Year Ended 30 June 2021

The Fund's return, net of investment management fees and before tax, for the year to 30 June 2021 was 28.9%.  This is the highest annual investment return achieved by the Fund since the Authority was established in 2001.

Up until 2001, the assets of the Fund were all invested in New Zealand Government Bonds.  The Fund is now invested in a diversified range of asset classes.  The Fund has outperformed New Zealand Government Bonds by 2.2% pa net of investment management fees since 2001 and by 5.5% pa over the last 10 years.  The assets of the Fund now total $5.2 billion.  During the year the Fund increased its private equity investments and reduced exposure to its style premia and catastrophe risk portfolios, reinvesting the proceeds in global equities and bonds.

The investments of the Fund are reviewed regularly to confirm they remain fit for purpose and our investment managers are performing in line with expectations.

Table 1: Investment Performance

Investment Returns

Below is a comparison of the returns from each asset class compared to the relevant asset class benchmark. All returns in New Zealand dollars before tax and after investment fees.

Table 2: Asset Class Returns compared to Benchmark Returns

1. The Total Fund return includes currency hedging to the NZD.  Returns for global bonds, catastrophe bonds, catastrophe insurance, life settlements and style premia are fully hedged.  Returns for global equities and global private equities are unhedged.   

2. The benchmark for the Total Fund is the Reference Portfolio.

3. The benchmarks for global private equities and New Zealand private equities are the same as for global equities and New Zealand equities respectively plus 3% pa.

Change in Net Assets of the Fund

Set out below is a table showing the change in the net assets of the Fund for the financial year to 30 June 2021.

Table 3: Change in Net Assets of the Fund

Net Assets

The net assets have been taken from the financial statements for the year ended 30 June 2021.