Salt Reduces Exposure to NZ Equities Amid Underperformance

The Salt Sustainable Growth Fund (Salt Funds Management) is underweight in New Zealand equities, and the Salt Sustainable Income Fund has also reduced its exposure to NZ shares as the local market continues to lag behind major global equity markets.

In its latest Global Outlook commentary, Salt noted a 3.2% loss for the NZ equity market in the June quarter, wiping out the 2.8% gain from the March quarter. Salt attributed this to the tight monetary policy of the Reserve Bank of New Zealand (RBNZ) and worsening domestic sentiment.

Salt expects the RBNZ to cut its official cash rate, currently at 5.5%, in November, potentially leading investors to allocate more to NZ shares. However, due to the outperformance of international shares, local asset allocation remains challenging.

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