New Zealand’s net international investment deficit is almost 27% higher than Australia’s and nearly triple that of the U.S. Fitch Ratings and Standard & Poor’s stripped New Zealand of AAA ratings in the third quarter of 2011.
Moody’s is due to review the country’s rating next year, when it will use a new methodology that puts more weight on countries’ external positions, Bloomberg reported. The ratings agency affirmed its AAA rating on New Zealand last month.
This is a situation ENZL investors should monitor because once a country loses an AAA rating, it is not easy to reclaim. Just ask Australia and Canada. It took those countries 10 and 17 years, respectively, to reclaim AAA ratings after losing them in 1986 and 1992.
iShares MSCI New Zealand Capped ETF
