The New Zealand Superannuation Fund, often referred to as the "NZ Super Fund" or simply "the Fund," is a sovereign wealth fund established by the New Zealand government in 2001. The primary purpose of the fund is to partially pre-fund the future cost of New Zealand's universal superannuation scheme, which provides pension benefits to the country's retirees.
The NZ Super Fund operates under the New Zealand Superannuation and Retirement Income Act 2001 and is managed and administered by an autonomous Crown entity called the Guardians of New Zealand Superannuation (the Guardians). The Guardians' Board is responsible for overseeing the fund's investment strategy, risk management, and overall performance.
The NZ Super Fund's investment strategy is focused on maximizing returns over the long term without taking undue risk. The fund invests in a diversified portfolio of assets, including equities, fixed income, real assets (such as infrastructure and property), private equity, and other alternative investments. The fund's investments are spread across various countries and sectors to achieve a balanced and well-diversified portfolio.
The NZ Super Fund is designed to be a long-term investor with a high tolerance for market volatility. It adopts an active investment approach, aiming to capitalize on market inefficiencies and add value through active management strategies. The fund's performance is benchmarked against a reference portfolio, which represents a passive investment strategy with a specific allocation to various asset classes.
One of the unique features of the NZ Super Fund is its commitment to responsible investment practices. The Guardians incorporate environmental, social, and governance (ESG) factors into their investment decision-making process and engage with the companies they invest in to promote better ESG practices. The fund is also a signatory to the United Nations-backed Principles for Responsible Investment (PRI).
The NZ Super Fund had assets under management of approximately NZD 58 billion. The fund is expected to grow significantly in the coming decades as the New Zealand government continues to make annual contributions, and investment returns accumulate. The fund is designed to help ease the financial burden of an aging population, ensuring that New Zealand can maintain a sustainable pension system for its retirees in the long term.