NEW ZEALAND - The Government Superannuation Fund (GSF) in New Zealand saw its deficit jump 123% in the year ended June 30, the scheme said today.
The post-tax deficit was NZ$583.3m this year, up form NZ$260.9m.
Total returns for the 12-month period were -16.8%, more down from the -6.7% reported in the 12 months ended June 30, 2008.
The NZ$2.8bn GSF blamed the heavy losses on the global financial crisis and its exposure to growth asset classes, such as equities and real estate.
"Notwithstanding its recent diversification into global private equity, absolute return strategies, commodities and global tactical asset allocation, the fund was severely impacted by the downturn because of its widespread effect on markets," said GSF chairman Tim McGuinness.
"The Board is confident that the investment strategy remains appropriate. Although recent events have little precedent, the fund must maintain a significant exposure to growth assets in order to meet long term investment targets and this requires acceptance of periodic shocks to some degree."
Approximately half of the pension fund's assets are invested in global equities, in addition to a 10% allocation to New Zealand stocks.
More than 20% of the portfolio is allocated to fixed income, with the balance invested in alternative asset classes, such as collateralised commodity futures.
The highest performing asset class for the 12 months ending in June 2009 was fixed income, posting a return of 10.2%.
The worst performing section of the portfolio was commodity futures, which posted a return of -50.9%, although this followed a positive return of 73.8% during the preceding 12-month period.
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