Opinion: KiwiSaver members do not need fund managers to be fortune-tellers about artificial intelligence. They need plain language about risk. 1News, carrying RNZ reporting, says some KiwiSaver managers are reducing or carefully managing exposure to big technology and AI-related companies after a period when those stocks drove a large share of global market growth but also showed volatility.
That is a useful moment for a wider reset in communication. Most KiwiSaver members are not choosing between semiconductor suppliers, hyperscaler balance sheets and AI software companies each morning. They are choosing a fund type, making regular contributions and hoping the long-term result supports a first home or retirement.
Murray Harris of Milford Asset Management said exposure to big tech and AI depends on views about valuations, price, risk and potential reward. Morningstar's Greg Bunkall said outcomes are likely to be driven by security selection rather than simply having a pro- or anti-AI stance. Generate's Greg Smith said some AI-related companies had extraordinary share-price runs this year. Those are sensible points, but they need translation for ordinary investors.
The translation is this: AI is not one investment. It is a theme spread across chipmakers, cloud providers, software companies, data-centre infrastructure, energy demand, productivity expectations and speculative hype. A fund can be exposed to AI in cautious or aggressive ways.
Fund managers should therefore report AI exposure in practical categories. How much of the fund sits in the biggest technology companies? How much return over the past year came from that exposure? What happens if valuations fall? Has the manager deliberately chosen to be underweight, market weight or overweight?
There is also a fairness issue. Passive funds that track global indices may become more exposed to big tech because those companies grow larger inside the index. Active managers may avoid some of that concentration and then look weak if tech keeps rising. Neither approach is automatically wrong. What matters is whether members understand the trade-off.
AI may become a lasting productivity shift, a valuation bubble, or both at different times. KiwiSaver members cannot control that. They can control whether they understand the fund they are in. Managers should make that easier by replacing thematic excitement with clear risk language, plain exposure numbers and honest explanations of what could go wrong as well as right.
