Super Fund says April a good month for its investments

Super Fund chief executive Adrian Orr. Photo Paul Estcourt

The New Zealand Superannuation Fund recorded its second positive monthly return in April since the world wide recession sent it into a nose dive, the fund's chief executive Adrian Orr said today.

Speaking after appearing at a parliamentary select committee hearing this morning, Orr said the unaudited figures for April showed strong returns from equity markets.

"If you went from the trough mid-March to the most recent figures in early May, we are up around 16 per cent, which in dollar terms is $1.75 billion," said Orr.

Treasury yesterday reported the fund had made a profit in March of $200 million after a year that saw billions of dollars wiped off its assets.

The unaudited profit in April was around 8 per cent or $1b, Mr Orr said. For the year ending April the fund was still down about $3.8b.

Finance Minister Bill English has indicated the Government is looking at suspending contributions to the fund as it tried to get its spiralling debt under control.

Orr said if this happened the fund could still function as it had a large amount of liquid assets.

The Government is due to put in around $2b next year.

Orr told the finance select committee that there were many cheap distressed assets out there that the fund believed would make good long-term investments.

The Government has written to all Crown agencies about the risk profiles of their investments after Mr English expressed some concern that too much risk was being taken.

Orr said the Government was thinking about the entire Government balance sheet.

Asked if English was unhappy with the fund's risk profile, Orr said he had no comment to make.

During the election campaign, National indicated it wanted the fund to invest 40 per cent of its assets in New Zealand.

Orr said no direction had been received.

Currently the fund had 27 per cent invested in New Zealand, 18 per cent of that was in equities, timber, property and infrastructure.

Orr said it would continue to look at investing in New Zealand, but had to focus on maximising long-term returns.

NZPA