The latest iPhone might put a bit of a dent in your wallet, but you can take heart that your purchase will be helping to fund your retirement.
Apple remains the New Zealand Superannuation Fund’s single largest holding, with its shares in the tech giant valued at US$1.42 billion ($2.43b) according to its June 2023 disclosure statement, released earlier this week.
And it was up on the US$933m ($1.6b) in Apple stock that the Super Fund disclosed in December last year. The fund won’t say how many shares it owns now, or then - at least for global stocks - making it unknowable how much shifts in its portfolios are down to buying, selling, currency fluctuations or market movement.
To list the Super Fund’s top 10 tech company shareholdings is essentially to list its top stock holdings overall. Eight out of the top 10 holdings are technology companies. There are only two Super Fund holdings that would crash an overall top 10 - Johnson & Johnson ($279 million), which would come in at number nine, and JP Morgan Chase & Co ($220m) at number 10.
CEO Matt Whineray is not madly thumbing through analyst reports, nor scanning stock-picking threads on Reddit.
The fund owns its global portfolio through external managers, and to a large degree its holdings simply reveal what’s hot in tech - the sector that’s dominated the major US indices as Microsoft (ChatGPT maker Open AI’s largest backer), Google parent Alphabet and Meta have all ridden the AI wave this year. The thirst for AI tech also saw chip maker Nvidia rebound from its crypto mining slump, while Tesla’s fortunes have turned around this year after a selloff in 2022.
But it’s still interesting to see to which tech giants our retirement fortunes are tied, and the extent to which we’re invested (that $1.42b Apple holding represented 2.45 per cent of the Super Fund’s total $65.4b portfolio as of June 30).
And the Super Fund has also been an activist investor at times. After the Christchurch Call, it joined with other state-backed funds to push for governance reforms at Facebook owner Meta.
All of the measures for board-level changes were rejected (founder and chairman Mark Zuckerberg owned only 17 per cent of the firm but controlled 58 per cent of voting shares). The Super Fund wrapped up its campaign in 2021, saying changes had been made that were directly attributable to its campaign, including Meta strengthening its Audit and Risk Oversight Committee charter to explicitly include a focus on the sharing of content that violates its policies.
There are two Kiwi firms in the top 10: Fisher & Paykel Healthcare ($371m) and One NZ owner Infratil ($211m).
There’s also the proto-Kiwi Lanzatech, the biofuel maker that decamped from Auckland to Chicago in 2014, and reverse-listed on the Nasdaq in February.
Lanzatech is one of the few examples of a clear indication of the Super Fund’s returns. In its December 2022 disclosure, the Super Fund said it had invested a total US$87m ($146m) as it built a 17 per cent stake across two investments,. The most recent - US$60m ($102m) - was made in 2014. A 2021 disclosure valued the LazaTech holding at $120m. In its June 2023 disclosure - its first since the Nasdaq listing - the Super Fund valued its stake at $371m.
Outside of listed tech firms, the Super Fund also has a 45 per cent stake in Auckland-based IT services firm Datacom Group (the balance of shares are owned by the rich-list Holdsworth family). The fund doesn’t give a private equity valuation for Datacom, which made a net profit of $8m on $1.49b revenue in the year to June 30, 2023.
And through its small stake in Chinese conglomerate Tencent (valued at $66m), the Super Fund is indirectly supporting two of the biggest players in our local video gaming industry - West Auckland’s Grinding Gear Games (GGG), the first local studio to pass $100m in annual revenue (Tencent bought a majority stake in GGG in 2018 in a $100m-plus deal) and Dunedin and Auckland-based Rocketwerkz (in which Tencent has a 47 per cent holding).
The Super Fund owns stakes in around 200 publicly-traded Chinese firms, but many stakes are sub-$1m, although it does also own chunky stakes in Hong Kong-listed Alibaba Group ($43m) and EV maker BYD ($25m). The Super Fund’s investment in Hong Kong-listed telecommunications equipment maker ZTE is modest ($3.6m) but notable that the US Government has banned ZTE gear, citing security concerns (our Government has not, though its also worth noting that not everyone in the Super Fund’s orbit has been a fan of China).
Outside of its top 10, the Super Fund has stakes in lots of US-listed firms whose products you might regularly use or consume, including McDonalds ($120m), Pfizer ($114m), Adobe ($110m) and Netflix ($65m), Samsung and - to the possible joy or horror of Succession fans - the Murdoch family-controlled Fox Corporation ($53m).
Although the Super Fund - through various external managers - owns stakes in more than 3400 listed companies, there’s no room in its portfolio for two companies co-founded by Kiwis and now listed in the US: Rocket Lab and Allbirds.
Neither will be missed in terms of their stock market action: Rocket Lab listed on the Nasdaq at US$10.00 per share in August 2021 and was recently trading at US$4.09. Allbirds shot to US$26.03 when it listed in November 2021. Shares, hit by falling revenue and front-page Wall Street Journal claims that its shoes have lost their cool, were at US$0.90 earlier today.
The Herald understands the Super Fund decided to pass in 2018 when Rocket Lab raised US$140m ($239m) at a US$1b-plus ($1.7b) valuation. In the event, the round was led by the Australian Government’s sovereign wealth fund, the Future Fund, which reportedly booked a 50 per cent gain - and a A$1b ($1.09b) payday - when the Kiwi-American firm listed in late 2021.
In its June 2023 disclosure statement, the Future Fund lists Rocket Lab at 29 on the list of its top 100 holdings, putting the value of its stake at A$264m ($288m).
The Future Fund’s top three holdings are an all-Australian affair: mining and energy giant BHP (A$2.14b), ASB parent CommBank (A$1.6b) and biotech firm CSL (A$1.24b) before a tumble of US tech stocks.
Overall, the Super Fund lost $102m in value, after costs, versus its reference portfolio in the year to June 30, 2023, according to its annual report released earlier this week (it finished the period worth $65.4b; today it stands at $62.5b as global markets have faced more headwinds).
Read more about the fund’s 2022/23 performance here.
Investors are waiting for next week's pivotal interest rate decision.