Boost to NZ SuperFund, Kiwi Saver schemes from 'volatile' global tech market
• May 1, 2024
NVDA stock displayed in Apple’s Yahoo/Finance application. Photo: Scarlett Richards
Despite concerns about volatility, New Zealand's investment funds, including KiwiSaver and the NZ SuperFund, have benefited from tech companies' market growth in recent years.
And currently the SuperFund, which provides for Kiwi supernnuitants, has over one billion NZD invested into technology company NVIDIA, (771,114 shares to be precise), according to the latest fund disclosure posted in December 2023.
The company, a major provide of semi conductor chips, is projected to be the fourth ever to reach $100 billion USD in annual sales, according to the Boston Globe and Mail.
Such tech stocks are highly volatile, but crucial for making sizeable returns, says Peter Griffin, founder of Science Media Centre and Business Desk columnist .
“You’d be crazy not to have some exposure to tech investments as a KiwiSaver fund manager and obviously the government through their Super Fund and ACC fund.”
He said it's not unusual for investment schemes to now have a sizable portion of their fund invested in tech stocks but warned there could be "disruption" as technology changes.
LISTEN: Peter Griffin on what could affect such stock.
Marketplace.Org say NVIDIA currently controls and produces 82% of the world's GPU semiconductor chips, which provide platforms and systems for consumers to create their own AI modules more effectively and quicker than other chips.
The 2023 annual Financial Market Authority's report reveals there are now more than 3.25 million KiwiSaver members, making investment funds more scrutinized than ever.
Meanwhile The NZ SuperFund, a government sovereign wealth fund, was founded back in 2001 to provide superannuation for Kiwis over the age of 65, and to help the rising future cost of the country's superannuation programme.
“The bulk of our global equity strategies are run by external managers and are largely passive,” said John Redwood, a NZ SuperFund senior communications strategist.
Those managers invest in tech stocks due to their profitability.
“There isn’t an underlying strategy in the value of holdings, the share price of stocks has gone up along with the value of our holdings so it's not necessarily like we’ve invested more,” he said.
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