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Columbia Threadneedle’s Columbia Seligman Global Technology Fund has delivered a strong performance in the second quarter of 2025, driven by soaring demand for artificial intelligence (AI) chips and the continued expansion of data centres. This commentary provides a detailed look at the fund’s key holdings, their performance during the quarter, and the outlook for the technology sector as it navigates evolving market dynamics.

The AI Boom Drives Gains: The primary catalyst for the fund’s impressive results was the relentless demand for AI-related hardware. Companies specializing in the design and manufacturing of advanced chips, particularly those powering AI algorithms, experienced significant growth. This trend was further bolstered by the ongoing build-out of data centres globally, essential infrastructure to support the burgeoning AI landscape. The fund's exposure to these areas proved highly beneficial.

Key Holding Performance: A closer examination of the fund's top holdings reveals a consistent theme of growth and innovation. While specific performance figures are detailed in the full report, several key observations can be made:

• Semiconductor Leaders: Major semiconductor manufacturers saw substantial gains, reflecting the widespread adoption of their products across various industries. The fund’s strategic investments in these companies paid off handsomely.
• Data Centre Infrastructure Providers: Companies involved in the construction and operation of data centres also performed strongly, benefiting from the increased demand for cloud computing and AI services.
• Software Innovators: Select software companies, particularly those providing AI-powered solutions, contributed positively to the fund’s overall return.

Navigating Market Challenges: While the outlook for the technology sector remains largely positive, several challenges warrant attention. These include:

• Geopolitical Risks: Ongoing geopolitical tensions continue to create uncertainty in global supply chains and impact international trade.
• Inflationary Pressures: Persistent inflationary pressures could dampen consumer spending and impact corporate profitability.
• Regulatory Scrutiny: Increased regulatory scrutiny of the technology sector, particularly concerning data privacy and antitrust issues, could pose headwinds.

Looking Ahead: Opportunities and Strategies: Despite these challenges, Columbia Threadneedle remains optimistic about the long-term prospects for the technology sector. The fund’s investment strategy is focused on identifying companies with:

• Strong Competitive Advantages: Companies with differentiated products or services and a proven track record of innovation.
• Solid Financial Fundamentals: Companies with healthy balance sheets and strong cash flow generation.
• Exposure to High-Growth Trends: Companies benefiting from secular trends such as AI, cloud computing, and the Internet of Things (IoT).

The Columbia Seligman Global Technology Fund is well-positioned to capitalize on the ongoing transformation of the technology landscape. By selectively investing in innovative companies with strong fundamentals, the fund aims to deliver long-term value to its investors. Investors are encouraged to review the full Q2 2025 commentary for a comprehensive analysis of the fund's performance and outlook, including detailed holdings breakdowns and manager insights.

Disclaimer: This commentary is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making any investment decisions.