How exposed is your KiwiSaver to market wobbles?

The effects of falling US technology stocks on your KiwiSaver balance will depend largely on the type of fund you are in.Stocks dropped sharply on Thursday, US time. Media reports blamed the victory of anti-AI candidates in the US midterms, on top of existing fears about how sustainable technology companies' share prices are.A small number of technology companies' share market returns have risen recently, such as Nvidia, which has increased in price by more than 500 percent over five years, and Apple, which is up 127 percent over five years.The S&P500 also had its worst day since the introduction of US President Donald Trump's tariffs last year.In New Zealand, KiwiSaver investors in growth and high-growth funds generally tend to have the most exposure to share markets. How much exposure they have to technology stocks within that depends on the approach of managers.Passive funds tend to track indices. As technology stocks have become larger parts of those indices, they will have been added to KiwiSaver funds in larger allocations. Active managers decide what they believe is appropriate. Milford, for example, has limited its exposure to technology stocks through its active growth fund because of its concerns about the risk.An analysis of the top 10 holdings of high growth KiwiSaver funds, as reported by Sorted's Smart Investor tool, shows variation in how much of investors' money was in tech companies.Milford's aggressive fund had 26 percent in companies including Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, Broadcom and Micron. Generate's focused growth fund had 22.5 percent. Quay Street's High Growth had 21.6 percent and Kernel's 20.16 percent.While Milford has been cautious with its active growth fund, its aggressive fund was 5.4 percent invested in Microsoft, 4.56 percent in Nvidia and 4 percent Amazon.Pathfinder's High Growth had17.5 percent tech exposure and Simplicity's high growth 19.4 percent.The best performing of those funds over the past year has been Koura' Strategic High Growth fund, which founder Rupert Carlyon credited to being invested offshore.Kernel founder Dean Anderson said the latest drop was just part of the unpredictability of the market."The market is just being volatile at the moment on the back of trying to digest a lot of uncertainty and everyone is ultimately speculating on what moves a democratic House and Senate may make. So we actually have no visibility or clarity."These swings in the market are pure speculation as to what may come down the line. It's a great reminder for investors not to be trying to play that game. Overall, I think this is a real positive. I think actually it's kind of healthy to kind of just reset expectations and to dampen some of the euphoric sort of activity that was going on, not only with enlisted markets, but also what we've seen with, you know, some of the smaller AI-related companies in terms of the neocloud data centres."He said a fall in share prices could help ensure businesses were operating with a focus on sustainability and quality."Thinking about our high growth…we've got a reasonable allocation on high growth, about 10 percent, to global infrastructure and global property. Both of those are actually up 7 percent in the past month. So that's actually a great reminder about why being diversified and not just say buying US only and actually having some of these more boring allocations helps in periods like this."There has been significant dispersion in returns this year as those that have rode the technology wave have experienced much better results than those who hung back.While those with more exposure may experience more losses, they would have to drop significantly to undo the returns banked so far."If we still keep an eye on what's coming down the line, a lot of these companies are still demonstrating and delivering strong earnings growth," Anderson said."And there's still a lot of potential for AI, right? And so I wouldn't be extrapolating the sort of sell-off as interpreting this as that's the end of AI, or that's the end of chemical growth stocks over the next five years."Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make and spend money.