--- title: "Australia's trillion-dollar pension fund: AI has no bubble at all, plans to increase positions on dips" type: "News" locale: "en" url: "https://longbridge.com/en/news/292034909.md" description: "Australia's leading pension fund UniSuper denies an AI bubble and plans to increase its holdings during declines in U.S. tech stocks. Its CIO, John Pearce, believes that AI is in a golden period of capital expenditure and that valuations are reasonable. The fund is overweight in NVIDIA, Microsoft, and others, with a return of 10.4% this fiscal year, marking its best performance in five years. Despite warning of inflation and financing risks, it still views pullbacks as buying opportunities" datetime: "2026-07-08T08:15:06.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/292034909.md) - [en](https://longbridge.com/en/news/292034909.md) - [zh-HK](https://longbridge.com/zh-HK/news/292034909.md) --- # Australia's trillion-dollar pension fund: AI has no bubble at all, plans to increase positions on dips Australia's leading pension fund UniSuper is ignoring market concerns about overvaluation of U.S. tech stocks and plans to continue increasing its positions in the sector during downturns, betting that AI will drive long-term profit growth for tech companies. The fund manages AUD 166 billion (approximately USD 115 billion), and its Chief Investment Officer John Pearce stated in an interview that the fund has long been overweight in U.S. tech stocks, which are currently in the golden phase of the AI capital expenditure cycle. **If the sector overall pulls back by 10%, institutions will increase their holdings.** Since the historical peak of U.S. tech stocks last month, global investor divergence has continued to widen. Some investors are concerned about intensified competition in the industry, believing that the massive AI investments by tech giants may not yield substantial returns. Conversely, another group of investors believes that this round of AI represents a generational technological transformation that can support years of upward momentum in the industry. Pearce denied that there is a bubble in the market, stating that **various valuation indicators do not exhibit bubble characteristics**. The capital investment scale of tech companies is substantial, but the fundamentals are solid, and there is ample room for growth, so the fund will continue to hold long positions. UniSuper has maintained an overweight position in U.S. tech stocks for several months, with international stocks accounting for about 35% of its standard investment portfolio. NVIDIA (NVDA), Microsoft (MSFT), and Apple (AAPL) are the top three holdings. This portfolio helped the fund achieve a return of 10.4% for the fiscal year ending June 30, marking its best performance in five years, significantly outperforming the approximately 9% return average of the Australian pension industry, while the Nasdaq 100 index rose 34% during the same period, and the U.S. semiconductor index surged nearly 160%. Pearce also cautioned that such extreme high returns cannot be sustained in the long term, as Australian pension returns have significantly exceeded the long-term neutral expectation of 7.5% in recent years. He predicts two core risks in the market over the next 12 months: > First, inflation may be stickier than expected, **which could lead the market to price in four rate hikes by the Federal Reserve, with the yield on 10-year U.S. Treasuries approaching 6%, directly ending this round of the U.S. stock bull market**; second, **heavy asset AI companies like Anthropic and OpenAI facing a financing slowdown could trigger a deep correction in the tech sector**. Even if risks materialize and trigger sell-offs, **as long as the risks are controllable, UniSuper will view declines as opportunities to increase positions**. Pearce believes that the market has adapted to a high-interest-rate environment, and when the yield on 10-year U.S. Treasuries rises to the 5% range, the stock market will still have upward momentum. The minutes from the Federal Reserve's meeting last month will be released on Wednesday evening, and trading institutions predict that Federal Reserve Chairman Kevin Warsh will tone down policy-related statements and weaken signals for rate hikes. Steve Englander, Head of North American Macro Strategy at Standard Chartered Bank, analyzed that **if the minutes completely avoid discussions related to rate hikes, the market will interpret it as a lack of tightening willingness from the Federal Reserve, thereby reshaping interest rate pricing.