The New Zealand Superannuation Fund has had its worst month of the 2009/2010 year, falling in value by more than $300 million after months of solid gains.

The fund produced a return after fees and before tax of -1.97% in January, only the second negative month of the year from July 2009 and much bigger than the slight 0.22% drop in October.

A $319 million decline brought the size of the fund down from $15.964 billion to $15.647 billion.

The dip in January brought the return for the 2009/2010 year to date down to 15.08% and 13.51% ahead of the return from treasury bills. 

The fund is returning an annualised average of 5.80%.

It trails its long-term target of exceeding treasury bills by 2.5% per year by 0.43%.

The “cash, collateral and foreign exchange hedges” asset class has suffered the most in January, going from $50.8 million as at December 31 to -$267.9 on January 31.

The ‘Cullen Fund’, named after former Finance Minister Michael Cullen who created it, has about 7.1% invested in New Zealand equity.

The biggest local investment is in Auckland Airport, in which it holds a 10.11% stake ($239.6 million), representing 1.5% of the total fund value.

Other major local investments include Fletcher Building ($145.7 million), Telecom ($111 million) and Contact Energy ($103 million).

The National government has suspended contributions to the fund, which were $2 billion a year.