Sovereign fund predicts U.S. stock correction
The New Zealand Sovereign Wealth Fund indicates the possibility of an upcoming sharp correction in the U.S. stock market, noting that the record-breaking yields achieved by Wall Street in recent years are unsustainable and are likely to revert to historical averages. The fund, considered one of the world's top sovereign wealth funds, achieved an annual return of 14.2% by the end of the fiscal year in June, with a focus on diversifying its portfolio from U.S. stocks to alternative assets, real estate, and private markets. Based on this, the fund has lowered its long-term annual return target from 7.8% to 7.2%, reducing risks accordingly, even though its largest investments remain in major technology companies such as Nvidia, Apple, and Microsoft, with a total value of NZD 31.7 billion. These forecasts serve as a warning to investors about a potential decline in U.S. market performance due to geopolitical risks and global inflation.
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