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Sovereign Wealth Funds

NZ Super reports 19.8% gain for calendar 2017

The New Zealand Superannuation Fund on Thursday reported a 19.8% investment gain for the 2017 calendar year.

That gain, together with the government's first contribution to the fund since 2009 — a NZ$70 million injection in December — lifted the value of New Zealand Super's portfolio to a record NZ$37.9 billion ($26.9 billion) as of Dec. 31.

Catherine Savage, the chair of the guardians of New Zealand Super, said in a news release that the fund — focused on long-term investing — remains heavily weighted toward growth assets, and she is confident "we can ride out and profit from any future market downturn."

The fund's year-end allocations remained unchanged from the year before, with 66% of the portfolio in global equities, 11% in fixed income, 5% each in private equity and timber, 4% in New Zealand equities, 3% each in "other" private markets and infrastructure, 2% in "other" public markets and 1% in rural farmland.

An Auckland-based spokeswoman for the fund couldn't immediately provide details on the fund's strategic tilting program, which uses derivatives and futures to short public equity exposures when New Zealand Super's investment team judges valuations to be expensive, or boost exposures when valuations fall below the team's estimates of fair value.

The fund's asset allocation figures don't take account of those strategic tilting positions.

In October, the fund reported a 20.71% gain for its latest fiscal year ended June 30, 2017.