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Most global technology funds end up looking similar: a large weight in the same handful of U.S. mega-caps, arranged slightly differently (in terms of portfolio).
However, the BGF Next Generation Technology Fund is built on a different premise. Its largest position is a Korean memory-chip maker, and software – the sector most people associate with tech investing makes up just over 5% of the portfolio.
For an Indian investor, assembling that kind of exposure stock by stock is difficult. The names across exchanges in Korea, Taiwan, Japan and Israel, many of them unfamiliar, and several are suppliers rather than household brands. A single fund does the assembling for you.
The BGF Next Generation Technology Fund is managed by BlackRock and held 87 companies. It launched in September 2018, which gives it a track record of a little under eight years, which is shorter than most funds in this series, and with one important caveat we’ll come to.
The performance record is decent too. Since inception, the fund has returned 19.17% annualised (net of fees, as of 30 June 2026), against 12.17% for its comparator index.
However, what a headline return figure can’t tell you is why the fund behaves the way it does. That comes down to what it is mandated to buy, what it actually holds today, and how concentrated it is and those are also the things that decide whether it suits you.
So that’s what the rest of this post covers: the mandate the managers work to, what in the portfolio today, how the performance breaks down year by year, who runs it, and where a fund like this does and doesn’t fit in a portfolio.
Key facts at a glance (as of Jun 2026)
| Fund | BGF Next Generation Technology Fund |
| Share class | U.S. Dollar (accumulating) |
| ISIN | LU1861215975 |
| Asset manager | BlackRock (Luxembourg) S.A. |
| Fund launch date | 4 September 2018 |
| Fund size | $3,618.73 million |
| Number of holdings | 87 |
| Portfolio managers | Tony Kim, Reid Menge |
| Annual management fee | 1.50% |
| Risk indicator | 6 out of 7 |
| Domicile | Luxembourg |
All figures from the BlackRock Global Funds factsheet, June 2026.
Why BlackRock and what makes this fund different?
BlackRock is the world’s largest asset manager with over $15 trillion in total assets under management. Its BlackRock Global Funds (BGF) range is a UCITS offering – UCITS being the European regulatory framework that lets a single fund be sold to retail investors across many countries, and the structure most international funds available to Indian investors are built on.
This particular fund is one of BlackRock’s more specialised technology strategies. It launched on 4 September 2018 and holds around $3.6 billion in assets.
What distinguishes the fund today is where it looks. It is measured against the MSCI ACWI SMID Growth/Information Technology Index – “SMID” meaning small and mid capitalisation. The mandate allows the managers to hold large, medium and small companies, and the intent is exposure to emerging technology rather than to the established platform giants. As we’ll see in the holdings, the portfolio has ended up considerably more large-cap than that benchmark, which is itself a manager decision worth understanding.
The fund is also classified Article 8 under SFDR, meaning it promotes environmental, social and governance characteristics and applies an ESG screen. BlackRock names this as a risk in its own factsheet: the screen reduces the investable universe, and that can help or hurt relative to a fund without one.
What’s inside: Strategy, exposure, and performance
Strategy
The fund’s stated aim is to maximise return through a combination of capital growth and income, invested in a way consistent with ESG principles. At least 70% of total assets must be in equities of companies globally whose predominant economic activity is the research, development, production or distribution of new and emerging technology.
BlackRock lists the themes the fund focuses on: artificial intelligence, computing, automation, robotics, technological analytics, e-commerce, payment systems, communications technology and generative design.
It is actively managed, which here buys two specific things.
First, the freedom to hold the supply chain rather than the brands, such as memory, optical components, test equipment, foundry capacity.
Second, the freedom to deviate sharply from the benchmark, which the managers have used. Deviation cuts both ways, and the performance section shows both directions.
Regional and sector exposure
Geographically, this is one of the less U.S.-concentrated technology funds available.
| Country | Fund (%) | Benchmark (%) |
| United States | 61.98 | 62.78 |
| Taiwan | 12.24 | 10.47 |
| Japan | 6.54 | 9.84 |
| Korea (South) | 6.32 | 1.69 |
| Cash and/or derivatives | 3.62 | 0.00 |
| Israel | 3.51 | 2.69 |
| Hong Kong | 2.67 | 0.43 |
| Canada | 1.30 | 1.07 |
| Germany | 1.03 | 0.84 |
| China | 0.69 | 3.03 |
| Other | 0.11 | 7.16 |
Roughly 62% is in the U.S., with the remainder spread across Asian and Israeli hardware ecosystems. Korea at 6.32% and Hong Kong at 2.67% are both well above benchmark weight; China at 0.69% is well below.
