Super funds’ allocations to international assets have passed 50 per cent for the first time as they hunt for diversification and superior risk-adjusted returns, according to the latest NAB Super Insights report.

That figure will continue to rise, with 63 per cent of respondents saying they expect to increase their international allocations over the next two years and only one fund saying it would reduce relative international exposure.

But while US tech stocks have driven much of super funds’ asset growth over the last decade, funds are growing increasingly ambivalent  about them, with 53 per cent of respondents saying they had a neutral view on whether to take an overweight or underweight in US tech over the next two years.

“The oligopolistic nature of US mega tech ensures they should remain attractive, in the near term however we see them as currently overvalued and therefore are owning less,” said one fund in the survey, while another said US tech stocks were “Overvalued with tariff headwinds”.

Funds are now considering higher allocations to listed equities in China and the emerging markets; they also want more Japanese and Indian equities, and European private equity and unlisted infrastructure. Frontier markets are still “a bridge too far” for most funds, though 17 per cent of respondents to the survey – largely from the medium and large fund segment – said they had invested or were considering investing in them, having identified potential opportunities in fixed income in Central and Eastern Europe, and in listed equities in Kazakhstan, the Philippines and Peru.

But while super funds might be reaching their limit on US tech stocks, AI and digitalisation is still the top thematic influencing investment decisions, closely followed by inflation/disinflation and opportunities in essential infrastructure.

“Also notable was that among funds specifying “Other” thematics, two cited liquidity management, and geopolitics and deglobalisation also rated mentions,” the report says. “Demographics, re-militarisation or re-industrialisation, and opportunities in healthcare or pharmaceuticals, were the thematics which polled poorly.”