Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Community Legacy Outperforms International Market

15 August 2006

‘Community Legacy’ Outperforms International Market

The first full year of New Plymouth District Council’s Perpetual Investment Fund (PIF) has finished successfully, with it outperforming the international investment market.

In the 12 months to the end of June this year, the PIF earned $43.3 million – a 16.5 per cent net growth.

“This is an extraordinarily good result,” says John Armstrong, chairman of Taranaki Investment Management Ltd (TIML).

“It’s been a big year for us: Getting the systems in place and getting the investments made so that the fund is appropriately diversified.

“We aim to match or better the markets we invest in. We’re trying to out-perform the market all the time, and when you compare the result to the different indices that we follow – such as the NZX, the Australian ASX and United States’ S&P500 – we’ve out-performed them all.”

The fund was set up on 14 December 2004 following the sale of the council’s shareholding in Powerco. Its initial $259.4m value comprised 37.5 per cent of Sparcs (high yield securities) and 62.5 per cent in cash or short-term deposits.

At the end of June 2006, the PIF had diversified to 28 per cent in Sparcs, 16.8 per cent in Australian equities, 15.3 per cent in US equities, 10.1 per cent in New Zealand equities, 12.4 per cent in other equities, 9.6 per cent in cash or short-term deposits and 7.8 per cent in fixed interest. Its total value at the end of June was $286.2m (after meeting its release payment obligations).

Mr Armstrong says TIML is getting closer to completing the fund’s desired diversification.

“Our aim is to have 80 per cent of the fund in growth assets – such as equities and property. At the end of June, 55 per cent of the fund was in growth assets, and we’ll further diversify as those opportunities arise.”
More…

TIML takes a conservative approach to investments as it wants the PIF to be a long-term legacy for the community of New Plymouth District, says Mr Armstrong.

“In any investment fund you have good years and bad years, so it’s great to get the money in the bank and store up a bit of fat because there will be a bad year. It’s very pleasing to get the first year away and get some reserve going.

“The fund has grown to $286.2m which, accounting for inflation and release payments to the council, means that we are 4.8 per cent better off in real terms than 12 months ago.

“For the next three years we’ll pay out $21.5m per year to the council, and focus on sustaining and building the fund so that our great-grandkids can benefit from it.”

The cost of managing the fund has met the agreed price of a quarter of a percent of the fund’s value.

New Plymouth District Council has a AAA credit rating from Standard & Poor’s.

- TIML is governed by an independent board consisting of four directors. It is authorised to make all investment decisions relating to the fund, and it reports to the council’s Investment Subcommittee on a regular basis (at least quarterly).

ENDS.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Media Mega Merger: StuffMe Hearing Argues Over Moveable Feast

New Zealand's two largest news publishers are appealing against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Elsewhere:


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>

ALSO:


Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>

ALSO:

Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>