NZ Super Fund gains in February

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The New Zealand Superannuation Fund produced a 1.88 per cent return in February, lifting the overall value of the retirement nest egg by $296 million.

Created by the previous Labour-led government to help offset the burden of paying universal superannuation to a generation of retiring baby boomers, the Super Fund's value has now increased 17.24 per cent, or by $2.3 billion, so far in the 2009-10 financial year.

The total value of the fund stood at $15.94b as of February 28.

The Super Fund's long-term target is to exceed the rate of return on Treasury bills by 2.5 per cent over rolling 20-year periods.

It is down 0.16 per cent since its September 2003 inception. However, this has greatly improved since end of the June 2009 year, thanks to a post credit crunch global markets bounce back, when the Super Fund was 27.63 per cent behind Treasury bills.

Overall the Super Fund, which has received a total of $14.88b in government contributions including $250m this financial year, has produced annualised absolute returns since its inception of 6.04 per cent.

At 36.7 per cent, the Super Fund has the biggest percentage of its money invested in international large cap equities. Second, at 16.7 per cent, are international fixed income investments.

In last May's Budget the Government revealed plans to suspend payments to the Super Fund for at least a decade as it strives to reduce Crown debt.

- © Fairfax NZ News