The sector picture is where the fund departs most from a conventional tech portfolio.
Figure 2: Sectoral breakdown. Source: Fund factsheet
Semiconductors and electronic equipment together account for exactly 60% of the fund. Software, at 5.36%, is roughly a quarter of its benchmark weight. If you already own a tech fund or ETF, it is likely to be software- and platform-heavy; this one is not, and that difference is the most useful thing to know about it.
By market capitalisation, 92.63% of the fund sits in large caps above $10 billion, against 69.73% for the benchmark, with mid caps at just 1.08% versus 25.75%. Despite the SMID mandate, the portfolio as of June 2026 is decisively large-cap.
Top holdings
| Holding | Weight (%) |
| SK Hynix Inc | 6.32 |
| Lumentum Holdings Inc | 3.75 |
| Micron Technology Inc | 3.74 |
| SanDisk Corp | 3.64 |
| Tower Semiconductor Ltd | 3.43 |
| KLA Corp | 3.37 |
| NVIDIA Corp | 3.19 |
| Ibiden Ltd | 2.89 |
| Space Exploration Technologies Corp | 2.87 |
| Credo Technology Group Holding Ltd | 2.68 |
| Total | 35.88 |
Two observations. SK Hynix at 6.32% matches the fund’s entire Korea weight, so the country exposure is effectively a single position. And Space Exploration Technologies — SpaceX — is a privately held company, meaning the fund holds at least one unlisted position. [TK — editor to confirm from the prospectus how unlisted holdings are valued and whether there is a stated cap on them, then add one sentence here. This is likely to draw a compliance question.]
At 35.88%, the top 10 is meaningfully less concentrated than many high-conviction tech funds, though the portfolio is concentrated by sector rather than by stock.
Performance
All figures net of fees, as at June 2026.
| 1y | 3y (ann.) | 5y (ann.) | Since inception (ann.) | |
| Fund | 86.92% | 36.35% | 7.71% | 19.17% |
| Comparator (MSCI ACWI Net) | 23.67% | 19.70% | 10.98% | 12.17% |
Cumulative returns over shorter periods: 2.87% over one month, 60.06% over three months, and 55.83% year to date.
Calendar year returns show the pattern more plainly.
| Year | Fund (%) | Comparator (%) |
| 2019 | 47.91 | 26.60 |
| 2020 | 115.25 | 16.25 |
| 2021 | 1.55 | 18.54 |
| 2022 | –50.76 | –18.36 |
| 2023 | 32.56 | 22.20 |
| 2024 | 22.94 | 17.49 |
| 2025 | 23.64 | 22.34 |
Two years stand out in opposite directions: a 115.25% gain in 2020 and a 50.76% loss in 2022, against a 18.36% fall for the comparator in the same year. The three-year standard deviation is 30.23, and BlackRock places the fund at 6 on its 1-7 risk scale.
On costs: the annual management fee is 1.50%. There is no performance fee. All returns quoted above are already net of these charges as the fee is reflected in the NAV rather than billed separately.
Meet the managers: Tony Kim and Reid Menge
In a passive fund, the manager is close to irrelevant as the index decides what you own. In this one, the managers decide, and the portfolio sits a long way from its benchmark: software is roughly a quarter of its benchmark weight, semiconductors are nine points above, and mid caps are almost absent despite a small- and mid-cap benchmark. Those are people making decisions, not a formula.
So it’s worth knowing who they are.
The fund is run jointly by Tony Kim and Reid Menge, both Managing Directors in the Fundamental Equities division of BlackRock’s Portfolio Management Group. Neither manages this fund in isolation as both are part of the team that runs BlackRock’s technology equity strategies globally, of which this fund is one.
Tony Kim
Tony Kim heads the Global Technology Team within BlackRock’s Fundamental Equities division and is lead portfolio manager across its technology strategies, including the BlackRock Technology Opportunities Fund. He joined BlackRock in 2013 from Artisan Partners, where he had been a senior research analyst from 2006. Before that he spent 2001 to 2006 at Credit Suisse Asset Management, covering technology for the U.S. large-cap funds and managing a global internet and software sector fund. His earlier career included roles at Neuberger Berman, Merrill Lynch and SG Warburg.
His background is unusually engineering-weighted for a fund manager: a BS in engineering from the University of Illinois (1989), followed by an MBA from Columbia (1994). He also sits on the advisory board of Columbia Business School’s Digital Future Initiative. BlackRock describes his career as focused exclusively on the technology sector throughout.
