Stock Stories bring you closer to the heart of our investment strategy. In these short videos, lead portfolio manager Mike Seidenberg discusses a selection of Allianz Technology Trust’s portfolio holdings and how they contribute to our overall strategic objective of achieving long-term capital growth by investing principally in technology companies globally that use technology in an innovative way to gain a competitive advantage.
In this short episode of ‘Stock Stories’, Mike discusses an investment decision that was made and is illustrative of the Trust’s strategy: Meta
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I'm Mike Seidenberg, lead portfolio manager of the Allianz Technology Trust. It's important to remember that all investments come with risk. The technology sector is well known for both growth and volatility. We aim to chart a smoother course in technology investing by focusing on sustainable, secular themes.
Having ridden the wave of social media, Meta Platforms, owner of Facebook, Instagram and WhatsApp is a company we know well. We first met with the CFO David Ebersman, when Facebook was a private company. Over the years, we've developed a great working relationship with the management team, Although at times we've taken a contrarian view on Meta.
One thing we're always cognisant of as technology investors is the natural life cycle of companies. Proven technology companies usually enjoy a period of stellar growth, followed by a period of slower growth, but greater profitability as margins improve and finally, a period of maturity. In investment parlance, they go from being growth stocks, to growth at a reasonable price, to value stocks. Meta is a classic example.
Having minimal exposure to meta during 2022 meant we avoided most of the pain the company felt when TikTok was gaining traction, and Meta's shares dropped substantially. Signs that Instagram was gaining market share gave us conviction to buy meta when it was out of favour. Over the course of 2023, better execution, a leaner cost structure, core product improvements and advancements in artificial intelligence drove revenues higher. Many shares recovered, and the Allianz Technology Trust was there to participate in the rebound.
In general, we tend to focus on mid-cap growth companies, but opportunities present themselves in companies of all sizes. No investment comes with a guarantee of success and we are not making any recommendations here. As Meta shows, even with large caps, the path is not linear and we stand by to capitalise on value where we find it.
Disclaimers: Past performance does not predict future returns. Securities mentioned in this document are for illustrative purposes only and do not constitute a recommendation or solicitation to buy or sell any particular security. These securities will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date.