New Zealand Superannuation Fund Lowers Long-Term Return Forecast

Jo Townsend, CEO of the Guardians of New Zealand Superannuation, warned Wednesday that the U.S. equity market may be due for a correction. Despite the New Zealand Superannuation Fund growing 14.2% in the year ending June 30 to reach a value of 94.4 billion New Zealand dollars, Townsend cautioned that recent high returns are likely to slow.

Townsend noted that U.S. equity returns over the last two years have nearly doubled the annualized returns of the past 20 years, suggesting a "reversion to the mean." In response to this outlook, the fund reduced its active risk budget and lowered its long-term expected annual return from 7.8% to 7.2%.

This cautious stance aligns with views from Nicolai Tangen, CEO of Norges Bank Investment Management. Tangen recently stated that investors should not expect the same returns seen over the last six months.