New Zealand Superannuation Fund, in an annual report released Wednesday, reported a 19.36% return for the fiscal year ended June 30, even as fund executives warned future gains are likely to be less spectacular.
On an after-tax basis, the portfolio ended the year with NZ$25.82 billion (US$20.2 billion) in assets, up 14.6% from the year before.
The superannuation fund's latest returns lifted annualized gains for the five years ended June 30 to just more than 17%.
Returns for the coming years should be more “normal,” the annual report said.
“The easy value-add runs have been made post the global financial crisis,” wrote Adrian Orr, the Auckland-based fund's CEO, in the report.
Prices of most major asset classes have reached levels where there's “no point chasing additional risk if we're not going to be adequately rewarded,” Mr. Orr added.
Still, the report said that relatively bad times for markets can be good times for an investor such as New Zealand Superannuation, which is tasked with accumulating retirement savings ahead of an anticipated graying of the country's population.
“It's important to appreciate that periods of market weakness … are the very times where long-term investors such as ourselves can find the best opportunities,” wrote Gavin Walker, chair of the fund's board of trustees, in the report.