Rising international equity markets boosts super fund's performance

Tuesday 20th April 2010

The New Zealand Superannuation Fund made a 4.29% paper return, or $679 million on its $14.88 billion of investment funds last month.

Reflecting rising sharemarket prices for its investments in global equities, the fund has achieved a $3.02 billion net gain, or 22.27% for the 2009/2010 full year to date, which ends in June.

Large cap international equities make up just over 37% of the fund’s investments, international fixed income accounts for almost 16%, and timber is almost 7% of the value.

The fund’s rising return of the past year helps make up for the 2007/08 and 2008/09 years where the fund respectively made a 4.92% and 22.14% loss.

Since its inception, the fund has made an absolute return of 6.64%, and its excess relative to Treasury bills is 0.5%.

The fund’s substantial New Zealand share holdings include the Auckland International Airport at 10.11%, representing $256 million in value, and the New Zealand Refining Company at 13.34%.

The fund’s 8.14% shareholding in ConnectEast Group has a book value of almost $186 million.

Yesterday, the Super Fund ended the global equity, non-US small-cap equity, and multi-strategy equity mandates run by GMO LLC after the firm managed these portfolios through the latter half of the past decade. GMO Renewable Resources will keep managing the Fund’s local timber assets.

The so-called Cullen Fund’s performance June last year has bolstered the government’s books after it took advantage of the rebound in markets following the global financial crisis at the end of 2008.

Businesswire.co.nz

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