There is an upside to the proclivity for higher rates in Australia and New Zealand. ENZL has a trailing 12-month dividend yield of 3.45% while EWA’s 4.42%. The S&P 500’s dividend yield is not even 2%.
Another knock on New Zealand has been that the country is running a current account deficit, a scenario global investors are apt to monitor closely following prior repudiation of some emerging markets with vulnerability to external financing demands. [Mixed Bag on Account Surplus Trade]
However, buoyed by robust demand for agriculture commodities exports, New Zealand’s current account deficit is heading in the right direction.
“Deutsche Bank estimates that on the back of this data the annual current account deficit will sit at just 2.9% of gross domestic product in the first quarter, down from 3.4% in the fourth quarter of 2013 and below an average of over 5% between 1980 and 2009,” reports Lucy Craymer for the Wall Street Journal.
iShares MSCI New Zealand Capped ETF
