Allianz Technology (ATT ) fund manager Walter Price is bowing out at a difficult time for high-growth stocks but a 25% rebound in the investment trust’s shares since the end of June underlines the veteran investor’s enthusiasm for the potential long-term returns in technology.

Whether the rise in ATT shares from 208p 259p today is anything more than a bear market rally remains to be seen, but the relieved response to stock market hopes of a peak in inflation and US interest rates has improved the position of the trust’s investors after an atrocious start to the year.

Having plunged 41% in the first six months of 2022, the trust’s shares are now down 27% for the year to date. They stand nearly 11% below net asset value (NAV) which compares to an average one-year discount of 8%.

Half-year results published this month saw the £1bn trust report a 30.6% slump in the value of its 49% investments in the six months to 30 June, a performance that chairman Robert Jeens said was ‘disappointing’. This was 7.9% worse than the Dow Jones World Technology index which fell 22.7%.

Longer-term performance remains strong, however. Price, who handed the portfolio to co-manager Mike Seidenberg last month and will fully retire at the end of the year, has overseen a 704% total shareholder return in the past 10 years that handsomely beats the 523% from the benchmark.

The half-year period saw the fund managers do well to go light on their holding in Meta as shares in the Facebook owner tumbled over the impact of Apple’s privacy changes, competition from short video platform Tik Tok and big investment in its strategic push towards virtual reality in the metaverse, which they noted was ‘in the very early stage of development and a long way from commercial roll out’.

Cybersecurity software specialist CrowdStrike, a top-10 holding at 3.5% of assets, eked out a 5% share price rise in the first half after posting better-than-expected quarterly results and guided investors to expect more of the same this year.

‘We continue to believe CrowdStrike’s best-in-class endpoint security solutions are particularly relevant in the new distributed workforce context that many enterprises find themselves in today,’ the managers said.

The duo are also sticking by cloud-computing group Snowflake and cloud security provider Zscaler after their shares slid 62% and 45% in the first half. Snowflake disappointed the market’s high expectations with a 102% surge in annual revenues but Price and Seidenberg said it would continue to grow quickly.

‘Snowflake has built a highly advanced cloud-native architecture that represents a major leap over traditional analytical databases that have been in the market for decades,’ they said.

Similarly, ‘Zscaler is a first mover in cloud security that has essentially created a new market in the cybersecurity world with an innovative product umbrella and strategic focus, which should disrupt the competitive landscape for years to come,’ the managers said.

Although Price (above), who helped launch the trust in 1995, and Seidenberg have top positions in ‘mega cap’ stocks such as Microsoft, Apple and Alphabet, they prefer to focus on ‘mid-cap’ tech stocks of between $10bn and $100bn which account for just over 46% of the portfolio.

They said they had reduced holdings in some high-growth companies they felt would struggle to grow profits and justify big valuations, but had held on to others they believed could maintain steady growth rates. They also lifted their weightings in more economically sensitive semiconductor and hardware companies to maintain a balance in the portfolio.

While the post-Covid recovery had been ‘complicated’ by supply chain problems and rising inflation and interest rates, they were confident technology would be the main driver of long-term economic growth.

‘As companies need to reduce costs and improve productivity, we expect to see accelerating demand for innovative and more productive solutions such as cloud, software-as-a-service, artificial intelligence, [and] cybersecurity. We are in a period of rapid change where the use of technology is key to the prosperity of most industries,’ they bullishly concluded.

Numis Securities analysts said ATT’s wider-than-normal discount offered an attractive entry point for investors who believed Seidenberg would continue to faithfully implement the strategy he had worked on since 2009.

‘The portfolio has a relatively high turnover and therefore we believe we will relatively quickly see have effective Mike is at executing the strategy,’ said analysts  Gavin Trodd and Ewan Lovett-Turner.