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: Monolithic Power Systems
-
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.
Take Monolithic Power Systems. It is capitalising on the electrification of the economy, which is being driven by several powerful trends: industrial automation, the transition to hybrid plus electric vehicles and the boom in artificial intelligence, which is driving the demand for data centres. Monolithic Power plays an important role in all of these areas.
The company's focus is power management. As semiconductors proliferate, power management becomes increasingly important. Think about a car or piece of industrial equipment. The more semiconductor content you add, the greater the need for effective and efficient power management. The ultimate example of the importance of this is an electric vehicle where multiple electronic components ensure controlled, safe and efficient driving.
Monolithic power creates a range of compact modules, sensors, circuits, drivers and other power management solutions, helping to make electronic devices more effective, reliable and capable. As investors, one aspect to the business model we like is the company not only designs these solutions, but also manages their fabrication versus outsourcing it. This facilitates one of its key objectives: to reduce manufacturing costs and improve product performance through continued developments in its process technology.
Stocks do not travel in a straight line. Monolithic is no different. We can't predict the future and we're not making any investment recommendations here. Our job at the Alliance Technology Trust is to find great businesses. Companies like founder-led monolithic, which is quite literally powering the future.
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.