Kiwi market ranked fourth over 120 years

The Credit Suisse Global Investment Returns Yearbook ranks Australia as top of the pack, ahead of the United States, South Africa and New Zealand.

The Kiwi market had returned 6.4% a year since 1900, compared to Australia’s 6.8%.

Between 2000 and 2019, New Zealand equities returned 7.9% a year, and bonds 5%.

Between 1970 and 2019, it was 5.8% a year for equities and 3.2% for bonds.

Andrew McAuley, chief investment officer for Australia at Credit Suisse Australia Private Banking, said the New Zealand market had produced “excellent” returns.

“The Wall Street Journal ranks New Zealand as the best place in the world for business freedom. Its market is concentrated in health care, dairy products and infrastructure.”

He said, over the long term, it was striking how consistent the real return in equities had been, regardless of the starting decade.

Over the last 120 years, global equities have had an annualised real rate of return of 5.2% compared to 2% for bonds.

Over the past ten years, that increased to 7.6% for global equities and 3.6% for bonds.

Since 1900, global equities have outperformed bills by 4.3% per annum. The terminal wealth from investing in stocks would have been 165 times larger than from bills.