NZ Super Fund turns 20
POSTED ON: 24 November 2023
Twenty years after the Guardians of New Zealand Superannuation made its first investments on behalf of the NZ Super Fund, the Super Fund is in excellent shape and well placed to carry out the job it was set up to do, says Guardians CEO Matt Whineray.
Mr Whineray said that the twentieth anniversary of the Super Fund’s first investments was a significant milestone.
“As a long-term, growth-focused investor, many of our targets and performance expectations are based on 20-year rolling averages, so we’ve always looked forward to being able to report against that yardstick,” Mr Whineray said.
Since its inception in 2003, the Super Fund has returned 9.5% per year (after costs and before NZ tax). Net Government contributions of approximately $15.7 billion during that time have been used to create an investment portfolio currently worth some $64.4 billion.
“One of our benchmarks is the return on 90-day Treasury Bills, which represents the cost to the Government of contributing capital to the Super Fund, instead of using that money to repay debt,” said Mr Whineray.
“Since 2003, Actual Fund returns have outperformed the Treasury Bill benchmark by an annual average of 6.11% - in dollar terms, Aotearoa is more than $40 billion better off as a result of the Fund.”
Mr Whineray said the Super Fund’s job, to help future governments meet the forecast cost of national superannuation, is as important as it ever was.
“Our job remains exactly how it was described by then-Finance Minister Sir Michael Cullen when the Super Fund was established: to ‘smooth over time and between generations the future increase in the cost of superannuation.’”
Mr Whineray said the Fund was well placed to fill that role.
“The Super Fund has become a globally-respected, high-performing sovereign wealth fund that has already made a strong contribution to the nation’s wealth and the Guardians remains determined to achieve our purpose, sustainable investment delivering strong returns for all New Zealanders.”