NZ super fund hit hard by world markets

The New Zealand Superannuation Fund, a state-owned nest egg to help fund Kiwis’ future superannuation payments, lost further ground in September to close at $16.63 billion.

The fund lost 3.6 per cent of its value during the month, taking its total losses to 11.1 per cent for the first three months of the financial year.

The fund, which is ring-fenced until 2031, is heavily invested in overseas equities on the basis that they will make bigger gains over time.

It did well in the year to June, rising 25 per cent to reach an all-time peak of $19 billion, after slumping two years earlier during global financial crisis.

During the financial crisis, some commentators said the money should be pulled out and used to pay Government debt.

Perhaps anticipating a similar backlash this year, Super fund chief executive Adrian Orr last month pleaded for taxpayers to be patient with peaks and troughs.

Since 2003 the fund has returned 6 per cent on an annualised basis, a rate of return 0.5 per cent more than the Treasury Bill rate which it aims to better.

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