$15b fund's happy anniversary

Last updated 05:00 30/10/2009

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Solid investment gains for September made for a happy sixth anniversary for the New Zealand Superannuation Fund, which has grown to $15.23 billion since its inception.

Created in September 2003 to help pre-fund the future cost of superannuation, the fund endured a torrid time in the financial year to June, reporting a pre-tax loss of $3.2b after a 22.1 per cent drop in returns.

But the fund has since returned to winning ways and followed its strong start to the new financial year with a solid September, during which its coffers swelled by a further $348 million before tax.

In the year to date New Zealand's retirement nest egg has returned an absolute 11.98 per cent, or $1.64b; the fund's $15.23b paper value is the highest monthly or annual figure since its launch by the Labour government.

Over its six-year lifespan, the fund has received after-tax contributions from the Crown totalling $13.52b, while its managers have added a positive $1.71b through investment returns.

Its return to form comes as the fund considers heavier investment in rural land, state-owned enterprises and large infrastructure projects, while resisting a Government directive to plough 40 per cent of its funds into New Zealand.

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- BusinessDay

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