The fledgling New Zealand Superannuation Fund in December released its first monthly performance update, despite conceding that it will be continuing the process of appointing investment managers through much of the first half of 2004.
The report, released in late December, shows that the fund had total assets of $NZ2.709 billion at November 30, including over $100 million in the domestic sharemarket.
Treasury bills valued at just over $2.4 billion were transferred to the fund on September 30, last year, and since then there have been regular contributions of just under $NZ70 million a fortnight.
The report says that by November 30, approximately one-third of these assets had been investment with the fund’s asset allocation as follows:
n Treasury bills and cash ($1.806 billion or 67 per cent of total Fund assets);
n International equities ($575 million or 21 per cent of total fund assets)
n New Zealand fixed interest securities ($22 million or eight per cent of total fund assets);
n New Zealand equities ($102 million or four per cent of total fund assets).
The fund’s CEO, Paul Costello, says it will be some time before the money planned for allocation to each asset class is fully invested.
“We need to allow for the process of selecting and appointing investment managers,” he says. “The first appointment was made in September and work will continue during 2004.”
Costello says that while the Fund’s major performance target is to exceed the risk-free rate of return by average of at least 2.5 per cent after tax a year, this is unlikely to be achieved in the Fund’s first year of operation, given the large amount of cash being held as the appointment of investment managers continues.
The fund in late January announced the appointment of two further investment managers — Fisher Funds Management and Allianz Dresdner Asset Management.
Fisher Funds Management has been appointed to manage a portfolio of New Zealand equities with a focus on smaller companies. It has a mandate requiring that all holdings be outside the Top 10 companies listed on the New Zealand Stock Exchange.
Allianz Dresdner Asset Management will manage a portfolio of international equities with an initial allocation of $NZ 250 million.
Costello says Allianz Dresdner is an active manager and will complement Barclays Global Investors who manage a portfolio more tightly structured around a global share market index.
The fund says it will be appointing several more active international managers throughout the year.
