The worldwide hunt for yield saw foreign ownership of the New Zealand share market increase to 36.3 per cent - it highest point since 2011, investment specialists JBWere said.
The level of foreign ownership was 32.6 per cent last year, JBWere said in releasing results of its survey, which covered 70 companies accounting for 96 per cent of the S&P/NZX All index.
JBWere said foreign ownership in the New Zealand market remained relatively high compared with many of its developed-market peers.
"This doesn't altogether surprise us given the New Zealand market consists of a number of high-quality, stable companies that, in many cases, pay attractive dividend yields," it said.
JBWere, noting the recent rise in world bond yields, said the current high levels of foreign ownership may soon diminish if international bond yields continue to rise in the aftermath of Donald Trump's success at last month's US presidential election.
"As at the time of writing, New Zealand equities trade at a 23 per cent premium to global equities, with low interest rates a key driver. Any change here could see our premium eroded," JB Were said.
In October, for example, a 23 basis point rise in US 10-year Treasury yields saw the equity market weaken by 5.5 per cent, and during November an additional 56 basis point rise in US 10-year Treasury yields saw the New Zealand market weaken a further 1 per cent.
"Accordingly, further increases in bond yields will likely be a headwind for the New Zealand equity market," JB Were said.
At the same time, an obvious by-product of higher bond yields is a more attractive fixed income market, it said.