The NZ Superannuation Fund (NZS) has trumped its international peers for the second time in three years, according to the latest annual performance study by niche research firm, Global SWF.
NZS topped the Global SWF analysis of all sovereign wealth fund investment performance with a 10-year annualised return of 12.1 per cent to the end of 2022.
The now $60 billion plus NZ fund also came out ahead in the researcher’s first performance comparison report covering the 2020 period while ranking third the following year just 20 basis points shy of the respective second- and first-placed Swedish AP Fonden and the Wisconsin Retirement Scheme – albeit under slightly different measurement conditions.
“This year we decided to look at 10-year annualized returns as opposed to 6-year averages, given that 2022 losses had a huge toll on some funds and the difference reporting dates make,” the Global SWF report says. “For example, leader NZ Super closes accounts on June 30, so the 12.1% does not reflect the large losses the fund had inQ2 CY22. And yet, even if the kiwi fund had closed on December 31, its 10-year return would have been 11.0% and it would have still led the table.”
The Canadian Pension Plan (10.9 per cent), AP Fonden (10.4 per cent) trailed the NZ fund with the Australian Future Fund in fifth place with an annualised 10-year performance record of 9.7 per cent.
As reported previously, NZS chief, Matt Whineray, tended his resignation last week, giving about six months notice. Whineray has led NZS since previous chief, Adrian Orr, departed late in 2017 but his planned exit follows a flood of resignations in counterparts offshore, Global SWF reported.
“This is the ninth change in leadership of a Sovereign Investor in 2023 so far, after Ethiopia’s EIH, UAE’s GPSSA, Malta’s MGI, Australia’s CBUS, Sweden’s Alecta, Israel’s ICF, Senegal’s FONSIS and Bahrain’s Mumtalakat,” the report says. “Sadly, we continue to see a significant churn ratio at the top of SOIs [state-owned investors].”
The well-regarded Global SWF, led by Diego Lopez, has also just added a comprehensive central bank investment dataset to its existing sovereign wealth and public pension fund product lines.
Global SWF says the “challenging and fascinating” effort provides data on “this important set of 176 institutions across, literally, every country of the world”.
“Similar to our coverage of sovereign wealth and public pension funds, we are focusing not only on strategies and investment portfolios (in this case, split by gold-IMF-SDR-FX, and by currency), but also on the operational structure and governance of every institution,” the report says.
“… Today, Central Banks around the world own US$ 15.4 trillion in total reserves, down from US$ 16.1 trillion in 2021. 78% of this capital is invested in foreign reserves (of which, 54% is in USD and 19% in EUR), while 14% is invested in gold, and the balance, in special drawing rights (SDRs) and reserves held at the international monetary fund (IMF).”
By comparison the 176 sovereign wealth funds in the Global SWF files manage a collective US$11 trillion while public pension funds held US$20.9 trillion as at the end of last year.