Walter Price Tech Fund Beats Passive Peers

After impressive performance in the US, Walter Price has been managing the Allianz Technology Trust since 2007, and continues to offer tracker-fund-beating returns

David Brenchley 10 December, 2018 | 12:24AM

Apple, Technology, Walter Price, Allianz Technology Trust, stock market, active versus passive

In the late 1990s, internet stocks were all the rage, with Joe Public clamouring to get a piece of the high risk, high returns, action. Then, the dotcom bubble burst and many investors lost significant sums.

Those who got stung and decided to cut their losses at the bottom, though, would have missed some incredible gains. And while tech stocks spend

tsome years in the doldrums, the likes of the FANG stocks have been responsible for much of the the NASDAQ and the S&P 500 rally over the past decade.

In the past five years alone, the MSCI World Information Technology Index has returned four times more than the wider MSCI World Index. In the US, returns from the S&P 500 Information Technology sector are twice that of the S&P 500.

Walter Price has been running the US-based Allianz GI Technology fund, which has a Bronze rating from Morningstar analysts, since 1995. He saw his fund shed 82.5% between March 2000 and October 2002. In the following 16 years, though, it’s produced a gain of over 1,000%. A $10,000 investment in the fund at inception would now be worth over $110,000.

Off-Benchmark Approach

Price brought his skills to the UK market in May 2007, when he was named as lead manager of the Allianz Technology Trust (ATT). Investors who followed his track record have not been disappointed.

The trust offers a differentiated proposition to most investing in the tech sector. While the top three holdings – Amazon (AMZN), Google owner Alphabet (GOOGL) and Apple (AAPL) – may not bear that out, a look deeper into the top 10 does. Lesser known names such as Square (SQ), NetApp (NTAP) and Paycom Software (PAYC) appear in the next four largest positions, alongside Microsoft (MSFT).

Since Price took over, the trust has seen gains of 465%. That compares impressively with a tracker fund, L&G Global Technology Index, which is up 337%.

Over the five-year period mentioned previously, when tech stocks have done so well, it’s closer, with Allianz up 151% and the tracker up 148%. But that was after a 2014 that saw Price’s offering underperform significantly, at just 7% compared with the tracker's gains of 27%.

Over the three-year period, Price has doubled investors’ money, compared with 80% for the L&G mandate; and it’s returned twice as much as the passive in the past 12 months.

After a flying start to 2018, the fourth quarter has been tougher for Price. Returns during the first nine months of the year were 33.5%, compared with 20% for the tracker. But in the quarter to December 6, ATT has lost 18%, against a loss of 12%.

Still, that’s a very short timeframe to judge a fund by, and investors should continue to be rewarded by backing Price to outperform.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Allianz Technology Trust Ord1,467.42 GBX-2.82
Alphabet Inc A1,207.65 USD-2.30
Amazon.com Inc1,764.64 USD-3.00
Apple Inc191.05 USD-2.07
L&G Global Technology Index I Acc51.79 GBP-0.78
Microsoft Corp117.09 USD-2.60
NetApp Inc66.84 USD-3.84
Paycom Software Inc181.16 USD-4.68-
Square Inc A75.09 USD-4.38

About Author

David Brenchley

David Brenchley  is a Reporter for Morningstar.co.uk

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