookInteractive Media&ServicesInteractive Media&ServicesUnited States 24,845 4.4 Taiwan SemiconductorSemiconductors&Semiconductor EquipmentSemiconductorsTaiwan 20,526 3.6 Paycom SoftwareSoftwareAppli
295、cation SoftwareUnited States 19,511 3.4 MastercardIT ServicesData Processing&Outsourced ServicesUnited States 16,243 2.9 TeradyneSemiconductors&Semiconductor EquipmentSemiconductor EquipmentUnited States 15,133 2.7 Samsung ElectronicsTechnology,Hardware Storage&PeripheralsTechnology,Hardware Storage
296、&PeripheralsSouth Korea 14,905 2.6 FortinetSoftwareSystems SoftwareUnited States 13,549 2.4 RingcentralSoftwareApplication SoftwareUnited States 13,370 2.4 Top Ten Investments 209,741 36.9 AutodeskSoftwareApplication SoftwareUnited States 12,388 2.2 Advanced Micro DevicesSemiconductors&Semiconductor
297、 EquipmentSemiconductorsUnited States 12,360 2.2 TeslaAutomobilesAutomobile ManufacturersUnited States 12,034 2.1 Alphabet IncInternet Software&ServicesInternet Software&ServicesUnited States 11,471 2.0 ZscalerSoftwareSystems SoftwareUnited States 11,375 2.0 SquareIT ServicesData Processing&Outsourc
298、ed ServicesUnited States 10,463 1.9 YandexInternet Software&ServicesInternet Software&ServicesNetherlands 10,425 1.8 OktaInternet Software&ServicesInternet Software&ServicesUnited States 10,184 1.8 QualcommSemiconductors&Semiconductor EquipmentSemiconductorsUnited States 9,626 1.7 NvidiaSemiconducto
299、rs&Semiconductor EquipmentSemiconductorsUnited States 9,401 1.7 Top Twenty Investments 319,468 56.3 WorkdaySoftwareApplication SoftwareUnited States 8,901 1.6 MongoDBIT ServicesInternet Services&InfrastructureUnited States 8,805 1.5 NetflixEntertainmentMovies&EntertainmentUnited States 8,492 1.5 Sna
300、pInteractive Media&ServicesInteractive Media&ServicesUnited States 8,197 1.4 AvevaSoftwareApplication SoftwareUnited Kingdom 7,458 1.3 NemetschekSoftwareApplication SoftwareGermany 7,287 1.3 AlibabaInternet Software&ServicesInternet Software&ServicesCayman Islands 7,285 1.3 VisaIT ServicesData Proce
301、ssing&Outsourced ServicesUnited States 7,251 1.3 SplunkSoftwareApplication SoftwareUnited States 6,926 1.2 ZendeskSoftwareApplication SoftwareUnited States 6,473 1.1 Top Thirty Investments 396,543 69.8 Full portfolio list 51Allianz Technology Trust PLC Annual Financial Report for the year ended 31 D
302、ecember 2019InvestmentSector#Sub Sector#Country Valuation 000%of Portfolio Kla TencorSemiconductors&Semiconductor EquipmentSemiconductor EquipmentUnited States 6,336 1.1 FlexElectronic Equipment Instruments&ComponentsElectronic Manufacturing ServicesSingapore 6,331 1.1 STMicroelectronicsSemiconducto
303、rs&Semiconductor EquipmentSemiconductorsNetherlands 6,322 1.1 Lam ResearchSemiconductors&Semiconductor EquipmentSemiconductor EquipmentUnited States 6,293 1.1 Coupa SoftwareSoftwareApplication SoftwareUnited States 6,217 1.1 Infineon TechnologiesSemiconductors&Semiconductor EquipmentSemiconductorsGe
304、rmany 6,063 1.1 TemenosSoftwareApplication SoftwareSwitzerland 5,956 1.1 Akamai TechnologiesIT ServicesInternet Services&InfrastructureUnited States 5,942 1.1 AdyenIT ServicesData Processing&Outsourced ServicesNetherlands 5,921 1.0 ASMLSemiconductors&Semiconductor EquipmentSemiconductor EquipmentNet
305、herlands 5,830 1.0 Top Forty Investments 457,754 80.6 AtlassianSoftwareApplication SoftwareUnited Kingdom 5,830 1.0 EricssonCommunications EquipmentCommunications EquipmentSweden 5,815 1.0 CognexElectronic Equipment Instruments&ComponentsElectronic Equipment InstrumentsUnited States 5,804 1.0 Take-T
306、wo Interactive SoftwareEntertainmentInteractive Home EntertainmentUnited States 5,753 1.0 Micron TechnologySemiconductors&Semiconductor EquipmentSemiconductorsUnited States 5,733 1.0 AInternet&Direct Marketing RetailInternet&Direct Marketing RetailUnited States 5,613 1.0 ProofpointSoftwareSystems So
307、ftwareUnited States 5,457 1.0 SmartsheetSoftwareApplication SoftwareUnited States 5,421 1.0 Pure StorageTechnology,Hardware Storage&PeripheralsTechnology,Hardware Storage&PeripheralsUnited States 5,264 0.9 RokuEntertainmentMovies&EntertainmentUnited States 4,538 0.8 Top Fifty Investments 512,982 90.
