NZ Super Fund rides billion dollar wave in September

Tuesday 19th October 2010 1 Comment

The New Zealand Superannuation Fund, commonly known as the Cullen Fund for its architect, posted a billion dollar paper-gain last month as a surge in global stocks underpinned its performance.

The fund, set up by the previous administration to partially pay for an ageing population’s pension bill, made a 6.1% gain in September as its global equities portfolio grew 6.4% to $10.97 billion.

The gain came in a month where Wall Street’s Dow Jones Industrial Average climbed 7.7% as investors went looking for higher yields. The value of the fund rose just shy of a billion dollars in the month to $17.21 billion, and has grown 9.6% in the financial year-to-date.

The Cullen Fund aims to beat returns from 90-day Treasury bills by more than 2.5 percentage points, and is short of this benchmark by 171 basis points. It’s returned 6.68% since its inception in 2003.

Earlier this month, chief executive Adrian Orr defended the fund’s performance in its annual report, saying that although returns missed their target, it stacks up well against global peers.

Its biggest local holding is still Auckland International Airport at 1.5% of the fund’s value, followed by Fletcher Building and Contact Energy at 0.7% and 0.5% respectively. The value of its investment in Telecom fell to $84 million from $95.9 million in a month where the phone company’s stock fell 4 cents.

Australian toll road company Transurban Holdings was still the largest international stock in the fund at 1.6% of its value, followed by ConnectEast Group, which runs Melbourne’s EastLink motorway, at 1.2%. Hong Kong property developer Sun Hung Kai Properties and Copenhagen Airport were new additions to the fund’s top 10 global stocks, each making up 0.2%.

Businesswire.co.nz

Comments from our readers

On 20 October 2010 at 2:04 pm Gunner said:

Brilliant! Congratulations to Mr Orr and his team. A superb result in trying times.