Salt goes lighter on NZ equities in both growth and income funds

In its latest Global Outlook commentary, Salt notes that the NZ equity market posted a 3.2% loss for the June quarter, “erasing its rather anaemic 2.8% March quarter gain and thereby moving into slightly negative returns on both a 2024 year-to-date and one-year basis.”

Salt says that was the outcome it had expected, given the very tight monetary policy the Reserve Bank has maintained.and ever-worsening domestic sentiment.

“There is simply no real catalyst at present for a recovery in performance by the NZ equity market, and the best approach at home is probably to be incrementally accumulating quality cyclicals, ahead of the inevitable point when the RBNZ eases policy and investors begin to pre-position for a 'green shoots' recovery dynamic which should be visible by mid-2025.”

Salt expects the RBNZ will first cut its official cash rate, currently at 5.5%, in November and a growing number of economists agree.