It’s called a “technology fund.” It barely owns any software companies.
If you had put $10,000 into this fund back in September 2018, you would be sitting on roughly $38,000 today. Most of that growth did not happen slowly over those seven years. It happened in the last twelve months alone.
The fund in question is the BGF Next Generation Technology Fund, one of BlackRock’s flagship global technology bets. It returned 86.92% over the past year. Its benchmark, the MSCI All Country World Index, returned 23.67% over the same period. That is not a fund beating the market. That is a fund lapping it three times over.
Before we get into why, let’s answer a simpler question. What even is a “Global Fund”?
Think of it like this. A Global Fund pools money from investors like you and invests it in stocks around the world. Nothing complicated there.
What makes it “global” isn’t where it invests. It’s where it’s registered. Almost every Global Fund on Vested is registered in Europe, under a rulebook called UCITS. That’s the reason a fund managed out of Luxembourg can be sold to an investor in Mumbai just as easily as one in Frankfurt.
UCITS also comes with some built-in guardrails. The fund can’t dump all its money into one stock. It has to stay liquid enough to let you exit any business day. And your money sits with an independent custodian, not the fund manager itself.
One more perk worth knowing. Because UCITS funds sit outside the US tax system, they help Indian investors sidestep the hefty US estate tax that comes with holding US stocks directly. We’ll dig into that in a later part of this series.
None of this tells you if a fund is good or bad. It just tells you the rules it plays by. What the fund manager actually does within those rules is a different story altogether. And that’s where things get interesting.
So the real question isn’t “should I buy this because it’s up 86%.” It’s “why is it up, and what happens when it isn’t?”
This is Part 1 of Decoding Global Funds, where we crack open the funds on Vested and show you what’s actually inside. Let’s get into it.
What is this fund actually betting on
Despite the name, this isn’t a fund that owns “technology” in the way you’d expect.
It doesn’t hold much Apple, Microsoft, or Google. Software makes up just 5.11% of the portfolio, compared to 21.39% for its benchmark. That’s a massive, deliberate underweight.
Instead, the fund is a concentrated bet on the physical infrastructure that makes AI possible. Semiconductors and semiconductor equipment alone make up 43.09% of the fund, nearly 1.5 times the benchmark’s weight. Add electronic equipment and instruments (18.87%) and technology hardware and storage (7.61%), and you’re looking at a portfolio where roughly 70% of the money sits in chips, chip-making equipment, and the hardware layer around them.
Think of it this way. If most tech funds are betting on the apps and platforms, this fund is betting on the factories, machines, and materials that build the chips those apps run on.
Who’s actually in the portfolio?
The fund holds 87 stocks, but the top 10 already account for over a third of it (36.30%). Here’s where the money is concentrated: Notice something.
Nvidia, the poster child of the AI boom, isn’t even the top holding. SK Hynix, the South Korean memory chip maker that supplies high-bandwidth memory for AI accelerators, is.
This tells you the fund managers, Tony Kim and Reid Menge, aren’t just chasing the obvious AI names. They’re positioned across the entire memory and semiconductor supply chain, including names most retail investors have never heard of, like Ibiden (a Japanese substrate maker) and Elite Material (a Taiwanese materials supplier).
That’s a very different kind of “tech fund” than the Nasdaq-100 trackers most people default to.
Where in the world is this money
Geographically, this fund looks less like a US tech fund and more like a global chip supply chain map. Around 60% sits in the United States, but the next biggest allocations are Taiwan (~13%) and South Korea (~7-8%), home to TSMC’s ecosystem and the memory duopoly of Samsung and SK Hynix. Japan, Israel, and Hong Kong round out meaningful chunks of the rest.
For Indian investors used to thinking of “global tech exposure” as a US story, this is a reminder that the actual manufacturing and materials backbone of AI is heavily East Asian.
The part everyone skips: the risk
Here’s where we put the brakes on for a second, because the return numbers only tell half the story.
This fund carries a 7 out of 7 risk rating, the highest band possible. Look at its calendar year returns and you’ll see why:
In 2022, while the broader market fell 18%, this fund fell over 50%. That’s not a typo.
A fund this concentrated in semiconductors, a notoriously cyclical industry, will amplify both the booms and the busts.
The current 86% one-year rally has to be read against that backdrop. This is a fund that can hand you extraordinary gains and equally extraordinary drawdowns, sometimes within the same three-year window.
The valuation also reflects the market’s excitement.
The fund’s Price to Earnings ratio sits at 74.26x, roughly triple what you’d pay for the broader global market.
