New Zealand Superannuation Fund, Auckland, returned 13.89% in 2014, exceeding its benchmark by 147 basis points and bringing the value of its portfolio to NZ$27.54 billion (US$20.53 billion), the fund reported Wednesday.
For the three and five years ended Dec. 31, the fund returned an annualized 19.6% and 14.8%, respectively.
In a news release, CEO Adrian Orr attributed the fund's strong one-year performance to its high global equity allocation and decline in the New Zealand dollar.
However, Mr. Orr predicts more “muted” returns of 8% to 9% on average in 2015 and beyond.
“Many asset classes are nearing full value, economic growth remains patchy globally, and it is becoming harder to find good investment opportunities,” Mr. Orr said in the news release. “While we are confident the fund will exceed its benchmarks over time, the very high returns of the last few years are unlikely to be repeated — they are the exception, not the rule.”
The fund continues to have a strong weighting to growth assets despite taking measures to reduce its overall level of risks in recent months, the release said.