New Zealand Superannuation Fund booked an $845.2 million loss – just below 5% of its total value -- in the last month, as global equities took a hit amidst international economic turbulence.
Despite the negative 4.8% return for the month, year-to-date returns – after fees and before taxes were paid -- were 17.6 %.
The fund now has $15.86 billion invested and has produced an annual return of 5.81 % since inception in September 2003.
The New Zealand Superfund was set up to pre-fund the future cost of New Zealand superannuation by investing government contributions and returns on the contributions for the long term.
Automatic contributions to the fund are currently suspended to avoid any further increase in Government debt.
Today’s portfolio update from NZ Super Fund reveals $1,048.7 billion or 6.6% of the fund is invested in New Zealand equity; $5,900 or 37% is invested in international, large capitalised equities; 7.5% is invested in infrastructure and 7.1% in timber.
The fund’s largest stock remained Auckland International Airport 1.6% of the fund’s value followed by Fletcher Building at 1%.
The May loss was the first negative monthly return for the fund since January, at negative 1.97%, and compares to a 6.8% fall in the value of the NZX 50 index in May.
He also suggested that New Zealanders were "ready for some level of compulsion" for retirement savings, as long as it was phased in.
NZ Superfund’s result was released as NZX chairman Andrew Harmos told the NZX annual meeting in Wellington that New Zealanders were "ready for some compulsion" in their savings.
The absence of such compulsion was a little difficult to understand, he said.
"I don't need to tell this audience that this is one of the big reasons why there is a wealth and income gap -- and frankly a financial literacy and investment sophistication gap -- between us and Australia," said Mr Harmos.
"In my judgment New Zealanders are ready for some compulsion here, albeit at a more modest level than the Australian (compulsory superannuation) 9 percent and rising. A modest starting level with a steady path of well-signalled increases would be a strong start."
Thu, 17 Jun 2010