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Sharp swings in equity markets around the globe offers buying opportunities, chief executive of the New Zealand Superannuation Fund Adrian Orr says.
For long-term investors, such as the super fund, it is a chance to pick up assets at a lower price, Mr Orr says.
The NZ Super Fund, set up to help pay pensions decades into the future, had a return on investment of 6.5% in 2015 and is now valued at just under $30 billion.
"Volatile markets provide opportunities for us. We respond to market fluctuations by adding more assets as they become cheaper, and selling those that are becoming more expensive," Mr Orr says. "We remain focused on achieving the best outcomes over the long term."
The fund has returned an average of 9.6% since being established in 2003. It has benefited from surging equity markets in the past three years, showing returns of 15.2% a year, however the fund's managers have warned that such performances will now be the exception, rather than the rule.
In December 2015, the 2016 budget policy statement revealed government contributions to the fund were projected to resume in 2022/23, two years later than previously indicated.
Contributions were suspended in 2009. The government is expected to start withdrawing money from the fund in about 2031/32 to begin to help pay superannuation. The size of the fund is expected to peak in the 2080s.
(BusinessDesk)
Edwin Mitson
Wed, 27 Jan 2016
Wed, 27 Jan 2016
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NZ Super Fund boss Orr sees buying opportunities in volatility
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