NZ supermarket values ​​drop by $3.3 billion

New Zealand superannuation values ​​fell by nearly 7% as investments were hit by volatile financial markets, high inflation and rising interest rates.

The fund, which was set up 19 years ago to help pay future pension costs, fell $3.3 billion to $55.7 billion in the year ended June after a record rise last year. rice field.

Since its inception in 2003, the Superfund has returned approximately 9.7% annually.

NZ Superfund Chief Executive Matt Winneley said in a statement: “We are making no secret that market conditions have been tough, with the first half of 2022 having the worst global equity market performance since 1970. , the fund has demonstrated resilience and is performing well.” .

NZ Superfund Chief Executive Matt Winneley
Photo: Offer/NZ Super Fund

“It may sound counterintuitive to say it was a good year with declining fund values. , mitigated the overall impact.”

The fund’s passive portfolio, which comprises 60% of the total portfolio, fell by 14.2% over the year.

However, our active investments outperformed our passive fund benchmarks by 7.3%, adding a record $4.5 billion in value.

The Fund’s ‘strategic tilt’ approach, focused on buying when others want to sell and selling when others want to buy, will help determine the Fund’s value-added performance and the mandate of its timber and investment components. evaluated by the performance of

Looking ahead, Winelei said the days of unusually high returns, such as the fund’s 29% growth from 2020 to 2021, are past.

“Rising interest rates will weigh on market performance and raise the internal hurdles to making direct investments in companies.”

Financial markets are entering a “low profit period” and stakeholders should expect more ups and downs, he said.

In the first two months of the current fiscal year, the fund has collected $2 billion and is now at $57.3 billion.

The Superfund’s investments are allocated 63% to global equities, 16% to bonds, 4% to local equities, 5% to local land and timber, and a small portion to private equity, infrastructure and real estate.

Major investments in New Zealand include stakes in Kaingaroa Timberlands, Datacom, LabTests, Fidelity Life, and various investments in real estate, farmland and small and medium-sized growth companies.