Rocky ride for NZ Super Fund

AUCKLAND: The New Zealand Superannuation Fund’s annual return has been battered amid market volatility and the economic impact of the pandemic.

It has had a 1.73% return on its investments in the year ended June to stand at $44.8 billion (after fees but before tax).

The fund took its biggest monthly hits in February and March at the height of market volatility, when it had its secondbiggest monthly fall of 12.3% since being set up.

The annual return was also well below its benchmark reference portfolio, which returned 3.82%.

The fund’s average annual return since it was set up in

2003 has been 9.63%, although it was adversely affected by the Global Financial Crisis of a decade ago, and growth was also constrained when the then Nationalled government suspended contributions as it sought to cut its deficits in the wake of the Canterbury earthquakes.

NZ Superannuation Fund chief executive Matt Whineray said it had always been vulnerable to wild swings in sharemarkets, because its investments were weighted towards shares.

‘‘Yet we also expect the fund to earn back these losses — and then some — in subsequent years as markets recover.’’

The fund had sought to take advantage of trading opportunities as the markets gyrated, he said.

‘‘The fund added significantly to its equity and credit positions as markets fell, and has progressively reduced those positions as markets have recovered.’’

The outlook remained difficult given low interest rates and weak economies, Mr Whineray said. — RNZ