The New Zealand Superannuation Fund made its biggest annual return in 2010/11 since its establishment eight years ago, making 25% after fees from riding the rebound in global equities.
The value of the fund, which was set up to help pre-fund pensions for an ageing population, rose NZ$3.9 billion in the 12 months ended June 30, more than half the pre-tax returns it has made since its inception in 2003.
That beat its previous best performance in 2005/6 when it made an after fees return of 19%.
The so-called Cullen Fund, named for architect former Finance Minister Michael Cullen, had NZ$19.03 billion under management as at June 30, and has beaten Treasury bills by 2.23% since its inception, just 27 basis points shy of its benchmark.
The year marked a change in investment policy at the fund as it lifted its exposure to international stock markets after having to deal with the suspension of government contributions that have made up the bulk of its cash.
As at June 30, the fund had almost 61% of its cash in global stocks, followed by international fixed interest at 11% and infrastructure at 9.5%. Timber investment was the next largest exposure at 6.8%, then New Zealand shares at 5.2% and global listed property at 4.2%.
The fund held 2.6% in other private markets, 1.3% in local property and 1.2% in private equity, with just 0.1% in New Zealand bonds.
Auckland International Airport Ltd. was the biggest locally listed holding, making up 1.5% of the fund, while Transurban Group was the biggest foreign listed holding, also at 1.5%.