Strong year for NZ Super Fund returns
Wednesday 23 Jan 2013 7:36 a.m.
Investment returns from the New Zealand Superannuation Fund, the country's main savings vehicle to fund public pension entitlements, came in at 19.17 percent last year, the fund's guardians report.
The monthly update shows the Fund finished the year at a record high value of $20.92 billion, up from $17.73 billion at the end of 2011, of which $3.49 billion is invested in a range of New Zealand assets including publicly listed shares, forests, farmland, commercial property and private companies.
Since its inception a decade ago, the Fund has achieved a 7.92 percent return on its investments, and contends that its active portfolio management policy has added $1.3 billion of the increased value, compared to returns if its funds were passively managed.
Unlike most other managed funds, the NZ Super Fund does not exclude tax payments from its calculation of returns, since tax paid is also regarded as a gain for the New Zealand government, which funds public pensions primarily from tax revenues and borrowing.
The long term performance so far means the fund has exceeded its own performance target of beating the interest rate return on 90 day Treasury Bills by at least 2.5 percent, with the current return standing at 2.84 percent above the bill rate.