Tech-sceptic: What stocks the ACC is avoiding

The man managing $47 billion of state investments is sceptical of United States technology stocks like Tesla and Nvidia that are being fueled by artificial intelligence hype.

“History tells us that where there’s technological change going on like that, it’s hard to capture it all, and that the people who are the early adopters aren’t necessarily the long term winners,” ACC chief investment officer Paul Dyer told Markets with Madison.

“We look back to the previous tech bubble 20 years ago and that pattern’s very prevalent.”

The ACC’s fund is half weighted to bonds, with about one-third made up of domestic and global equities, including almost $1 billion worth of stock in Alphabet (Google’s parent), Microsoft and Apple. That portion was managed by eight external investment managers.

“They’ve tended to be light on those stocks rather than heavy and we can understand why.

“At one point, none of our managers held any Nvidia stocks.”

The ACC investment fund made a 7 per cent return in the most recent financial year, compared with the previous year’s negative 9 per cent return.

Its one of only two state investment funds in New Zealand - it’s about $18b smaller than the Superannuation Fund.

Dyer has led the investment teams at both funds in his career.

In the interview above, he discusses what makes a good investor, what the ACC looks for in infrastructure deals and why he likes Warren Buffett.

Get investment insights from the experts on Markets with Madison every Monday and Friday on the NZ Herald.

Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.

Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.