One of the country’s largest fund managers has a blunt message for the millions of New Zealanders with money in KiwiSaver. The cheap global share funds that many people own, often without giving them much thought, have quietly turned into a concentrated bet on a small cluster of American technology companies.
Ashley Gardyne, chief investment officer at Fisher Funds, set out the warning in a commentary published by the NZ Herald on 10 June. His point is not that the United States sharemarket is about to fall over. It is that the popular index funds sitting inside most growth KiwiSaver accounts no longer spread risk the way savers assume they do.
The numbers behind that argument are striking. The top 10 stocks in the S&P 500, the benchmark American index that anchors most global share funds, now make up around 40 percent of the whole index. That is double their share in 1990 and the highest level of concentration since the early 1970s. Nvidia alone, the chipmaker at the centre of the artificial intelligence boom, accounts for close to 8 percent of the entire index. Eight of those top 10 companies are tied to AI in one way or another, as chipmakers, cloud providers or platform owners. They are Nvidia, Apple, Microsoft, Amazon, Alphabet, Broadcom, Meta Platforms and Tesla.
Gardyne argues that this changes what a global index fund actually is. “Every few decades, the very thing the index is supposed to deliver, diversification, quietly disappears,” he wrote. He added that “a single stock representing close to one-12th of the entire US market is something we haven’t seen since IBM in the 1970s”. His sharpest line was aimed squarely at the everyday investor. “Investors buying a low-cost global index fund believing they are getting safe, broad exposure across thousands of businesses are, in reality, taking a very large and specific bet,” he wrote.
The maths of this year’s returns shows how narrow the market has become. According to Gardyne, around 80 percent of the index’s gains this year have come from AI-linked stocks, and only about one in five companies in the S&P 500 has beaten the index. Semiconductor and chip-equipment makers, sitting at roughly 15 percent of the index by weight, have produced about half of its returns. In other words, a handful of winners are doing nearly all the heavy lifting, and most of the other 490-odd companies are along for the ride.
This matters for New Zealand because of where KiwiSaver money has drifted. The American market now makes up roughly 65 percent of the major global equity indices that local funds track. At the same time, savers have steadily moved into riskier, higher-returning options. Growth funds made up 47.5 percent of all KiwiSaver assets in 2025, up from just 28.3 percent a decade earlier. A typical growth fund holds about 60 percent of its money in global shares, so a large slice of the nation’s retirement savings is now riding on the same small group of US tech names.
The scale is not trivial. KiwiSaver holds well over $120 billion on behalf of around 3.4 million members, with an average balance of roughly $36,000. Many of those members have never looked under the bonnet of their fund to see what it owns.
The awkward part, as fund managers and analysts have pointed out, is that the concentration has been rewarding. Funds that leaned heavily into US shares and technology have generally beaten more cautious rivals over the past decade. In a review of long-run KiwiSaver performance reported by RNZ, Morningstar head of data Greg Bunkall said that “over the past decade, markets strongly rewarded the opposite characteristics, particularly high exposure to global equities, US technology, growth-style investing”. Managers who diversified away from those bets, or who tried to pick stocks actively, often ended up looking flat-footed against the index.
That same review noted that several of the biggest providers, including ANZ, AMP and even Fisher Funds itself, have lagged in some categories over recent years, partly because they did not ride the US tech wave as hard as some smaller, cheaper index-based funds. Gertjan Verdickt, a senior finance lecturer at the University of Auckland, has said the concentration is likely to keep going, pointing to the run that companies such as Nvidia have already had.
So the warning is really about the other side of that trade. The thing that has driven strong returns is also the thing that would hurt the most if AI enthusiasm cooled. If Nvidia and its peers stumbled, millions of New Zealanders would feel it at once, many of them with no idea how exposed they were.
None of this is investment advice, and switching funds in a panic after a wobble is usually a poor idea. What Gardyne and others are suggesting is more modest. Look at what your fund actually holds rather than trusting the label, check how much of it sits in the top handful of American stocks, and think about whether genuinely broader spread, across regions, sectors and an equal-weighted version of the index, fits your own time frame and nerves. For long-term savers years away from retirement, short-term swings matter far less than they feel like they do.
Have you checked what your KiwiSaver fund is actually invested in, and does the level of US tech exposure worry you? Share your thoughts in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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