NZ Super Fund sees strong recent returns

The New Zealand’s Superannuation Fund has experienced a strong start to its financial year with a 6.3% rise in July, followed by a 2.8% return in August.

While managed funds are a long-term investment, last year was not a strong one for the fudn, dropping from $14.3 billion in July 2008 to $13.3 billion the following year.

But that drop has now been wiped out by gains in the first few months of the 2010 financial year, with $845 million coming into the fund in July, followed by another $421 million in August.

September is keeping up that trend, with an unaudited return of 3.07% in the first 17 days of the month, bringing the fund to $15.3 billion.

This represents an unaudited return of 33.34% or $3.6 billion since the market trough in early March, when the fund sat at just $11.5 billion.

The fund aims to exceed, before tax, the interest rate on New Zealand treasury bills by at least 2.5% per annum over rolling 20-year periods.

The fund was started in September 2003 with $2.4 billion in cash, with the Government contributing $14.88 billion since then, while $1.36 billion has been returned in tax.

By the end of August, the fund had total assets of $14.9 billion, including more than $5 billion in international equities, $2.3 billion in international fixed income and just over $1 billion in New Zealand equity.

As part of this year’s budget announcements, Finance Minister Bill English axed contributions to the New Zealand Superannuation Fund until the books head back into surplus, ten years away in 2020.

He also issued a directive to invest 40% of its worth in New Zealand, although this was framed as an expectation rather than an attempt to enforce such a limit. 

This article is tagged with the following keywords. Find out more about My Tags

1 Comment & Question

Commenter icon key: Subscriber Verified

The previous government eventually alienated a large part of the electorate with its idiotic social poliices. However, it did try to address the coming superannuation crisis - something which this National-led government is ignoring. To quote Thatcher they "stagger from expediency to expediency". How about some sensible, bi-partisan long-term planning on the superannuation issue? Don't the voters deserve this?

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7876 0.0000 0.00%
AUD 0.9228 -0.0001 -0.01%
EUR 0.6299 0.0001 0.02%
GBP 0.4989 0.0001 0.02%
HKD 6.1056 0.0326 0.54%
JPY 92.6460 -0.0010 -0.00%

Commods

Commodity Price Change Time
Gold Index 1196.6 -0.500 2014-11-26T00:
Oil Brent 80.1 -0.140 2014-11-25T00:
Oil Nymex 73.7 -0.400 2014-11-26T00:
Silver Index 16.6 0.000 2014-11-26T00:

Indices

Symbol Open High Last %
NZX 50 5457.4 5462.1 5457.4 -0.08%
NASDAQ 4760.2 4788.0 4758.3 0.61%
DAX 9894.6 9942.7 9861.2 0.55%
DJI 17812.2 17833.8 17814.9 0.07%
FTSE 6731.1 6765.0 6731.1 -0.03%
HKSE 23833.2 24176.6 23843.9 1.12%
NI225 17348.0 17432.6 17407.6 -0.14%