ASSET OWNERS

NZ Super reports 13.2% gain for 2016

The New Zealand Superannuation Fund Wednesday reported a 13.2% gain for 2016, lifting the value of its investment portfolio to a record high of NZ$32.7 billion ($23.9 billion).

The Auckland-based sovereign wealth fund's latest gain was roughly double its 6.5% return for 2015.

For the month of December, NZ Super posted a 2.44% gain, which followed a 1.79% return for November.

In a news release, Adrian Orr, NZ Super's chief executive, said the fund remains “weighted toward growth assets,” even as its investment team anticipates the performance of global equities – which exceeded “our long-run expectations” over the past year – is likely to revert to more normal levels.

As of Dec. 31, the portfolio had a 66% weighting to global equities, a 4% allocation to New Zealand equities and 5% in private equity.

Of the remaining quarter of the portfolio, 11% was in fixed income, 5% in timber, 3% in infrastructure, another 3% in “other private markets,” 2% in other public markets and 1% in rural farmland.

Those allocation figures don't account for the fund's “strategic tilting” program, which employs derivatives and futures to add exposures to asset segments as and when their valuations fall below the investment team's estimates of fair value, while lowering exposures to overvalued asset classes.

In an email, Catherine Etheredge, a spokeswoman for the fund, said NZ Super's strategic tilting program contributed 1.7 percentage points of the 13.2% gain for the year.