Proactive Investors - Technology stocks staged a miraculous recovery in 2023, with megacaps like Nvidia Corporation, Tesla Inc (NASDAQ:TSLA) and Meta Platforms Inc enjoying triple-digit rallies, much to the chagrin of UK-listed investment trusts that capitulated in 2022.
As the year draws to a close, we dived into the portfolios of the trusts with significant weighting to the so-called ‘Magnificent Seven’ tech stocks, namely Nvidia, Google parent Alphabet (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL), Tesla, Facebook-owner Meta and Amazon.com Inc (NASDAQ:AMZN).
The data, generously supplied by our friends at the Association of Investment Companies, suggested that tech-heavy UK trusts held mixed opinions over which Big Tech stocks to buy and sell.
Nvidia
Microchip darling NVIDIA Corporation (NASDAQ:NVDA) was the hottest tech stock in 2023, skyrocketing up over 200%.
It stands to reason that it saw a significant increase in portfolio weightings across several trusts, including Alliance Trust (LON:ATST) (from zero to 1.83%), Allianz (ETR:ALVG) Technology Trust (from 0.75% to 7.61%), and Canadian General Investment Trust (from zero to 7.76%).
Alphabet (Google)
Google parent Alphabet saw mixed changes in investment in a year that saw the search giant fall by the wayside in both the cloud computing and artificial intelligence conversations.
Some investment companies, including Allianz Technology Trust, Polar Capital and JPMorgan (NYSE:JPM) American IT increased their stakes, while others including F&C Investment Trust and Personal Assets Investment Trust decreased their stakes.
Microsoft and Apple
Long-time tech rivals Microsoft and Apple remained a consistent part of all tech-focused trusts’ portfolios, as you would expect for the two largest stocks in the Nasdaq 100.
JPMorgan Multi-Asset Growth & Income, Canadian General Investment Trust and Bankers Investment Trust (LON:BNKR) were among the top buyers of new Apple stock, while top Microsoft buyers were Allianz Technology Trust and the Bankers Investment Trust.
Growing Interest in Meta Platforms (formerly Facebook (NASDAQ:META)):
Mark Zuckerberg’s social media-turned-metaverse corporation was another hot stock in 2023, having surged over 180% since the start of the year.
Notable increases in Meta were seen in Allianz Technology Trust (from zero to 8.12%), JPMorgan American IT (from zero to 3.62%) and Polar Capital Technology (from 0.6% to 4%), suggesting a renewed investor interest in Meta, possibly due to its strategic shift into cutting-edge next-gen metaverse tech.
On the other hand, Ruffer Investment Company reduced its weighting from 0.33% to 0.19%.
Amazon
Amazon showed a mixed trend in portfolio weightings.
Mid Wynd International Investment Trust led the buy side, increasing its weighting in the e-commerce giant by 360 basis points, followed by Scottish Mortgage, which increased its weighting by 220 basis points.
Monks and Witan Investment Trust (LON:WTAN) also added Amazon shares, while Baillie Gifford US Growth and F&C Investment Trust slightly reduced their exposure.
Decreased Investment in Tesla
Almost every trust decreased their exposure in Elon Musk’s electric vehicle big cap, including F&C Investment Trust, JPMorgan American IT, Keystone Positive Change Investment, Monks and Scottish Mortgage.
Only Polar Capital Technology increased its stake, albeit by only eight basis points.
Best-performing trusts
Of the 25 polled trusts, Manchester & London came out on top with a 60% year-to-date share price rally, thanks to a 32% weighting on Microsoft and a 20% weighting on Nvidia.
Polar Capital Technology, which holds every stock in the Magnificent Seven, came in second place, with Allianz Technology Trust (which holds everything but Tesla) winning bronze.
The top five were:
Manchester & London: 60.07%
Polar Capital Technology (LON:PCT): 45.58%
Allianz Technology Trust Ord: 43.48%
JPMorgan American IT ORD: 23.44%
JPMorgan Global Growth & Income IT ORD: 16.78%
Worst-performing trusts
The worst-performing trusts were those with smaller Big Tech weightings, standing as proof that 2023 really was a winner for tech-savvy investors.
Holding small stakes in Amazon and Meta alongside BP (LON:BP), Alibaba (NYSE:BABA) and Brewing company Ambev, diversified investment trust Ruffer Investment Company came in last place of the polled trusts.
Henderson International Income, which holds Microsoft shares alongside other dividend-yielding companies like Coca-Cola (NYSE:KO) and Roche (LON:0QQ6), came in second last, while STS Global Income & Growth Trust, which employs a similar dividend strategy, came in third last
The bottom five were:
Personal Assets Inv Trust: -1.88%
Caledonia Investments (LON:CLDN): -2.17%
STS Global Income & Growth Trust (LON:SESTS) Ord: 3.98%
Henderson International Income (LON:HINT): -10.2%
Ruffer Investment Company (LON:RICA_p): -14.38%
The moral of the story? Make sure to have a crystal ball to predict what sectors will be hot or not in the year ahead!