NEW ZEALAND - The New Zealand Super Fund returned 15.45% for the year to June, benefiting from the rebound in global equity markets.
The fund, which fell 22.1% in the previous year, said the return represented a 12.85% premium to the risk-free rate - which is the return on 90-day New Zealand Treasury bills - for the year.
The fund was launched in 2003 with $NZ2.4bn ($1.8bn) in assets under management. This had grown to NZ$15.6bn by the end of this June and to NZ$16.2bn by the end of August.
Fund chairman David May said the final quarter of the year had seen further volatility, particularly following concern about sovereign debt.
"Nevertheless, this year's rebound has seen the fund's total return since inception rise to 5.49% p.a," he said. "This remains 0.51% less than the risk-free rate over the same period, but the fund's return was 2.8% below that mark at the end of the previous financial year."
He added: "The increase in the size of the fund in the 2010 financial year best illustrates two key points. First, it supports what the Guardians have repeatedly stressed since the fund's inception: that a growth portfolio makes short-term performance volatile.
"Clearly, we prefer short-term volatility to make the fund go up - as it has for most of this year - rather than down. But the crucial factor is how the fund performs over time. We must remember that, in September 2010, the fund will have been invested for less than seven years of the multi-decade, multi-generational job it was established to do."
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