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Super Fund branches out into property

Thursday 17th February 2005

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The Board of the Guardians of New Zealand Superannuation has announced that Vanguard Investments Australia Ltd has been appointed to manage a global listed property securities mandate.

With an initial allocation of NZ$100 million, the appointment of Vanguard Investments Australia Ltd represents the Fund's first commitment to property.

Vanguard Investments Australia Ltd, a wholly owned subsidiary of the Vanguard Group Inc, will manage the mandate on a passive basis, with the UBS Global Real Estate Investors Index (in New Zealand dollars) as the chosen benchmark. The Index represents approximately 200 companies whose revenue is predominantly driven by property rental income, and provides broad diversification by region and sector.

New Zealand Superannuation Fund chief executive Paul Costello said: "Property is an important part of our long-term investment strategy, and today's announcement is the first step in building the Fund's portfolio. Looking ahead, we will turn our attention to unlisted property, both within New Zealand and overseas, and to further considering the role of active management in the listed market."

This is the second mandate awarded to Vanguard Investments Australia Ltd. In November 2003 the firm was appointed to manage an international government bond mandate.

Commenting on the appointment, Vanguard's chief investment officer Eric Smith said: "We are delighted to have been chosen to manage additional assets for the New Zealand Superannuation Fund. Global property securities are a rapidly evolving asset class attracting a lot of attention from investors in the region. We appreciate the Fund's recognition of our experience, knowledge and exceptional level of ongoing service in awarding us this mandate, and look forward to the continued development of our relationship."

The appointment of Vanguard Investments Australia Ltd brings the total number of external investment managers to 19. The value of the New Zealand Superannuation Fund as at 31 January 2005 was $5.5 billion.

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