** ## Middle East conflict escalates again, oil prices rebound pushing up U.S. Treasury yields, Asian stock markets show increasing divergence On Wednesday, the geopolitical situation in the Middle East escalated again, compounded by the United States tightening sanctions related to Iranian oil. The market is concerned about the collapse of the ceasefire framework, leading to a rise in oil prices and a simultaneous sell-off in global bonds. Meanwhile, as funds flow out of the high-tech sector, the stock market, which had been rallying in that sector, is now teetering. U.S. and Brent crude oil prices surged 5% overnight, although still far below the wartime peak of over $120, they significantly raised inflation expectations, putting pressure on the bond market. Months of ongoing conflict have depleted global oil inventories, **greatly shrinking the buffer space for supply-side shocks.** The yield on the 10-year U.S. Treasury rose 3 basis points on Wednesday to 4.565%, reaching a one-month high, while the yield on the 30-year U.S. Treasury broke above 5%. Jason Wong, a senior strategist at Bank of New Zealand (BNZ) in Wellington, stated that **the market has shown a clear negative reaction to the Middle East attacks, but has not yet entered a state of full panic. European and American stock index futures are overall fluctuating within a narrow range.** David Chao, a strategist for Invesco in the Asia-Pacific global markets, commented that the geopolitical risk premium had already been gradually declining, and this round of conflict proves that there are still many variables in the peace agreement. Current Brent oil prices have not fully accounted for the supply risks brought about by ongoing friction in the Middle East. Data released this week showed that the U.S. Strategic Petroleum Reserve has fallen to its lowest level since 1983, significantly reducing the oil market's ability to withstand supply shocks. Asian markets experienced severe fluctuations, with Samsung Electronics suffering consecutive declines over two days, dragging down the South Korean market, even though the company forecasted a 19-fold increase in net profit, funds remained concentrated on taking profits at high levels. The KOSPI index closed at 7246.79 points, down 5.35% for the day, having retreated over 20% from its June peak, officially entering a bear market technically, although the cumulative increase for the year remains as high as 70%. Sara Perring, head of cash equity sales for JPMorgan in the Asia-Pacific region, stated that global funds are simultaneously taking profits on popular AI stocks, leading to increased volatility in the South Korean stock market, with foreign capital continuing to flow out. The Nasdaq Composite Index (IXIC) fell below its 50-day moving average overnight. The Nikkei 225 Index (N225) fell 2.11% on Wednesday, while Hong Kong stocks exhibited independent performance, with the Hang Seng Tech Index surging 5.02%, ranking among the best single-day performances of the year, as funds positioned themselves in oversold tech stocks at low levels ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [MSFL.US](https://longbridge.com/en/quote/MSFL.US.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [MSFU.US](https://longbridge.com/en/quote/MSFU.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [NVDB.US](https://longbridge.com/en/quote/NVDB.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [MSFO.US](https://longbridge.com/en/quote/MSFO.US.md) - [MSFD.US](https://longbridge.com/en/quote/MSFD.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [MSFX.US](https://longbridge.com/en/quote/MSFX.US.md) - [NVDG.US](https://longbridge.com/en/quote/NVDG.US.md) - [NVDO.US](https://longbridge.com/en/quote/NVDO.US.md) - [NVDW.US](https://longbridge.com/en/quote/NVDW.US.md) - [NVYY.US](https://longbridge.com/en/quote/NVYY.US.md) - [NYYY.US](https://longbridge.com/en/quote/NYYY.US.md) - [DIPS.US](https://longbridge.com/en/quote/DIPS.US.md) - [09388.HK](https://longbridge.com/en/quote/09388.HK.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [MSFW.US](https://longbridge.com/en/quote/MSFW.US.md) - [MSFY.US](https://longbridge.com/en/quote/MSFY.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) ## Related News & Research - [Microsoft Is Letting Go Employees Amid AI Investments And Xbox Restructuring](https://longbridge.com/en/news/291845965.md) - [King Slide posts record revenue in second quarter](https://longbridge.com/en/news/291825861.md) - ['A Change Is Coming,' Says Gil Luria About Microsoft Stock](https://longbridge.com/en/news/291852861.md) - [Nvidia Is Allegedly Delaying Its Kyber Rack-Scale Architecture by More Than 12 Months. 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