The chief executive of the New Zealand Superannuation Fund says the sovereign wealth fund is able to “punch above its weight” in international forums because of what it's achieved through its investment returns.
Speaking at the Responsible Investment Association Australasia (RIAA) conference on Tuesday, Jo Townsend told RIAA co-chief executive Dean Hegarty in a Q&A session following a speech that the Fund has a “voice” because of its investment success.
“I think it's fair to say that in some international forums, the New Zealand Super Fund is actually able to punch above its weight in terms of its ideas. But we have to be realistic around what we can actually achieve,” she said.
“So it's about being consistent, putting a view forward and actually participating rather than assuming that somebody else is going to do it for you.”
Last week, 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. That $9.3 billion return on investment is up 69.1% from the $5.5 billion the Fund generated in returns last year.
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.
Townsend, who joined the NZ Super Fund in 2024, has worked in investment management across the superannuation environment for more than 30 years. Her background includes roles at REST Industry Super, NGS Super, Retirement Benefits Fund, Value Capital Management and Rothschild Australia Asset Management.
She told Hegarty that the biggest differences between NZ and Australia when it came to superannuation funds was the amount of money flowing into the market through Australia’s mandated superannuation system and the impact that had.
Australia’s mandated employer superannuation contribution rate is currently at 12%, whereas New Zealand’s default employer KiwiSaver contribution rate is sitting at 3.5%.
“On the flip side though, so much money has flowed into the [Australian] superannuation sector that you can get unintended consequences from regulation that takes place,” Townsend said.
“I think that is a learning for New Zealand, because a lot of the conversations I hear about KiwiSaver here – and there are differences in structures – but a lot of the conversations that happen here around KiwiSaver were happening in Australia 10 or 15 years ago.”
‘A slice of the global economy’
In her speech before the Q&A session with Hegarty, Townsend said the Fund’s investment choices will help shape the future environment New Zealanders retire in.
“That obligation sometimes feels an unusual one,” she said, pointing to faster news cycles, shorter attention spans and global conflict as some of the many drivers compressing investment horizons.
“Our mandates require us to resist that pressure,” she said.
“We are not simply a fund with a benchmark. We are the guardians of a fund created to benefit generations of New Zealanders who will live with the consequences of the decisions that we make today, long after we've actually left the building.”
That time horizon changes how the Fund thinks about the source of investment returns, with most of the fund invested overseas, although 10% is invested in NZ. Townsend described that 10% figure as a “significant amount” to interest.co.nz last week when the NZ Super Fund released its annual results.
“A fund of our size and breadth therefore holds a slice of the global economy. Over decades, our returns will largely reflect that economy's performance, plus the value that we are able to add through investment skills,” Townsend said on Tuesday.
“The economy's health does not sit alongside our returns; it actually produces them. And that economy sits inside physical systems indifferent to our opinions.”
‘The environment we operate in is only going to become more complex’
Townsend described the High Court determining earlier this year that the NZ Super Fund’s sustainable investment policy documents failed to meet the requirements of the 2001 New Zealand Superannuation and Retirement Income Act as an “issue that has attracted considerable attention.”
The Act requires the NZ Super Fund to be managed on a prudent and commercial basis without undue risk, while also avoiding prejudice to the country's global reputation.
The Palestinian Solidarity Network Aotearoa brought judicial review proceedings against the NZ Super Fund in 2025, alleging that the Fund’s investment policies, standards and procedures that the Guardians established under the NZS Act didn’t comply with the “avoiding prejudice to New Zealand’s reputation” requirement and were to that extent unlawful, according to a legal update written by MinterEllisonRuddWatts.
“Given the significance of our role for New Zealand, we expect our approach to be examined and at times challenged. That scrutiny is an important feature of a strong democracy,” Townsend said.
“In response to the High Court's findings, we have created a standalone sustainable investment policy and detailed sustainable investment procedures. Together, they set out how decisions are made, the standards and evidence considered, where expert judgement is required, and how responsibility, authority and oversight are allocated.”
Townsend said sustainable investment was a “fast-moving area” and the NZ Super Fund was continuing to look for ways to strengthen its approach.
“This is important because the environment we operate in is only going to become more complex, with areas like geopolitics, AI, human rights and climate change continuing to dominate headlines and to impact markets. Ignoring these issues does not make them disappear. It simply leaves the investor less prepared for them.”
The four investments at the centre of the application for judicial review were the Guardians’ holdings in US companies Airbnb, Booking Holdings, Expedia Group and Motorola Solutions.
Townsend told Hagerty the NZ Super Fund hasn’t yet tested the four entities in question against the Fund’s new documentation, but it will be the next piece of work the Fund undertakes.
“We’re very clear around what we need to do to make sure that everything is in place, and the next piece for us will be to actually retest those companies,” she said.
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