New Zealand Super Fund Warns of U.S. Stock Pullback After 14.2% Gain

1 articles · Updated · CNBC · Sep 16

Jo Townsend said U.S. equities may be due a correction, arguing recent annualized returns are nearly double their 20-year average and likely to revert.
The warning came as the New Zealand Superannuation Fund reported a 14.2% gain for the year to June 30, lifting assets to NZ$94.4 billion ($54.4 billion) and adding NZ$9.3 billion.
Those returns still trailed the benchmark by 0.1 percentage points, and Townsend said the fund has already cut its long-term expected annual return to 7.2% from 7.8% and reduced its active risk budget.
U.S. stocks remain central to the portfolio: at the end of December, the fund held NZ$31.7 billion in U.S. equities, led by a NZ$3 billion stake in Nvidia, with Apple, Microsoft, Alphabet and Amazon also in its top five.
The caution from the world's top-performing sovereign wealth fund echoes a similar warning from Norway's $2.3 trillion oil fund that investors should not expect the same recent pace of equity returns.