The Liontrust GF Global Technology Fund continues to invest in global leaders and disruptors within the technology sector that are well positioned to benefit from the new AI-driven technology cycle.
- Q2 top contributors: CoreWeave, Apple (underweight), Credo. Q2 detractors: Nvidia (underweight), Onto Innovation, AMD
- Highly volatile quarter reiterates importance of remaining focused on company fundamentals, which continue to accelerate for innovative technology companies well positioned for the new cycle
- Remain highly active, capitalising on attractive valuation opportunities to invest in innovative technology companies trading at attractive discounts
Performance overview
The Liontrust GF Global Technology Fund returned 14.0% in June in US dollar terms, compared with the 9.2% return from the MSCI World IT Index comparator benchmark.
This rounded out the second quarter of 2025 where the Fund returned 36.5%, ahead of the MSCI World IT Index return of 23.2%.
Fund commentary
The past few months have proved a strong reminder that in the short term, market sentiment often drives share prices, but over the longer term it is underlying fundamentals that determine investor returns.
We are now around two years into this new market cycle, characterised by both high returns and pronounced volatility. This was evident in the second quarter of 2025, with the VIX volatility index spiking to levels not seen since the GFC following April's "Liberation Day" trade policy announcements from the US which sent reverberations around global markets. Heightened uncertainty around tariffs and their potential impact on inflation and trade activity weighed on investor sentiment, the MSCI World index falling over 9% in early April - the 5th worst sell-off we have seen in the past 75 years.
During such sharp market sell-offs or resets, the best-performing stocks from the preceding period often suffer the steepest declines – a phenomenon we witnessed acutely in April, with a number of innovative global companies which had led markets over prior periods selling down strongly.
Importantly, we continued to see evidence of strengthening underlying fundamentals from these companies throughout this period, as evidenced in consistently strong earnings updates and positive progress witnessed first-hand during our quarterly research trips. We are increasingly confident that the winners of this cycle will be different to those of the past, with new companies emerging against this volatile backdrop to position themselves on the right side of multiple innovation cycles across sectors in the years ahead.
As we noted back in April, this stark dislocation between share prices and strengthening fundamentals thus provided attractive opportunities for active managers, and we capitalised on our strict valuation discipline and active approach to reposition the portfolio during this period, including topping up companies hardest hit and adding new positions in companies which had long been on our watchlist but whose share prices had yet to provide satisfactory upside potential.
Subsequent months proved much more positive for equities as the single-biggest macro overhang weighing on markets was removed, or at least significantly reduced, following a de-escalation in trade tensions between the US and China in May. This allowed focus to shift back to underlying company fundamentals, with markets rallying through the rest of the quarter as companies continued to report strong quarterly updates. The MSCI World index rose nearly 16% from its April lows, finishing the quarter up over 5%, while the tech-heavy NASDAQ rallied nearly 25% from its April lows to finish the quarter up nearly 11%.
Notably, many of the global innovators that had been hardest hit during the April sell-off were among the first to see their share prices recover as broader sentiment improved, validating our active approach throughout the quarter.
Strong fundamentals
Top contributors to fund performance during the quarter all suffered sharp sell-offs in April but subsequently rallied on the back of broader market sentiment and strong earnings updates which underscored strengthening fundamentals and accelerating innovation profiles.
The one exception was CoreWeave – a position we initiated early in April, and top contributor to fund performance in the quarter – which avoided much of the sell-down having only listed in late-March. A next-generation cloud provider purpose-built for generative AI, CoreWeave delivers high-performance, GPU-accelerated infrastructure that meets the growing demand for accelerated compute. Unlike legacy cloud vendors, CoreWeave has architected its platform from the ground up for AI workloads, offering low-latency, elastic compute capacity at a lower cost. The company pivoted from crypto mining and moved early to secure access to cutting-edge GPUs, establishing a deep relationship with Nvidia and emerging as a preferred partner for AI leaders including OpenAI and Mistral. CoreWeave delivered exceptional quarterly results in its first post-IPO update with revenues of $982 million up a staggering 420% year-on-year, whilst adjusted operating income of $163 million grew by 550%, both well ahead of consensus. Forward prospects remain exceptionally strong as demand for inference and fine-tuning workloads accelerate, with the company securing a five-year, $11.9 billion deal with OpenAI plus an additional $4 billion expansion contract, growing its revenue backlog to c.$26 billion. The company also completed the acquisition of developer platform Weights & Biases, adding 1,400 top AI labs and enterprises to its client base. Management is investing aggressively to serve this ramping demand, with $20+ billion of capex guided for the full year to expand its footprint, whilst being the first company to deploy Nvidia GB200 Grace Blackwell systems at scale for leading AI developers. With full-year revenues guided to c$5 billion, management expects operating leverage to emerge as it scales, with adjusted operating margins forecast to reach 27-28% by 2027. Shares rallied impressively throughout the quarter, gaining over 300% as investors recognised the company's exceptional positioning in AI infrastructure and secular growth opportunity ahead. Given this rapid ramp-up we have been managing our position carefully, trimming our position as the company approaches our target price.
