{"id":1303,"date":"2025-08-28T03:20:23","date_gmt":"2025-08-28T03:20:23","guid":{"rendered":"https:\/\/www.worldpumpnews.com\/?p=1303"},"modified":"2025-08-28T03:20:23","modified_gmt":"2025-08-28T03:20:23","slug":"new-zealand-wealth-fund-bets-european-stocks-will-beat-us-over-coming-decade","status":"publish","type":"post","link":"https:\/\/www.worldpumpnews.com\/?p=1303","title":{"rendered":"New Zealand wealth fund bets European stocks will beat US over coming decade"},"content":{"rendered":"<p><\/p>\n<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=ba559f94-9e95-49f3-b9bc-831482c8bc79\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Investment chiefs at the world\u2019s best performing sovereign wealth fund are betting that European stocks will outshine their transatlantic rivals over the coming decade, in a sign that some global asset owners are losing confidence in the long-term outlook for US equities.\u00a0<\/p>\n<p>Brad Dunstan and Will Goodwin, co-chief investment officers at New Zealand\u2019s NZ$76bn ($44bn) Super Fund, told the Financial Times in an interview that the European stock market was the fund\u2019s largest \u201coverweight\u201d position versus its reference portfolio, as it takes tactical positions on markets it thinks will perform best.\u00a0\u00a0\u00a0<\/p>\n<p>\u201cMost recently, we have been short the US and long European equities\u2009.\u2009.\u2009.\u2009and that\u2019s purely a view on equity valuations,\u201d said Dunstan, adding that decisions to favour different markets were taken \u201con a 10-year view\u201d.\u00a0<\/p>\n<p>At the end of June, the fund was overweight European equities by 2 per cent and underweight US stocks by 3.5 per cent in its \u201cstrategic tilting\u201d mandate, where it expresses equity price views. For commercial reasons, the managers do not disclose the timing of positions taken. <\/p>\n<p>Their investment position centres on a view that European equities \u2014 measured by the Stoxx Europe 600 index \u2014 are currently priced below their \u201cfair value\u201d, while US stocks are priced above that level and at some point in the next decade will give up that premium.\u00a0<\/p>\n<p>\u201cThere\u2019s going to be more inflation risk in the US,\u201d said Dunstan, adding that the impact of President Donald Trump\u2019s tariffs was largely \u201cnoise\u201d for long-term asset owners. However, he said, the outlook for US interest rates made him and his colleagues believe that US stocks \u2014 which currently trade on a price-to-earnings ratio of 27.5 times \u2014 were overvalued. <\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A443ed534-4040-4d30-83a4-8d7430bc51b0?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A443ed534-4040-4d30-83a4-8d7430bc51b0?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A443ed534-4040-4d30-83a4-8d7430bc51b0?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=3 3x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A443ed534-4040-4d30-83a4-8d7430bc51b0?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=4 4x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A443ed534-4040-4d30-83a4-8d7430bc51b0?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=5 5x\" width=\"3500\" height=\"2500\"\/><source media=\"(max-width: 490px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A184e74af-e47c-4afc-8ad7-728ee124c6a8?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A184e74af-e47c-4afc-8ad7-728ee124c6a8?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A184e74af-e47c-4afc-8ad7-728ee124c6a8?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=3 3x\" width=\"1500\" height=\"2000\"\/><img decoding=\"async\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2Ff44054d0-776e-11f0-a676-ade7a53a3158-standard.png?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1\" alt=\"Column chart of annual return % showing NZ Super Fund has consistently beaten its reference portfolio\" data-image-type=\"graphic\" width=\"3500\" height=\"2500\" loading=\"lazy\"\/><\/picture><\/figure>\n<p>His comments come as European stocks \u2014 trading on a PE ratio of about 16 times \u2014 have lost ground against their US rivals in recent months, as Trump has dialled back his most radical tariff threats and earnings in corporate America have remained resilient.\u00a0<\/p>\n<p>On a 10-year view, the performance of equities in the world\u2019s largest economy has far outstripped that of their European peers, with the S&amp;P 500 index up more than 310 per cent on a total return basis, compared with 115 per cent for the Stoxx Europe 600.\u00a0<\/p>\n<p>According to data platform Global SWF, NZ Super Fund \u2014 which began investing in 2003 and employs 79 people in its investment team in Auckland \u2014 has been the best performing sovereign wealth fund over the past 10 and 20 years, with annualised returns of more than 10 per cent.\u00a0<\/p>\n<p>Dunstan said this was because the fund takes \u201ca lot of risk\u201d, which has been rewarded over the past two decades. He said the fund\u2019s \u201ctotal portfolio\u201d approach allowed managers to be \u201cpretty agile in terms of how we focus the fund\u201d, which had enabled it to outperform other funds with a similar growth strategy.\u00a0<\/p>\n<p>The total portfolio approach assesses risk across the whole portfolio, in contrast with the traditional method of setting a framework for how much you will invest in certain assets, through a strategic asset allocation, which can make delivering changes outside those boundaries more time-consuming.<\/p>\n<p>NZ Super Fund\u2019s preference for Europe also extends to private equity, where Goodwin said there was a \u201cgood opportunity\u201d. He looks for \u201cyounger, hungrier managers\u201d where NZ Super can be a large investor in a PE fund and forge strong relationships with the managers of the companies the fund invests in.\u00a0<\/p>\n<p>He added that while PE was a necessary component of the portfolio, given the trend for companies to stay unlisted for longer, some PE funds were currently under pressure as investors started to realise \u201cthe markets aren\u2019t necessarily there\u201d for the price levels PE funds are putting on their own assets. <\/p>\n<p>NZ Super Fund has about 5 per cent of its portfolio invested in private equity. Goodwin said he did not expect the asset class to become a \u201clarge structural part of our portfolio\u201d.\u00a0<\/p>\n<\/div>\n<p>#Zealand #wealth #fund #bets #European #stocks #beat #coming #decade<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Investment chiefs at the world\u2019s best performing sovereign wealth fund are betting that European stocks will outshine their transatlantic rivals over the coming decade, in a sign that some global asset owners are losing confidence [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1304,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[864,863,625,865,279,862,280,861,860],"class_list":{"0":"post-1303","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-beat","9":"tag-bets","10":"tag-coming","11":"tag-decade","12":"tag-european","13":"tag-fund","14":"tag-stocks","15":"tag-wealth","16":"tag-zealand"},"_links":{"self":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1303","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1303"}],"version-history":[{"count":0,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1303\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/media\/1304"}],"wp:attachment":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1303"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1303"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1303"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}