308、3 Uber TechnologiesRoad&RailTruckingUnited States 4,450 0.8 CreeSemiconductors&Semiconductor EquipmentSemiconductorsUnited States 4,193 0.7 Viavi SolutionsCommunications EquipmentCommunications EquipmentUnited States 4,191 0.7 EquinixEquity Real Estate InvestmentSpecialized REITsUnited States 4,127
309、0.7 CrowdstrikeSoftwareSystems SoftwareUnited States 3,994 0.7 Bloom EnergyElectrical EquipmentHeavy Electrical EquipmentUnited States 3,953 0.7 LyftRoad&RailTruckingUnited States 3,189 0.6 HubspotSoftwareApplication SoftwareUnited States 3,089 0.6 JD.comInternet&Direct Marketing RetailInternet&Dire
310、ct Marketing RetailCayman Islands 2,945 0.6 Palo Alto NetworksCommunications EquipmentCommunications EquipmentUnited States 2,935 0.5 Top Sixty Investments 550,048 96.9 DocusignSoftwareApplication SoftwareUnited States 2,935 0.5 Veeva SystemsHealth Care TechnologyHealth Care TechnologyUnited States
311、2,926 0.5 AlteryxSoftwareApplication SoftwareUnited States 2,905 0.5 ZyngaEntertainmentInteractive Home EntertainmentUnited States 2,829 0.5 ComputacenterIT ServicesIT Consulting&Other ServicesUnited Kingdom 2,761 0.5 TwilioIT ServicesInternet Services&InfrastructureUnited States 2,655 0.4 GrubhubRe
312、tailingInternet&Direct Marketing RetailUnited States 875 0.2 Total Investments 567,934 100.0#GICS Industry classifications52Directors ReviewDirectorsReviewThe ongoing global rollout of 5G infrastructure should benefit the manafacturers and testers of semiconductors.53Allianz Technology Trust PLC Ann
313、ual Financial Report for the year ended 31 December 2019DirectorsRobert Jeens,MA(Cantab),FCAChairman of the Board,the Nomination Committee and the Management Engagement Committee.Member of the Remuneration Committee.Robert joined the Board on 1 August 2013 and became Chairman on 2 April 2014.Followi
314、ng 12 years withTouche Ross,where he was an audit partner,Robert became Finance Director of Kleinwort Benson Group andsubsequently Woolwich plc.He has extensive experience of the asset management industry and is currently Chairman of Henderson European Focus Trust plc and a non-executive director of
315、 JPMorgan Russian Securities plc and Chrysalis VCT plc.He has also had experience of technology companies,including as Chairman of nCipher plc and as a Non-Executive Director of Dialight plc,and is currently Chairman of Remote Media Group,a cloud-based digital signage company.Humphrey van der Klugt,
316、BSc(Hons),FCASenior Independent Director and Chairman of the Audit Committee and Remuneration Committee.Member of the Nomination Committee and the Management Engagement Committee.Humphrey joined the Board on 1 July 2015 and became Chairman of the Audit Committee and Senior Independent Director on 14
317、 April 2016.He is currently a director of JPMorgan Claverhouse Investment Trust plc and Worldwide Healthcare Trust PLC.He is an experienced investment manager and investment company director,having previously served as a director of trusts managed by BlackRock,Fidelity and Standard Life Aberdeen.Hum
318、phrey initially qualified as a chartered accountant with Peat Marwick Mitchell&Co.(now KPMG)in 1979,and in 2004 retired from a long career as a fund manager and director of Schroder Investment Management LimitedMeeting attendance by the Directors during the year ending 31 December 2019 was as follow
319、s:BoardAudit CommitteeNomination CommitteeRemuneration CommitteeManagement Engagement CommitteeNumber of meetings in the year52211Robert Jeens521211Humphrey van der Klugt52211Richard Holway52211Elisabeth Scott52211Neeta Patel220111All Directors attended the Annual General Meeting of the Company.None
320、 of the Directors has a service contract with the Company.The terms of their appointment are detailed in a letter sent to them when they join the Board.These letters are available for inspection on request to the Company Secretary.1 Robert Jeens attendance at the Audit Committee is by invitation as
