The New Zealand stock market has been one of the world's best performers this year despite growing trade war tensions, says Pie Funds chief investment officer Mark Devcich.
Since the trade war started early last year, Chinese stock markets have fallen close to 14 per cent, Devcich said.
The US market has risen more than 5 per cent but has been hit by regular sell-offs related to trade war news.
"The markets obviously think the trade war is a lot worse for China than it is for the US," he said.
US President Donald Trump wants to propel markets higher and has been using tweets to move sentiment about possible resolutions.
Meanwhile, though, New Zealand's NZX has risen 21 per cent.
"It has probably been one of the best performers globally in that time, it's really escaped the impact of the trade wars," Devcich said. "Maybe people see New Zealand as a bit of a safe haven."
The NZX had a lot of domestically focused companies with no exposure to trade tensions. It also had a lot of defensive type utility companies and that combination may have attracted investors down here, he said.
"Where we have seen it is in the currencies," Devcich said. "The New Zealand dollar has fallen against the US in the past 12 months. That's been the main impact."
Commodity prices have also been doing okay, although risks remained from falling Chinese consumer confidence.
Stepping back a bit to look at the cause of the tensions, Devcich highlighted Trump's concerns about the US trade deficit with China.
"In 2018 alone there was a $420 billion trade deficit between the two countries.
"What Donald Trump can see is that if the growth continues at current rates, then China will be the biggest economy in the world."
Despite many economists considering it to be a counter-productive trade tactic, Trump has a 25 per cent tariff on US$200 billion dollars worth of Chinese imports.
He has also threatened to impose them on all imports if the dispute is not resolved.
As well, he has imposed a ban on US companies selling technology to Chinese phone company Huawei.
This could create a technology cold war, Devcich said.
China has introduced its own tariffs, although it has less firepower because of the trade deficit.
There had been a slowdown in both economies but more particularly in China, Devcich said.
Chinese consumer confidence had taken a hit and growth in retail sales had fallen.
"We've seen 10 consecutive months of retail automobile declines in China."
Factory orders in the US had also declined.
The biggest risk in the US was rising inflation as the costs of tariffs get passed through to US consumers.
Trump continues to say that Chinese companies pay the Tariffs - they don't.
While tariffs hurt Chinese companies by making their products less competitive, it is the importer who pays the tariffs and the costs get passed on to the US consumer, Devcich said.
This risk for markets is that rising inflation will force the US Federal Reserve to lift interest rates - which would cause stock markets to fall.
"The number one concern for markets now was the resolution of the trade war," he said. "It was getting close a couple of months ago but now it is looking at least six to 12 months away."