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[New Zealand Superannuation Fund Warns of Potential US Stock Market Correction, Long-Term Return Expectations Lowered] (1) The investor behind the world’s best-performing sovereign wealth fund warned on Wednesday that the US stock market may face a correction. Joe Townsend, CEO of the New Zealand Superannuation Fund’s guardian, warned of a potential downturn, while disclosing that the fund’s $54 billion New Zealand wealth fund grew by 14.2% in the year to June 30. (2) The New Zealand Superannuation Fund, valued at NZ$94.4 billion ($54.4 billion) at the end of fiscal year 2026, was ranked the world’s best-performing sovereign wealth fund earlier this year by analytics firm Global SWF. The guardian said on Wednesday that the fund’s return for the fiscal year meant an annual growth of NZ$9.3 billion, but was 0.1 percentage points lower than the benchmark index. (3) Despite Townsend saying the fund’s performance in 2026 was exceptional, she warned that the returns enjoyed by stock market investors in recent years may slow down. She said that US stock returns in the past few years have been close to twice the annualized returns of the past 20 years, so a mean reversion is expected at some point; a concentrated portfolio can yield strong results in the short term, but a more diversified portfolio is more suitable for the fund’s mission in the long term. Over the past 20 years, the wealth fund has achieved an average annual return of 9.68%. (4) Earlier this year, the guardian lowered the fund’s long-term expected annual return from 7.8% to 7.2%. Thomson said on Wednesday that this reflects the fund management team’s view that stock returns may decline; the fund has also reduced its active risk budget. (5) The fund publishes its portfolio holdings every six months, and the latest update reflects the portfolio at the end of December last year: the most valuable position is NZ$3 billion worth of Nvidia shares, with Apple, Microsoft, Alphabet and Amazon making up the rest of the top five holdings; as of the end of last year, its US stock portfolio was worth NZ$31.7 billion. (6) The New Zealand Wealth Fund was established in 2001 to make pension costs more affordable for New Zealand’s aging population and will also allocate capital to timber, real estate, private equity markets and other alternative assets. The first withdrawal is expected in 2054. (7) Thomson’s view on the stock market outlook echoes the recent warnings from the head of the management team of the Norwegian sovereign wealth fund, the world’s largest sovereign wealth fund. "We should not expect future returns to be the same as those of the past six months," said Nicolai Tangen, CEO of Norwegian Bank Investment Management (NBIM), last month. NBIM manages Norway's $2.3 trillion oil fund, which posted record profits of nearly $185 billion in the first half of the year.