"U.S. Stock Market Correction Likely," World's Top-Performing New Zealand Pension Fund Warns

[Financial News]  

New Zealand’s best-performing pension fund warned on the 16th (local time) of a correction in the U.S. stock market.
The Government Pension Fund Global, the world’s largest sovereign wealth fund, also said recently that it was preparing for a market correction.
According to CNBC, Jo Townsend, CEO of Guardians of New Zealand Superannuation, which manages NZ$94.4 billion (approximately 74 trillion won), issued the warning while announcing the fund’s investment performance.
The New Zealand pension fund recorded a 14.2% return in an analysis of global sovereign wealth funds earlier this year, making it the world’s best-performing sovereign wealth fund.
Townsend said the fund’s performance for fiscal 2026, which ended on June 30, was exceptionally strong. However, she warned that the stock market rally of recent years could slow going forward.
She expressed concern, saying, "Over the past several years, returns on U.S. stocks have come close to twice the annual returns recorded over the previous 20 years." She added, "Given that, there could be some reversal at some point. A concentrated portfolio may deliver strong performance in the short term, but we strongly believe that a diversified portfolio will be more appropriate for our long-term mission."
The New Zealand pension fund recorded an average annual return of 9.68% over the past 20 years. However, it lowered its long-term expected annual return from 7.8% to 7.2% earlier this year. Townsend explained on the 16th that the adjustment reflected the high likelihood of lower returns on equity investments.
The New Zealand pension fund, which discloses its holdings every six months, held NVIDIA as its largest position as of December last year, with NZ$3 billion invested in the company. Along with NVIDIA, Apple, Microsoft, Alphabet, and Amazon ranked first through fifth in the portfolio.
Nicolai Tangen, CEO of Norges Bank Investment Management, which manages the world’s largest Government Pension Fund Global, also told CNBC in an interview late last month, "We should not expect the same kind of returns we saw over the past six months to continue." His remarks underscored the need to prepare for weaker stock market returns.
Norges Bank Investment Management manages Norway’s oil fund, valued at $2.3 trillion. Its net profit reached a record $185 billion in the first half of this year.


[email protected] Song Kyung-jae Reporter