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Auckland's $300 million public nest egg has emerged from international financial storms with an estimated net loss of $2 million for the year to June 30.
"I'm optimistic that we won't be affected very much," said Judith Bassett, chairman of Auckland Regional Holdings - the investment management arm of the Auckland Regional Council.
Mrs Bassett said yesterday the ARH diversified financial assets portfolio had endured market turmoil, finishing the June year valued at $299 million.
"The latest figure we have is $302 million.
"It's not making what we would like it to make but it's still there," she said.
The diversified portfolio of global equities, global bonds and cash makes up nearly a quarter of ARH's total $1.34 billion asset holding.
Other assets are Ports of Auckland, waterfront property and short-term cash investments in New Zealand.
ARH was set up as a council-controlled organisation to provide sustained funding for ARC transport and stormwater projects.
It says the slump in international and local stockmarkets hit its diversified fund returns in the second and third quarters. Despite a recovery in the final quarter, it expected a 2007-08 loss of $2.1 million, after deducting fees.
About half of the diversified fund is in global equities and 40 per cent in global bonds.
An ARH draft report shows 36 per cent of the diversified fund is invested in the United States and Canada, 29 per cent in Europe, 12 per cent in New Zealand, 10 per cent in Asia Pacific, 7 per cent in "emerging markets" and the rest is in cash funds.
Mrs Bassett said she based her optimism on the policies of long-run returns and not putting too many eggs in one basket.
"Those policies are proving their worth."
ARH placed its global shares and bonds with eight different fund managers.
"None of which is AIG, Merrill Lynch or Lehman Brothers or anything like that.
"We don't have any money directly with Lehmans."
ARH's net profit for all activities over the full year is expected to be $57.24 million.
About $141 million has been paid out to the ARC in 2007-08, including $32 million in legacy grants from Infrastructure Auckland, which it replaced in 2004.
