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The Guardians of New Zealand Superannuation, the Crown entity that manages the NZ Super Fund, has published a white paper documenting the outcome of its 2020 review of the Fund’s Reference Portfolio.

The Reference Portfolio is the basis on which the majority of the Fund is invested, and represents the single biggest driver of Fund returns. It is designed to gain broad, low cost access to listed global investment markets, in order to maximise the Fund’s returns without undue risk to the Fund as a whole. It is also a benchmark for active investment.

The review reaffirmed the Reference Portfolio’s strong weighting towards growth assets, retaining an 80% allocation to growth assets (equities) and 20% to fixed income assets (bonds). An existing 5% allocation to listed New Zealand equities also remains unchanged. There has been a minor change to the structuring of the global equities exposure within the Reference Portfolio. Further details are contained in the paper.

The Guardians expects that over the long-term the Reference Portfolio will return 6.8%, 2.8% above the estimated risk free (Treasury Bill) interest rate, a proxy for the cost to the Government to contribute to the Fund.

The Reference Portfolio will next be reviewed in 2025.