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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 Authority aims to maximise the Fund's excess return relative to New Zealand Government Stock (before New Zealand tax) without undue risk of under-performing New Zealand Government Stock over rolling ten year periods.

Reference Portfolio

The Authority has adopted a Reference Portfolio for accountability and performance measurement purposes.  The Reference Portfolio is a simple, notional portfolio that could be managed at low cost and return more than New Zealand Government bonds while meeting the Fund's risk objectives.  The long term expected excess return of the Reference Portfolio varies somewhat over time.  The Reference Portfolio also provides a benchmark to measure the Authority's performance in generating value-added returns. 

The Board has approved an increase in the allocation to global equities and a reduction in the allocation to fixed interest to be implemented by 30 June 2020.  The old and new Reference Portfolios are set out in the following table.


Asset ClassWeight as at 30 June 2018 (%)Weight as at 30 June 2020 (%)Benchmark
Global Equities6070MSCI All Country World Index
New Zealand Equities1010S&P/NZX50 Gross Index including imputation credits
Fixed Interest3020Bloomberg Barclays Global Aggregate Index
Total Assets100100
Foreign currency exposure2020