New Zealand Superannuation Fund Announces Investment Performance for the Year Ended 30 June 2005
POSTED ON: 2 August 2005
Auckland (2 August 2005) - The New Zealand Superannuation Fund today announced its investment returns for the year ended 30 June 2005.
In the 12 months to 30 June 2005 the assets of the Fund grew from $3,985.4 million to $6,613.5 million. The growth consisted of $2,107 in Government contributions and $726.1 million in investment income (after costs, but before tax).
The Fund’s primary investment target is to exceed, before tax, the risk-free rate of return (measured as the yield on 90-day Treasury bills) by an average of at least 2.5% p.a. over rolling 20-year periods.
The Fund’s rate of return for the 12 months to 30 June 2005 was 14.13% (after costs, but before tax). This was ahead of both the risk-free rate of return of 6.33%, and the risk-free rate of return plus 2.5%.
The 2004/5 year generated a higher rate of return than the previous year. In 2003/4, the return for the first nine months of the Fund’s investment programme was 7.69% (equivalent to 10.4% for the full year). This means that since 30 September 2003, the Fund’s return has averaged 12.5%, against the risk-free rate of 5.88%.
Chairman of the Guardians of New Zealand Superannuation, David May, said: “I am very pleased to be able to report such strong returns in our first full fiscal year. These returns were driven by both strong equity markets and good overall performance by the Fund’s active managers. The Fund was also protected by its policy to hedge a large proportion of its overseas investments back to the New Zealand Dollar.
“Because markets can go down as well as up, too much should not be read into the strong results achieved in the first two years. The success of the investment strategy will be fully judged over the next 20 to 30 years. Nevertheless the Board is confident that a sound framework has been established and is very encouraged by the performance achieved to date.”
For more information please contact:
Paul Costello, CEO, New Zealand Superannuation Fund, 09 300 6980 Sarah Loutit, Media Relations, New Zealand Superannuation Fund, 021 500 134