Pleasing 12.43% result for super fund
AUCKLAND: The New Zealand Superannuation Fund delivered a betterthanexpected return in the year to June and is looking to take advantage of investment opportunities against a backdrop of rising global geopolitical and financial volatility.
‘‘Equities have done well this year, around the world and in New Zealand as well. That adds up to better performance than you would expect,’’ chief executive Matt Whineray said.
‘‘If markets perform and we can add value, that’s obviously the best outcome for us and that’s what has happened this year,’’ he said.
The NZ Super Fund — set up to help fund national superannuation payments — returned 12.43% in the year to June 30, beating its passive Reference Portfolio market benchmark by 2.02 percentage points and exceeding the average return on Treasury Bills by 10.71 percentage points.
It ended the year at $39.37 billion, up $4 billion and has returned 10.4% since its inception.
Mr Whineray noted, however, the world was changing: ‘‘We saw the Fed raise [interest rates] yesterday, global growth is starting to slow down a bit, inflation is starting to come up. That makes everybody a little bit more anxious.’’
Against that backdrop, the fund is maintaining higher than normal levels of liquidity in the portfolio — assets that can be sold easily to meet its obligations or to fund new investments.
‘‘We want to make sure we are ready to deal with volatility so we can weather it and take advantage of it,’’ he said.
‘‘If markets fall we will add risk in those markets; if they rise we will sell them, or underweight or short them.’’
Mr Whineray said the Super Fund was very keen to develop the multibilliondollar light rail project in Auckland. The Super Fund teamed up with huge Canadian institutional investor CDPQ and had submitted a proposal to NZTA. The Super Fund has had discussions with the Government on KiwiBuild — a government plan to build 100,000 affordable homes over the next decade.
This year government contributions to the NZ Super Fund resumed after an eightyear suspension, with the Government contributing $500 million over the year. Since its inception in 2003, the Government has contributed $15.4 billion to the fund and the fund has paid $6.4 billion in New Zealand tax. — BusinessDesk