You’re paying a steep premium for growth that has to keep showing up.
The fund barely touches mid-caps
Large cap stocks, above $10 billion, make up 95.35% of the fund, against 68.72% for the benchmark. Mid caps, between $2 and $10 billion, sit at just 0.96%, compared to 26.24% for the benchmark. Small caps trail similarly at 2.54% versus 5.04%.
The benchmark holds over a quarter of its weight in mid-cap companies. This fund holds almost none. Every dollar here is riding on companies that have already become giants, which is part of why the fund swings so hard. Mega-cap semiconductor names tend to move together on the same macro triggers, whether that’s AI capex cycles, export controls, or memory pricing, so the “87 holdings” number overstates the real diversification on offer.
The management team has changed more than once
Before June 2020, Tony Kim ran the fund solo. From June 2020 to September 2022, he was joined by Reid Menge. Between September 2022 and September 2023, a third manager, Caroline Tall, joined the team, before the fund reverted to just Kim and Menge from September 2023 onward.
Tall’s arrival lines up closely with the fund’s August 2022 name and mandate change, and her departure came about a year later. It’s a transition that fund literature rarely spells out, but worth knowing before treating the current strategy as a settled, long-running approach.
The growth chart tells the drawdown story better than any single number
The fund’s “Growth of $10,000 since launch” chart peaks around $27,000 to $28,000 in early-to-mid 2021, then falls back to roughly $13,000 to $14,000 through 2022, wiping out close to half its gains, before the current rally carries it up to around $38,000. The benchmark line over the same stretch looks comparatively flat and uneventful.
It’s the same fund, but a wildly different experience depending on exactly when an investor happened to get in.
The fund’s vitals
For those who like the full picture before deciding anything:
- Structure: UCITS, domiciled in Luxembourg
- Inception: September 2018
- Fund size: USD 3.55 billion (as of July 2026)
- Benchmark: MSCI All Country World Index (Net)
- Expense ratio (ongoing charges): 1.80%
- SFDR classification: Article 8 (promotes ESG characteristics)
- MSCI ESG Fund Rating: A
- Since inception return: 19.17% annualised, vs 12.17% for the benchmark
Wait, what does “A2” actually mean?
You’ll notice the fund’s full name on the factsheet reads “BGF Next Generation Technology Fund, Class A2.” That A2 isn’t decoration, it quietly tells you how much you pay and what happens to your returns.
Fund houses like BlackRock don’t sell just one version of a fund. They split the same underlying portfolio, the same stocks, the same managers, the same strategy, into multiple share classes aimed at different investors. Think of it like a flight: everyone lands at the same destination, but economy, premium economy, and business class pay different prices for a different level of service.
The letter tells you the investor category and fee structure. Class A is the standard retail class, the one most individual investors, including anyone buying through Vested, will encounter, and it’s built to include the cost of distribution through platforms and advisors. Other letters exist too: Class D is usually aimed at fee-based platforms with a lower ongoing fee, Class I is institutional with much lower fees but minimums running into hundreds of thousands or millions of dollars, and Class X sits even further up the institutional chain.
The number tells you what happens to income the fund earns. A2 means accumulating: any dividends or income from the underlying holdings get reinvested straight back into the fund rather than paid out to you as cash. Your unit price grows to reflect it instead. A distributing class, often labelled differently, would pay that income out to you periodically.
For a fund like this one, where the entire case is capital growth from semiconductor names rather than dividend income, accumulating is the logical default. You’re here for the compounding, not a quarterly cheque.
The takeaway: two investors in Class A2 and Class I2 of this exact same fund own exposure to the exact same 87 stocks. What differs is how much of the return the fee structure eats, and whether income shows up as cash or gets folded back in. Always check which class a return figure belongs to before assuming it’s the one you’ll actually get.
So should you buy it
That’s not really the question this series is here to answer. The point of Decoding Global Funds isn’t to hand out buy or sell calls. It’s to make sure that when you do put money into a global fund through Vested, you know exactly what’s inside the box, not just the headline return sitting on top of it.
A fund up 86% in a year sounds like an obvious win. A fund that’s 43% concentrated in semiconductors, carries a 7/7 risk score, and fell 50% just three years ago is a very different conversation. Both of those descriptions are the same fund.
If you want to actually understand how to read a fund factsheet like this one, from expense ratios to sector breakdowns to why benchmarks matter, that’s exactly what we’re building out on GlobEd, Vested’s global investing education initiative. Decoding Global Funds is just one part of it. Stick around for Part 2.
This article is for educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Please read all fund documents carefully before investing.
