Returns for the NZ Super Fund - the government savings vehicle managing $40 billion of tax payer money - have followed global markets back down to earth with a thud.
According to the fund's December Investment Environment Report it has returned 3.5 per over the past 12 months - a big shift from the double-digit returns it has managed during the bull market of the past several years.
The fund has also shifted to a more defensive stance - with more liquid assets than usual - to cope with the slump ... or what it describes as the "late stage of the economic cycle".
More market falls in the past week have Wall Street indexes on track to end the year in the red.
Chinese markets are down by more than 20 per cent and the local NZX-50 is up just three per cent for the year.
The fund has averaged an almost 11 per cent return per year over the past three years. Last year it returned 12.4 per cent and in 2016 it returned more than 20 per cent.
The fund's returns were negative in October when global markets took big fall.
International equity markets are now lower than they were at the start of the year, said Mike Frith, NZ Super Fund manager, Economics.
What we were seeing was typical late-cycle behaviour, he said.
On top of that there was added pressure from trade tension between the US and China, political uncertainty in the UK and Europe and weakness in emerging markets - including China.
"You don't have to be a rocket scientist, or even an NZ Super Fund economist, to recognise why there has been severe market turmoil," he said.
The NZ Super Fund is mandated to take a long-term view on its investment so is weighted towards growth assets - which tend to rise more during bull markets but can also fall more sharply during corrections.
It looks out to at least 2035 (the earliest a government will begin to withdraw money to help pay for New Zealand Superannuation) and beyond.
"We're a long-term investor and our endowments allow us to ride through a rough period like we've just experienced," Frith said.
At the moment the fund had a higher proportion of liquid assets to illiquid assets
than it would have on average over the cycle, he said.
In other words it has taken a more defensive stance, shifting towards more liquid assets such as cash and 90 Day Bank Bills.
"If we are in the late stages of the economic cycle and prices are high and downside risks prevail then this is a good place to be."
It meant the fund could stand major liquidity demands if markets fall further.
"We're not saying this will happen," Frith said, "but it means we'll be positioned for it all the same."
It also meant the fund was well positioned to buy more assets as they got cheaper, he said.