NZ Super Fund posts 15% return in 2015, talks down future expectations
By Paul McBeth
Sept. 16 (BusinessDesk) - The New Zealand Superannuation Fund generated a return of almost 15 percent in the 2015 financial year, beating its benchmark, but warned the above-average performance won't go on forever.
The fund returned 14.6 percent after costs and before tax in the 12 months ended June 30, growing to $29.54 billion, the fund's manager, Guardians of New Zealand Superannuation, said in a statement. That beat its reference portfolio benchmark by 4.45 percent in the year, and was ahead of the 13.9 percent return a year earlier. Since the fund's inception in 2003, it has generated an annual return of about 10.1 percent, or $19.31 billion.
"Returns in the 10 percent to 20 percent range are at the higher end of our expectations and will not continue indefinitely," chairman Gavin Walker said. "Over the long term we expect the fund to earn, on average, 8 percent to 9 percent per annum."
In July, the fund's latest five-year review found the portfolio’s current mix of 80 percent equities and 20 percent fixed income assets remains appropriate given its long-term investment horizon. The fund was established to help pre-fund universal pension benefits largely for the baby boomer generation.
Guardians chief executive Adrian Orr said increased volatility in global markets would impact on the fund in the short-term, but it was able to manage that uncertainty "and will look to take advantage of market disruptions as they occur."
The fund's annual report will be published in October.