Reid Menge
Reid Menge is co-portfolio manager on the technology equity portfolios and is responsible for coverage of the technology sector. He also heads BlackRock’s Fundamental U.S. Growth Team and is lead portfolio manager on the BlackRock Capital Appreciation, Large Cap Focus Growth and Mid-Cap Growth Equity funds so his day-to-day work spans growth investing more broadly, not technology alone.
He came to BlackRock in 2014 from UBS, where he was an associate director of equity research covering global technology. Before that he was a research analyst at Citigroup responsible for global software (2006–2009) and covered enterprise software at Prudential Equity Group (2003–2006). He began his investment career in 2001 at Credit Suisse First Boston. He was appointed a Managing Director of BlackRock in 2023.
What the pairing tells you
The two backgrounds are complementary rather than duplicative, and the portfolio reflects it.
Kim’s history is in hardware-inflected, globally sourced technology research; Menge’s is in software equity research and U.S. growth. A fund with 41% in semiconductors, meaningful weights in Korea, Taiwan, Japan and Israel, and only 5% in software is closer to the first of those than the second.
One further piece of context is relevant to this fund’s unlisted holding.
In February 2025, Kim and Menge were appointed portfolio managers of what was then the BlackRock Innovation and Growth Term Trust, which was simultaneously renamed the BlackRock Technology and Private Equity Term Trust and given a mandate to invest at least 80% of assets in a combination of listed technology companies and privately held ones. That is a separate vehicle with a separate mandate but it does mean the team works with private technology holdings elsewhere, which is worth knowing when you see SpaceX in this portfolio.
Where a fund like this can fit in a global portfolio
- Thematic depth rather than thematic breadth. The fund gives access to the hardware layer underneath AI and automation with memory, optical, test, foundry and packaging rather than the software and platform companies that dominate most tech indices. That is a specific bet, not a general one.
- Global access, local simplicity. The holdings span the U.S., Taiwan, Japan, Korea and Israel. Through Vested, you can invest via the LRS route with INR converted to USD automatically, from a minimum of $10, and hold it alongside your U.S. stocks and ETFs in one place — without a foreign broking account.
- Diversification away from the usual names. Most Indian investors with global exposure already own the U.S. mega-caps, often several times over across different funds. SK Hynix, Ibiden, Tower Semiconductor and Lumentum are unlikely to appear in those holdings.
- Active allocation, not indexing. Positions here are chosen by conviction rather than by market capitalisation, and the portfolio differs substantially from its own benchmark. That is the source of both the 2020 result and the 2022 result.
When to invest and when not yo
When it may make sense:
- You want exposure to the semiconductor and hardware layer of technology specifically, and you understand that is different from broad tech.
- You already hold a global or U.S. equity core and are adding a small, deliberate satellite position.
- You can hold through a drawdown of the size the fund experienced in 2022 without selling.
- You have a horizon of several years and are not relying on this money in the interim.
When it may not be the right fit:
- You need the money within the next few years, or you want capital preservation. A fund that has fallen more than 50% in a single calendar year is not suitable for either.
- You already hold significant technology or U.S. growth exposure. Adding this increases concentration rather than reducing it, even though the names differ.
- You want income. This is an accumulating share class an “acc” class reinvests all gains into the NAV rather than paying them out, so it produces no dividends.
- You prefer low-cost passive exposure like ETF. At an ongoing expense ratio, this fund needs to outperform its benchmark by some margin simply to match it after costs.
- You want a diversified fund. This one holds no energy, healthcare or financials exposure, and 60% of it sits in two closely related sectors.
The general point holds: a fund this focused works as a satellite allocation, not as the centre of a portfolio.
Conclusion
The BGF Next Generation Technology Fund does something few technology funds do — it goes down the stack, into the companies that supply the infrastructure rather than the ones that sell to consumers. For an investor who already owns the familiar names, that is a genuinely different exposure.
It is also a volatile one. The record contains a 115% year and a –51% year, the fund carries BlackRock’s second-highest risk rating, and its five-year annualised return currently sits below its comparator index. The strategy also changed materially in August 2022, so the longer-run figures describe two different funds stitched together.
If you’re considering it, it’s worth a closer look at the factsheet and prospectus directly rather than relying on any summary, including this one. Just make sure it fits your time horizon, risk appetite, and overall allocation plan.
Disclosure:
All specific financial and performance information is sourced from research and commentary by Bloomberg, Fidelity Funds Factsheet, and Morningstar fund ratings. It is not a recommendation to buy or sell any security. All investments carry risk, including the possible loss of principal. Past performance is not indicative of future results. Investors should review a fund’s prospectus and risk factors before investing. Securities offered through VF Securities, Inc., Member FINRA/SIPC.
