With a return on investment of over 14%, the New Zealand Superannuation Fund generated nearly $10 billion for older New Zealanders in the year ended June 2026.
The NZ Super Fund reported that the Fund reached $94.4 billion in the June year, up 9.7% or $9.3 billion from where it finished a year earlier.
Chief executive Jo Townsend described the result as “satisfying” and said the Fund’s portfolio, which includes timber, real estate and private market investments as well as shares in listed companies, had performed “exceptionally well” in delivering such a strong result in the current market.
“In the short term, a concentrated portfolio can achieve strong results; however, over the long-term, we firmly believe a more diversified portfolio is better suited to our mandate.”
The sovereign wealth fund, which began investing in 2003 with an initial contribution from the Government of $2.4 billion, is managed and administered by a Crown entity called the Guardians of New Zealand Superannuation.
The Fund invests capital contributions it receives from the Government and manages the returns from those investments to help fund the future cost of the country’s superannuation.
Updated population projections and new inflation forecasts, along with the slower expected growth rate for the Fund, mean that withdrawals are now forecast to commence in 2054.
‘Some reversion’ expected in the future
The $9.3 billion return on investment in the June year is up 69.1% from the $5.5 billion the Fund generated in returns last year.
Funds under management have jumped 57.9% or $34.6 billion in the last five years, growing from $59.8 billion in the financial year ended June 2021 to $94.4 billion in the year ended June 2026.
The Fund measures itself across two benchmarks. The first is the rolling yield on 90-day Treasury Bills and the second is the Reference Portfolio return. The Reference Portfolio is a notional, passively managed portfolio of global equities and bonds that is used to determine the amount of value added by the Guardians’ active investment strategies across a portfolio of 80% stocks and 20% bonds.
After costs but before NZ tax, the Fund reported a return on investment of 14.17% in the June year. That’s more than five times above the 2.71% Treasury bills benchmark, but lagged the Reference Portfolio return by 0.1%.
Townsend said the Fund’s returns over the past 20 years clearly demonstrated that from generating $22 billion over and above the passive benchmark.
“To put it another way, during that period the Fund has achieved an annual average return of 9.68%, as opposed to the Reference Portfolio’s annual average return of 8.19%,” she said.
The Fund expects to return at least 7.2% per annum over any 20-year moving average timeframe. This originally used to be 7.8%, but was lowered earlier this year due to concerns that returns from global stock markets would decrease in the future.
“Returns for US equities over the past couple of years are close to double annualised returns for the past 20 years, so we would expect there to be some reversion to the mean at some point,” Townsend said.
As of September, the United States’ benchmark S&P 500 index has risen 71.5% in the past five years, with an annual growth rate of 11.4% and a long-run average of 10%.
NZ's largest tax payer
The Government has contributed $27.4 billion since the Fund began in 2003. At Budget 2026, the Government said contributions to the Super Fund would increase, forecasting a total of $3.1 billion over the next four years, $2.2 billion more than had been expected at the Half Year Economic and Fiscal Update in December 2025.
The NZ Super Fund was the country’s largest taxpayer again over the last year, paying a total of $2.5 billion. Tax paid by the Fund now exceeds the Government’s required capital contribution, a trend the NZ Super Fund sees as set to continue over the coming decade.
“Treasury forecasts that for the next five years our tax payments will exceed the Government’s required capital contribution by more than $1 billion a year, with the difference expected to top $2 billion in 10 years’ time,” Townsend said.
The Government’s contributions to the NZ Super Fund are set by a legislated formula. They will rise from $562 million in the 2027 financial year to just over $1 billion in 2029/30, according to Finance Minister Nicola Willis in May.
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