NZ Super Fund hits milestone

Last updated 16:32 17/10/2012

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The New Zealand Superannuation Fund has reached $20 billion.

Set up by the Government in 2003 to help pay for the increasing cost of universal superannuation, the fund hit an end-of-month record high of $20.08b in September.

The Government has contributed $14.88b to the fund to date, with the National government freezing contributions in 2009.

It will start paying out money to help fund super payments from around 2029/2030.

Since inception, the fund has produced a return of 7.57 per cent a year, 2.41 per cent or $2.7b ahead of the Treasury Bill rate.

Over the same period, the fund has returned $2.32b to the Crown in tax.

"The fund has benefited by sticking to its long-term growth strategy and investment beliefs during volatile times," chief executive officer Adrian Orr said.

"Our weighting to growth assets leads to ups and downs in short-term performance. The crucial factor is how the fund performs over the long term - in our case 20-plus years."

The fund has released its annual report for the year to June, flagging a number of new investments including a US$100 million ($122 million) investment in a Chinese infrastructure fund, the purchase of a one-third share in Christchurch-headquartered Scales Corporation, and additions to its portfolio of local dairy farms, now worth $110m.

The report also discusses the progress made in implementing a 2009 direction from the Minister of Finance to identify and consider opportunities to increase its allocation in New Zealand assets.

Over the last three years, the proportion of the fund that is invested in New Zealand has increased 1.6 per cent and the value of its New Zealand investments has grown by $1b.

As well as its dairy farm portfolio and stake in Scales Corporation, the fund's New Zealand investments include more than $1b invested in the local sharemarket, a 40 per cent share in Kaingaroa Forest and a 50 per cent share in Z Energy.

The fund's full September performance report will be released later in the month.

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