The specter of a rate hike comes as New Zealand is dealing with a widening current account deficit, one that nearly prompted Moody’s Investors Service to strip the country of its AAA rating. Moody’s is the only major ratings agency with an AAA rating on New Zealand. The Moody’s news broke in late October and since Nov. 1, ENZL is off 4.5%. [AAA Near Miss for New Zealand ETF]

ENZL also allocates about 32% of its combined weight to the export driven materials and industrial sectors, confirming the potential vulnerability of the fund if a rate hike sparks the kiwi higher. Some ENZL holdings have already decried the kiwi’s strength in recent months. [New Zealand ETF’s Largest Holding Complains About Kiwi]

iShares MSCI New Zealand Capped ETF