321、he is not a Committee member.2 Neeta Patel joined the Board on 1 September 2019.54Directors ReviewElisabeth Scott,MA(Hons),MScNeeta Patel,MA(Oxon),MBA,MScMember of the Audit Committee,the Nomination Committee,Remuneration Committee and the Management Engagement Committee.Member of the Audit Committe
322、e,the Nomination Committee,Remuneration Committee and the Management Engagement Committee.Elisabeth joined the Board on 1 February 2015.She was managing director and country head of Schroder Investment Management(Hong Kong)Limited from 2005 to 2008 and Chairman of the Hong Kong Investment Funds Asso
323、ciation from 2005 to 2007.She worked in the Hong Kong asset management industry from 1992 to 2008.She is a non-executive director and deputy Chairman of the Association of Investment Companies,and a non-executive director of Fidelity China Special Situations plc,Dunedin Income Growth Investment Trus
324、t plc and Chairman of India Capital Growth Fund plc.Neeta joined the Board on 1 September 2019.She is currently the CEO of the Centre for Entrepreneurs,a board advisor for Tech London Advocates and an entrepreneur mentor-in-residence at London Business School.She is also a member of the newly appoin
325、ted advisory board at City Ventures,the entrepreneurship hub at City University,London and a non-executive director for various start-ups.55Allianz Technology Trust PLC Annual Financial Report for the year ended 31 December 2019IntroductionThis Strategic Report is provided in accordance with The Com
326、panies Act 2006(Strategic Report and Directors Report)Regulations 2013 as amended and is intended to provide information about the Companys strategy and business needs,its performance and results for the year,and the information and measures which the Directors use to assess,direct and oversee Allia
327、nz Global Investors GmbH,UK Branch(the Investment manager)in the management of the Companys activities.This report is intended to be read in conjunction with the Directors Report and is not intended to duplicate such.It is also intended to supplement strategic commentary as set out in the Chairmans
328、Statement on page 5 and in the Investment Managers review on page 34.Strategy and Business ModelThe objective of the Company is to provide shareholders with an investment in equity securities of quoted technology companies on a worldwide basis with the aim of achieving long-term capital growth.The C
329、ompany carries on business as an investment trust and maintains a primary listing on the London Stock Exchange.Investment trusts are collective investment vehicles constituted as closed ended public limited companies.The Company is managed by a board of non-executive Directors and the management of
330、the Companys investments is delegated to the Investment Manager.The Companys day-to-day functions,including administrative,financial and share registration services are carried out by duly appointed third party service providers.The Companys Custodian and Depositary moved from BNY Mellon to HSBC Ban
331、k plc as Custodian and HSBC Securities Services as Depositary during the first half of 2019.The Company complies,where relevant,with the Financial Conduct Authoritys(FCA)Handbook including the Disclosure Guidance and Transparency Rules.Regulatory and portfolio information is announced via the regula
332、tory news service on a daily,monthly and other periodic basis thereby assisting current and potential investors to make informed investment decisions.Additional portfolio information,technology commentary and corporate information is available on the Companys website .PerformanceThe investment portf
333、olio at the year end is set out on pages 51 to 52 and the top twenty holdings are listed on pages 42 to 46.In the year ended 31 December 2019,the Companys total return on net assets per share was 28.8%(2018:9.0%),underperforming the Dow Jones World Technology Index(sterling adjusted,total return)by 10.2 percentage points.Further details on the performance of the Company,future trends and factors t
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