In addition, a fast-paced rise in interest rates has prompted fears of an America recession over the coming months. This has further eroded investor bullishness in US technology companies, weighing on the sector, and the trust’s, recent performance.
Although inflation remains above the Federal Reserve’s 2pc target, it has fallen from a 41-year high of 9.1pc in June to 5pc last month. This could mean that interest rate rises are coming to an end.
They could even fall over the medium term should deflation become the dominant concern among central bankers. And while a near-term US recession cannot be ruled out, history suggests the country’s economic growth rate will ultimately revert to its long-term average.
In Questor’s view, therefore, now is an opportune moment for long-term, contrarian investors to buy the Allianz Technology Trust. It currently trades at a 13pc discount to net asset value (NAV), which is below its 4pc average discount over the past five years and suggests it offers good value.
Meanwhile, many of its holdings have attractive market valuations that are likely to rise as monetary policy becomes more dovish and the US economy’s outlook improves.
The trust’s major holdings are high-quality, household names that have significant competitive advantages and solid financial positions that are likely to enable them to deliver rising profits over the long run.
For example, Apple, Microsoft and Instagram owner Meta are its three largest positions, with 90pc of its holdings listed in North America. In terms of their size, 91pc of companies held by the trust have market capitalisations in excess of $10bn (£8bn) and about half have market values of $100bn or more.