Credo sold off 17% in early April alongside other AI infrastructure players before rallying spectacularly by over 170% by quarter-end from its April lows, the stock another top contributor to fund performance in the quarter. An innovator in high-speed connectivity solutions, Credo provides secure, energy-efficient connectivity infrastructure that powers AI data centres through its portfolio of Active Electrical Cables, optical DSPs, retimer ICs, SerDes chiplets, and IP licensing. The company delivered exceptional results that reinforced its positioning at the centre of AI infrastructure buildout, with quarterly revenues of $170 million up 26% quarter-over-quarter and 180% year-over-year, while EPS of $0.35 significantly beat expectations. Full year revenues reached a record $437 million, up 126% year-over-year, with gross margins of 65% demonstrating strong pricing power and operational leverage. Management's confidence in sustained growth was evident in guidance for revenue of $185-195 million next quarter, while full year revenues are expected to exceed $800 million – up over 85% year-on-year. The company remains plugged in to powerful structural tailwinds as hyperscalers and sovereigns race to expand AI infrastructure, with CEO Bill Brennan noting they continue to see growing demand for solutions across their customer base to power advanced AI services – a trend the company sees as persisting for the “foreseeable future". With a strong balance sheet and diversification across multiple hyperscaler customers, Credo is exceptionally well-positioned to capitalise on the multi-year AI infrastructure investment cycle ahead, underpinned by multiple AI scaling laws and emerging ramping demand for inference across the economy.
Similarly, TSMC sold off 15% in early April before rallying 60% through quarter end, emerging as another top contributor to fund performance. The "world's factory" for semiconductor manufacturing and foundry partner to technology giants including Apple, Nvidia, and Broadcom, TSMC stands at the epicentre of ongoing semiconductor revolution with unparalleled technological leadership in advanced node processes. The company delivered a strong Q1 that reinforced its positioning as a primary beneficiary of ramping AI demand, revenue of $25.5 billion growing 42% year-over-year and net income up 60% to $11.1 billion, significantly ahead of expectations. Advanced processes continued driving favourable mix improvements, with next-gen 3nm accounting for 22% of wafer revenue, 5nm contributing 36%, and 7nm adding 15% – together representing 73% of total wafer sales and demonstrating TSMC's widening technological moat over competitors in advanced nodes. Growth prospects remain strong – Q2 guidance of revenue of c.$29 billion represents sequential growth of over 13%, while full-year revenue growth of mid-20% was reaffirmed. AI accelerator revenue is expected to double in 2025 following a threefold increase in 2024, the company targeting a 45% CAGR through 2029. With CoWoS advanced packaging capacity doubling in 2025 and still fully loaded, plus strategic expansion of US manufacturing capabilities representing 30% of future 2nm capacity, TSMC's technological barriers and manufacturing scale advantages position it exceptionally well to capitalise on the structural AI demand cycle ahead, underpinned by what management describes as "insatiable" customer appetite for energy-efficient computing power.
On the other hand, while market sentiment broadly recovered through the quarter, the volatile backdrop meant any miss in earnings was ultimately punished, as evidenced by key detractors to fund performance for the quarter. While misses are of course disappointing, we were reassured to see positive signals of fundamental strength which reaffirm our conviction in these companies in the longer term.
In the quarter this included Doximity – the LinkedIn for healthcare professionals, operating the largest professional network and telehealth platform for healthcare professionals in the US, with over 80% of US doctors and 50% of nurse practitioners and physician assistants as verified members. Its platform provides digital tools for clinicians including secure HIPAA-compliant messaging, telehealth, electronic faxing, scheduling, and AI-powered workflow solutions; the company monetises this by leveraging its vast data and AI capabilities to offer highly targeted pharmaceutical advertising and medical hiring solutions, as well as subscription-based services for certain digital tools. The company continues to demonstrate strong underlying business momentum, evident in a robust quarterly earnings update. The company saw record engagement growth, 17% revenue growth, and EPS of $0.38 – up over 50% year-on-year, beating expectations by over 40%. However, a marginally soft guide saw shares fall post-update, leading the stock to be a key detractor to fund performance for the quarter. Management appears to be taking a conservative approach, however, factoring in a macro-related spend growth deceleration despite seeing no impact in its business today. With sticky network effects, circa 90% gross margins, and a highly scalable platform, the company remains well positioned to generate strong cash flows and earnings growth as it scales in the coming years. As such, we opted to top up our position throughout the period.
