Fund Focus: why this tech investment trust has pulled ahead

An AI shift is setting some of the big names apart.

5th May 2026 11:51

by Dave Baxter from interactive investor

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Dave Baxter Fund Focus with text

As I wrote last week, the recent market rally has propelled some familiar names back to the top of the performance charts. Shares seen as artificial intelligence (AI) plays have soared ahead, with global tech funds making big gains on the back of this. 

That’s good news for some of the portfolios ii customers use as a play on the tech sector, with some strong returns so far in 2026.  

But one name has pulled ahead pretty decisively in recent months, giving us a good lesson about how the AI trade has broadened out. 

Ahead of the pack 

As the table shows, Polar Capital Technology Ord (LSE:PCT) is notably ahead of its main rival Allianz Technology Trust Ord (LSE:ATT) so far in 2026 and leaving some popular tech tracker funds behind in the dust.

Even Scottish Mortgage Ord (LSE:SMT), a name with lots of tech exposure bolstered by recent advances for SpaceX, doesn’t seem able to keep up with PCT for now. 

Source: FE, 04/05/26. Past performance is not a guide to future performance.

What’s going on? As we noted last year, all the dedicated tech funds have an overwhelming level of exposure to the Magnificent Seven stocks, with the L&G tracker tending to have the biggest bets here.  

PCT sticks with this trend but also serves as an outlier in having a decent level of exposure to Asia, which accounts for around 17% of the portfolio. 

Its recent list of top 10 holdings showed that while number one position NVIDIA Corp (NASDAQ:NVDA) accounted for a tenth of the fund, Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM) made up 5.4% and Samsung Electronics Co Ltd DR (LSE:SMSN) 2.6%. 

This matters, given how the fortunes of Asian stocks seen as AI plays and the Magnificent Seven have diverged this year.  

Microsoft Corp (NASDAQ:MSFT) and Meta Platforms Inc Class A (NASDAQ:META) are down this year, Apple Inc (NASDAQ:AAPL) sits on a modest gain and Nvidia is up by around 6%, while Amazon.com Inc (NASDAQ:AMZN) has returned 18% and Alphabet Inc Class A (NASDAQ:GOOGL) 22.5%.  

Those mixed results contrast with a 42% return for TSMC, a 77.6% gain for Samsung Electronics and a 114% return for SK Hynix.

That’s part of a trend that has seen the MSCI Emerging Markets index return around 17% this year in sterling terms, versus around 4.5% for the S&P 500. 

The big beasts 

Putting that headful of numbers to one side, it reminds us of the sometimes easily forgotten benefits of diversification. PCT and ATT have at various points looked pretty similar by their returns over longer periods, and this for now gives us a bit of distinction between the two. 

As mentioned, they have both tended to (and still do) have lots invested in the US tech majors, although they have smaller bets there than the L&G fund mentioned before.  

An interesting argument the Allianz Technology Trust tends to make in its favour is that it seeks out some smaller, lesser-known tech shares that can deliver substantial gains when they come good. 

With investors seemingly hungry to identify winners and losers of the AI trade, it’s also worth paying attention to the subsectors that these funds back.

PCT breaks this out quite clearly in its monthly factsheet, and at the end of March it had a 37.3% allocation to the semiconductors and semiconductor equipment space. It had a mere 3.1% allocation to software, one of the big victims of an AI disruption scare earlier this year. 

That may also explain some of the performance differential between the two trusts.

The Allianz trust doesn’t break out its subsector exposures so clearly, although its last financial results note that around a quarter of the portfolio was in software at the end of last year.

Your view on whether software companies are under threat or oversold might determine which of the trusts you like more in the coming years. 

Investors could, of course, hold both, or they could diversify into emerging markets more aggressively.

While I don’t know of any dedicated emerging market technology funds, the more generalist funds in this space tend to have big exposure to TSMC, with names such as Samsung Electronics growing more prominent. We are also starting to see these shares appear more prominently in diversified global equity funds.

However, dedicated emerging market funds do now have big bets on some of the market leaders - a risk that is more than familiar to those who follow the S&P.

The AI trade remains an unpredictable beast and any sell-off can punish those names that have risen the most in recent times.

But investors do, for now, have some good ways to tell the most widely followed tech funds apart.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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