Fund Battle: technology funds, investment trusts and ETF options

Those waiting for an artificial intelligence (AI) bubble to burst may have time on their hands, if the latest update from the theme’s poster child NVIDIA Corp (NASDAQ:NVDA) is anything to go by.

The company has just reported record revenues for the third quarter, amounting to $57 billion (£44 billion) and a 22% uplift from the previous quarter.

In that context, it makes some sense that investors still flock to tech shares and the funds that target them.

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Four funds have proved especially popular among ii customers for a number of years, in the form of L&G Global Technology Index I Acc, Invesco EQQQ NASDAQ-100 ETF GBP (LSE:EQQQ) and two well-known investment trusts, Polar Capital Technology Ord (LSE:PCT) and Allianz Technology Trust Ord (LSE:ATT). But these names, which all appear in our latest ii Top 50 Fund Index, have very different approaches.

Big names with big gains

The big US tech names faltered in early 2025, thanks to the emergence of China’s DeepSeek among other things. But they have produced some big returns over 12 months.

Source: FE Analytics, 18/11/2025. Past performance is not a guide to future performance.

All the funds mentioned above have participated in such gains, but it’s shares on the two investment trusts that have had the biggest bounce.

And yet it’s the L&G Global Technology Index Trust (an open-ended passive fund, despite its name) that really stands out over five and 10 years. For context, we also include a popular name heavily exposed to US tech, the Vanguard S&P 500 ETF, in the performance table.

These time periods tend to hide plenty of nuances, but in a decade dominated by US mega-cap shares, the L&G fund’s portfolio offers some explanation of its outperformance.

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The big names feature prominently in all these funds: Nvidia accounts for at least a tenth of each based on recent disclosures, with Microsoft Corp (NASDAQ:MSFT) and Apple Inc (NASDAQ:AAPL) also on big weightings.

These three names, as well as Alphabet Inc Class A (NASDAQ:GOOGL), Meta Platforms Inc Class A (NASDAQ:META) and Broadcom Inc (NASDAQ:AVGO), a popular semiconductor play if not a Magnificent Seven member, sit in the top 10 holding lists for all four.

The L&G fund, which tracks the FTSE World Technology index, stands out because it is simply so concentrated. The fund had a 15.7% allocation to Nvidia at the end of September, with 13.9% in Microsoft and 13.6% in Apple. The fund also has a much bigger allocation to its top 10 positions.

Source: Fund providers. Invesco figures from end of October, all others from end of September. Past performance is not a guide to future performance.

Its top 10 list (which includes two share classes for Alphabet, and therefore only nine different companies) accounts for roughly 70% of the fund, meaning the fund is much less diversified than its total number of holdings (around 250) suggests.

The other tracker discussed here, the Invesco EQQQ Nasdaq 100 ETF, offers a more measured take on the sector.

There are still sizeable allocations to Nvidia, Microsoft and Apple and the top 10 holdings do account for slightly more than half the fund, but the fund has some exposure to sectors beyond tech such as consumer discretionary, which is a 13.2% weighting.

That means it has slightly less substantial ups and downs than a pure tech fund. The Nasdaq ETF lost around 24% in the growth sell-off of 2022, a rough result but slightly less painful than the 27% fall for the L&G fund. But it has lagged slightly in the good times.

Active plays

Allianz Technology and Polar Capital Technology have similar levels of portfolio concentration to the Nasdaq ETF, at least judged by weightings to top holdings, and a purer focus on the tech sector. But how do they differ from one another?

Source: FE Analytics, as at 19/11/2025. Past performance is not a guide to future performance.

To flirt with industry jargon, Polar Capital is meant to be more “benchmark-aware” than its rival, meaning it’s more likely to have similar exposures to the index.

This doesn’t always work out in practice. PCT has a 10.9% allocation to Nvidia (versus 10.5% for the Allianz trust), 6.9% in Microsoft and 6.4% in Apple.

The Allianz trust, and the other two funds in our analysis, have bigger allocations to Microsoft and Apple, among some other big names.