Similarly Onto Innovation also detracted from fund performance despite delivering record quarterly revenue of $267 million, up 17% year-over-year, and beating EPS expectations with $1.51 versus $1.47 forecasted. A leading provider of process control and inspection equipment for semiconductor manufacturing, the company’s miss came not from operational execution but from cautious Q2 guide and anticipation that Q3 would be the lowest revenue point of the year, reflecting timing concerns around customer investment patterns and memory market dynamics. However, underlying fundamentals remain robust, with advanced nodes revenue up 96% quarter-over-quarter and the company maintaining strong positioning across critical growth markets including AI packaging, high bandwidth memory, and 3D interconnect technologies. Management highlighted significant progress with new product launches, including 3Di technology securing initial orders from leading HBM manufacturers and a $69 million volume purchase agreement with a major DRAM producer, whilst expanding manufacturing capabilities in Asia to enhance business continuity and competitiveness. The company remains strategically positioned for long-term growth as semiconductor complexity increases, with strong market positions in inspection, metrology, and integrated solutions serving the industry's transition to advanced packaging and AI-optimised chips. Nonetheless, with attractive opportunities emerging elsewhere during this volatile period, we opted to exit our position and move it back to the watchlist where we will continue to monitor it for a more attractive entry point in the future.
We remain active
Given the backdrop we were particularly active during the quarter, taking advantage of periods of macro-driven volatility to strategically increase our positions in the hardest-hit investments across the Fund and where share-prices had most starkly disconnected from fundamentals. This included topping up our positions early in the period in aforementioned companies which ultimately ended up being top contributors to fund performance, as well as those whose price recovery we expect to play out less abruptly, including leading innovators across different sub-sectors such Doximity, ServiceNow, and Recursion Pharmaceuticals.
We also took the opportunity to initiate positions in a number of companies that have long been on our watchlist and where market volatility finally provided an attractive entry window, adding thirteen new companies to the fund in the quarter, including top-contributor Coreweave.
For example, we initiated a position in FICO mid-May after the shares fell by over 30% post-earnings – their lowest point in two years, providing an attractive entry point in this high-quality global innovator which has compounded earnings at an above-20% annualised rate over the past decade. Best known for its crown-jewel FICO Score – the industry-standard measure of consumer credit risk in the USA – FICO is a global leading data analytics company, developing software and tools that help organisations across sectors to make better decisions, manage risk, fight fraud, optimise operations, and comply with regulations. Its solutions leverage big data, AI/ML, and cloud computing, and extend across a range of sectors including financial services, insurance, healthcare, retail, and more. The company’s May update appeared strong, beating consensus expectations as revenue grew 15%, operating margins expanded 5%, and EPS grew 27% year-on-year. However, shares sold off due to the combination of muted software growth, acknowledged macroeconomic uncertainty (which could delay deal closures and slow usage-based revenue), and regulatory scrutiny over the company’s dominant 90% B2B credit scoring market share which may slow pricing growth. Whilst this creates a degree of overhang, the company’s recent FICO World event showcased continued strong innovation in the software space, with a number of new products with strong commercial potential as the company increasingly commercialises its considerable internal AI knowledge base. With management reiterating full-year guide for 15% revenue and 20% EPS growth and launching a $1 billion buyback program, we remain confident in FICO’s durable competitive advantages and long-term growth trajectory. Shares have subsequently recovered by over 20% from their May lows.
We also re-initiated a position in Intuit – the global leader in consumer and small-business financial software. Shares subsequently jumped following a strong May beat-and-raise quarterly earnings update, revenues rising 15% and EPS 18% year-on-year driven by a robust Consumer Group division where TurboTax Live saw a breakthrough 24% increase in customer adoption. With data from 100 million customers across its platform, Intuit is reaping the benefits of years of investment in AI and data management which it is using to improve operating efficiency (lifting expert filing productivity double-digits) while improving offerings for customers (tax filing times significantly reduced). This benefits the firm in a multitude of ways, such as freeing up advisor time to focus on customer onboarding, improving cross-selling opportunities, and reducing customer churn – lowering customer acquisition costs and improving cohort economics as management shifts focus to disrupting the advisor market. AI is also improving targeting, with Credit Karma revenues surging 31% year-on-year thanks to stronger credit-card and loan matching driven by the company’s AI-driven “Lightbox” engine. Elsewhere, the group’s global business solutions division continues to strengthen through accelerating product innovation – the company has seen an 8-fold increase in development velocity since 2020 – which is facilitating mid-market share gains as products such as such QuickBooks Online Advanced and Intuit Enterprise Suite resonate with customers (revenues up 40% year-on-year). As the company prepares to launch new AI agents for customer service, payments, project-management, and finance & accounting in the coming weeks, management is confident that Intuit remains well-placed to win in the era of AI-defined software which is driving enterprise software consolidation. This confidence is reflected in a raised full-year guide, management now expecting revenue growth of 15% and adjust EPS growth of 19%.
