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Fund Invests in Commodity Futures

New Zealand Superannuation Fund Invests in Commodity Futures

Auckland (27 October 2005) - The New Zealand Superannuation Fund announced today that it has invested in a diversified mix of commodity futures.

The investment has been made by entering into swap agreements with two internationally regarded investment banks. These agreements provide for the returns from a basket of commodity futures, as represented by the Goldman Sachs Commodity Index (GSCI) to be paid to the Fund. The swap agreements do not initially require capital to be deployed. However, the Fund will fully collateralise the value of all exposure against a portfolio of New Zealand dollar money market securities. That money market portfolio is managed by ING NZ Limited.

The commodity swaps are with Morgan Stanley Capital Group Inc. and AIG Financial Products Corporation. The GSCI is derived from a production-weighted basket of commodity futures. It includes exposure to 24 individual commodities. These span the energy, industrial and precious metals, and agricultural sectors.

The Fund's March 2005 Strategic Asset Allocation Review identified commodity futures as a desirable long term portfolio diversifier. The Fund's exposure as at the end of September was 5%, which is in line with its planned allocation by June 2007.

The value of the New Zealand Superannuation Fund as at 30 September 2005 was $7.6 billion.

ENDS

About GSCI:
For further information on GSCI, visit www.gs.com/gsci

About ING:
ING currently manages two fixed interest mandates on behalf of the Fund. For further information on ING, visit www.ingnz.com

About the New Zealand Superannuation Fund:
The New Zealand Superannuation Fund, which commenced investing at the end of September 2003, is designed to partially provide for the future cost of New Zealand superannuation. An ageing population means the cost of providing New Zealand superannuation is expected to double over the next 50 years. To prepare for this, the Government plans to allocate on average $2.26 billion a year to the Fund over the next 20 years while the cost of superannuation is relatively low. In the meantime, the Fund will invest the money on a prudent but commercial basis.

As the cost of superannuation escalates, the Government will progressively draw on the Fund to help smooth the impact on its finances. As at 30 September 2005 the value of the Fund was $7.6 billion. The Fund is expected to grow to around $100 billion by 2020. www.nzsuperfund.co.nz

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