This reflects some concerns from the Polar Capital team. As investment manager Ben Rogoff told interactive investor earlier this year, the team had been reducing exposure to Alphabet on concerns that it had “lots to lose from a world where 800 million people are now using OpenAI’s ChatGPT”, while also cutting exposure to Apple.

PCT has pivoted firmly to the AI theme, with its last results focusing very prominently here. In terms of subsectors, it has big exposure to the semiconductors space, to software and to interactive media and services.

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The team used the trust’s last annual results to warn that companies operating in cloud services could struggle to maintain high growth rates of the past, with the caveat that the AI trend could potentially give them a boost.

One other notable trait of the fund is its geographic diversification, at least relative to the other options discussed here.

The fund has around 70% of its money in US shares but that’s much lower than the allocations in the other three funds, as the table shows.

PCT has a 13.6% allocation to the Asia-Pacific region, with emerging market favourite Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM) among its top 10 holdings. As such, it might actually work as a more nuanced tech play than the other three.

Source: Fund providers. Invesco figures from end of October, all others from end of September. Past performance is not a guide to future performance.

Allianz Technology’s USP

Allianz Technology should, in theory, be more differentiated from a tech tracker than PCT, even if this isn’t obvious from its bigger weightings to some Magnificent Seven members.

This trust is less mindful of how its reference index is composed and tends to have more of a focus on mid-cap shares.

With its mid-cap bias, the trust should do better if bigger names struggle, and in theory should find some tech companies with a good amount of growth ahead of them.

But it has proved especially volatile (in both a good and bad sense) at points.

In 2020, when many a tech-minded fund did well, ATT shares returned a phenomenal 80%, well ahead of other names. But they lost 40% in the sell-off of 2022, a much bigger hit than that suffered by rivals.

It's also worth touching on fees, covered in the table.

Source: Fund providers. Note that the trusts apply tiered fees to different levels of assets. Past performance is not a guide to future performance.

Alternatives

Many a portfolio, from Fundsmith Equity I Acc to WS Blue Whale Growth I Sterling Acc, has been branded a “tech” fund at some point or other. This reflects in part how hard tech is to define, and how ubiquitous it has become. But some funds do offer an interesting take on the sector.

For less US-heavy approaches, there’s Herald Ord (LSE:HRI), which spreads exposure across the US, UK and Asia. It focuses on small-cap names, and has a mixture of sector exposures that includes tech but also telecoms. The trust was earlier this year one of the seven targeted by US activist investor Saba Capital.

Beyond that there are some extremes. Think Manchester & London Ord (LSE:MNL), which targets AI plays and has most of its money tied up in Nvidia and Microsoft. These two names account for roughly two-thirds of the portfolio, which is a huge position.

Another punchy portfolio is L&G Global 100 Index I Acc. It holds multinational blue-chip companies of “major importance in global equity markets”.

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The end result is that this fund has close to 50% held in five companies: Nvidia (13%), Microsoft (11%), Apple (11%), Alphabet (7.4%), and Amazon (6.1%), as at the end of September.

An alternative passive play is HAN-GINS Tech Megatrend Equal Wgt ETFAcc (LSE:ITEK), which tracks an equal weighted index of global stocks.

For dedicated technology exposure, there are a small number of open-ended fund options, including Fidelity Global Technology W-Acc-GBP, which holds £25.3 billion in assets.

Elsewhere two interesting criticisms might apply to the four funds we initially examined: that they don’t have much exposure to up-and-coming tech names via countries such as China, and via unlisted companies.

One name to fill both gaps, to an extent, is the popular growth play Scottish Mortgage Ord (LSE:SMT). We recently examined its focus on AI, and the presence of other themes in the portfolio.

China or Asian tracker funds will also give hefty exposure to Chinese internet giants such as Alibaba Group Holding Ltd ADR (NYSE:BABA).

Elsewhere, investors can get exposure to unlisted tech plays via some of the private equity trusts: one very granular play here is HgCapital Trust Ord (LSE:HGT), which focuses on the software as a service subsector.