To finance these purchases, we reduced a number of holdings which performed well at different stages throughout the quarter, and exited certain companies whose upside potential was no longer sufficient. This varied month to month, but over the course of the quarter saw us trimming strong performers such as Amphenol, Palantir, and Coreweave (towards the end of the quarter). These were all companies we had bought or topped up when they sold-off during March and April, but each of which saw strong subsequent rallies enabling us to reallocate capital to better upside opportunities elsewhere. We also exited positions in a number of stocks which had achieved our target prices or where we simply saw better upside opportunities elsewhere, including Onto Innovation, Apple, Camtek, and Ultra Clean Holdings. As always, these companies move back to the watchlist where we will continue to monitor them for potential attractive entry points in the future.
Innovators remain well positioned for a new cycle
Supported by insights from recent team research trips to the US and Japan, we remain buoyed about the long-term growth prospects for innovative global technology companies in the Fund, which remain well positioned for multiple new innovation cycles across different sectors in the years ahead. This was reinforced by another strong earnings season, where we have seen evidence of innovative technology companies proving their resilience and adaptability while strengthening their competitive positioning against a difficult market backdrop. While a degree of macroeconomic and regulatory uncertainty persists, we are reassured to see that fundamentals – rather than sentiment – will ultimately be rewarded in the market.
We look forward to sharing insights from our recent research trips in the coming weeks. With the pace of innovation accelerating, and numerous new structural growth opportunities emerging, we are seeing a lot of exciting new opportunities emerge across the industry landscape, bolstering our confidence that the winners of this new innovation cycle will be different from those of the last.
As always, we will continue to maintain our valuation discipline, taking advantage of further market dislocations to invest in innovative global leaders with strong competitive barriers at attractive prices.
Key Features of the Liontrust GF Global Technology Fund
The Fund aims to achieve income with the potential for capital growth over the long-term (five years or more). The Fund aims to deliver a net target yield in excess of the net yield of the MSCI World Index each year.
There can be no guarantee that the Fund will achieve its investment objective.
The Investment Adviser will seek to achieve the investment objective of the Fund by investing at least 80% of the Fund’s Net Asset Value in shares of companies across the world. The Fund may also invest up to 20% of its Net Asset Value in other eligible asset classes. Other eligible asset classes include collective investment schemes (which may include funds managed by the Investment Adviser), cash or near cash, deposits and Money Market Instruments.
In addition the Fund may invest in exchange traded funds (“ETFs”) (which are classified as collective investment schemes) and other open-ended collective investment schemes. Investment in open-ended collective investment schemes will not exceed 10% of the Fund’s Net Asset Value. The Fund may invest in closed-ended funds domiciled in the United Kingdom and/or the EU that qualify as transferable securities. Investment in closed-ended funds will be used where the closed-ended fund aligns to the objectives and policies of the Fund. Investment in closed-ended funds will further be confined to schemes which are considered by the Investment Adviser to be liquid in nature and such an investment shall constitute an investment in a transferable security in accordance with the requirements of the Central Bank. Investment in closed-ended funds is not expected to comprise a significant portion of the Fund’s Net Asset Value and will not typically exceed 10% of the Fund’s Net Asset Value.KEY RISKS
Past performance does not predict future returns. You may get back less than you originally invested.
We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments.
- Overseas investments may carry a higher currency risk. They are valued by reference to their local currency which may move up or down when compared to the currency of the Fund.
- This Fund may have a concentrated portfolio, i.e. hold a limited number of investments. If one of these investments falls in value this can have a greater impact on the Fund's value than if it held a larger number of investments.
- The Fund may encounter liquidity constraints from time to time. The spread between the price you buy and sell shares will reflect the less liquid nature of the underlying holdings.
- Outside of normal conditions, the Fund may hold higher levels of cash which may be deposited with several credit counterparties
(e.g. International banks). A credit risk arises should one or more of these counterparties be unable to return the deposited cash. - Counterparty Risk: any derivative contract, including FX hedging, may be at risk if the counterparty fails.
The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.
DISCLAIMER
This material is issued by Liontrust Investment Partners LLP (2 Savoy Court, London WC2R 0EZ), authorised and regulated in the UK by the Financial Conduct Authority (FRN 518552) to undertake regulated investment business.
It should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets.
This information and analysis is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content, no representation or warranty is given, whether express or implied, by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified.
This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID) and/or PRIIP/KID, which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances.
