Investment Objective and Asset Allocation
The Authority is required to invest the Fund on a prudent commercial basis. In doing so, it must manage and administer the Fund in a manner consistent with best practice portfolio management, maximising returns without undue risk to the Fund as a whole.
INVESTMENT OBJECTIVE
The investment objective adopted by the Authority is:
“To minimise the Crown's contribution to GSF by maximising the return on the assets of the Fund over the long term, without undue risk, and within a best practice framework.
Investment Performance Measure
The performance of the Fund will be assessed by comparing the after tax return with the NZX New Zealand Government Stock Gross Index (after tax) plus 2.5% per annum measured over rolling 10 year periods.
Risk Parameter
Having no more than a 1 in 10 chance in any one year of a loss to the total Fund greater than 6.0% of the total Fund (after tax).”
ASSET ALLOCATION
The Authority has implemented an asset allocation for the Fund as set out in the table below.
| Asset Class |
30-Jun-09 |
30-Jun-08 |
| |
Actual % |
SAA % |
SAA % |
NZ Equities
|
9.9 |
10.0 |
10.0 |
International Equities
|
50.0 |
49.5 |
47.0 |
Real Estate
|
7.1 |
8.0 |
7.0 |
Fixed Interest
|
21.5 |
24.0 |
23.0 |
Collaterised Commodity Futures |
2.9 |
3.0 |
3.0 |
| Multi-Asset* |
-
|
- |
7.0 |
| Absolute return (formerly Global Tactical Asset Allocation)** |
8.6 |
5.5 |
3.0 |
| Total |
100.0 |
100.0 |
100.0 |
* During 2008 the Authority refined the SAA, reallocating the economic exposures held indirectly through its
multi-asset investments to the other asset classes held by the Fund.
**These investments are subject to lock-in periods and cannot therefore be rebalanced.
Deviation from the SAA is therefore expected.
For all Schemes enquiries contact (toll free) 0800 654 731.