The world's best-performing sovereign wealth fund achieved an annual return of 14.2%, while warning that high returns in the US stock market are unlikely to be sustainable.

New Zealand's sovereign wealth fund topped the global charts with an annual return of 14.2%, but the management team also warned that the era of high returns in US stocks may be coming to an end.

Jo Townsend, CEO of Guardians of New Zealand Superannuation, which manages the fund, said on Wednesday, while releasing the fund's results, that the high returns enjoyed by stock market investors in recent years are likely to slow down. This statement echoes recent warnings from the management of Norway's sovereign wealth fund.

With an annual return of 14.2%, it ranks first among similar funds globally.

As of June 30, 2026, the New Zealand Superannuation Fund reached NZ$94 billion (approximately US$54.4 billion), with a year-on-year increase of NZ$9.3 billion and an annual return of 14.2%.

Earlier this year, the analysis firm Global SWF ranked it as the world's best-performing sovereign wealth fund.

However, Jo Townsend also pointed out that the fund's return this fiscal year was 0.1 percentage points lower than the benchmark index.

Warning for US stocks: Increasing pressure for mean reversion.

Despite her impressive performance, Jo Townsend's wording was quite cautious.

In her earnings statement, she said, "The returns of U.S. stocks over the past few years have been nearly double the annualized returns of the past 20 years, so we expect a mean reversion to occur at some point."

She also emphasized, "In the short term, concentrated holdings can yield strong returns; however, in the long term, we firmly believe that a more diversified portfolio is more in line with our mission."

The fund has had an average annual return of 9.68% over the past 20 years.

Lowering long-term return expectations and reducing active risk.

This warning has already been reflected in the fund's actual operations.

Earlier this year, the custodian announced it was lowering its long-term expected annual return for the fund from 7.8% to 7.2%. Jo Townsend said on Wednesday that this adjustment reflected management's assessment that equity returns would trend downwards. At the same time, the fund has also reduced its active risk budget.

The fund publishes its holdings data every six months. The latest data (as of the end of December last year) shows that its largest single holding is Nvidia, with a market value of approximately NZ$3 billion; Apple, Microsoft, Alphabet, and Amazon rank in the top five in that order.

Total holdings in US stocks reached NZ$31.7 billion.

In addition to equities, the fund also holds stakes in timber, real estate, the private market, and other alternative assets. Established in 2001, the fund aims to provide financial security for New Zealand's aging population's pension expenditures, with the first withdrawal expected in 2054.

Norway's sovereign wealth fund issued a joint warning

Jo Townsend's judgment is not an isolated case.

Nicolai Tangen, CEO of Norges Bank Investment Management (NBIM), Norway's sovereign wealth fund manager, told CNBC last month, "We shouldn't expect future returns to be the same as what we've seen in the past six months."

NBIM manages the $2.3 trillion Norwegian oil fund, which earned a record $185 billion in profits in the first half of this year.

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