The New Zealand Superannuation Fund posted its second monthly negative return in a row in June due to declines in equity markets, but still managed double-digit growth for the year to date.The fund, in which the Government has suspended automatic contribu
The New Zealand Superannuation Fund posted its second monthly negative return in a row in June due to declines in equity markets, but still managed double-digit growth for the year to date.
The fund, in which the Government has suspended automatic contributions to avoid further increasing debt, made a return of negative 1.54 percent last month, compared with negative 4.82 percent in May.
For the 12 months ended June 30, the fund returned 15.45 percent, compared with a return of 17.26 percent return for the 11 months to May.
The absolute returns were after fees but before tax, which the fund regards as a return to the crown.
While the fund's monthly decline was due to declining sharemarkets, it has benefited longer term from equities' recovery since the global financial crisis, guardians of the super fund said.
Since its inception on September 30, 2003, the super fund has produced an annual return of 5.49 percent.
The fund size has declined to $15.63 billion, from $15.86b in May.
The fund -- set up to contribute to future superannuation costs -- peaked in value at $16.7b in April 2010. It has turned around last year's losses, when it posted an annual return of negative 22.1 percent.
Fund guardians warn that short-term fluctuations have limited relevance, as the growth-oriented fund has a long-term investment horizon and a large exposure -- 51 percent -- to local and global equities.
Just over 6 percent of the fund is invested in New Zealand equities and 35.3 percent in international large capitalised equities. Other investments include 16.7 percent in international fixed income, 7.8 percent in timber and 7.4 percent in infrastructure.
The fund's New Zealand cash and fixed income holdings more than doubled to $2.1b in the 12 months to June 30, showing a significant increase in cash returns from investments.
