Jonathan Eriken: Superannuation expert on the record-high investment return from the NZ Super Fund

International technology stocks are being credited with the New Zealand Super Fund reporting another record-high investment return: up 15% in the year to June. 

Super expert Jonathan Eriksen told Ryan Bridge the results make up for a poor return when markets fell in 2022. 

He says they've always gone into a wide range of assets but they're playing it extremely well. 

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Episode Transcript

Speaker 1 (00:00):
The value of the New Zealand Superfund has reached a
record high seventy six point six billion dollars at the
end of financial year twenty four. It's up from sixty
five odd billion a year earlier. Posted an investment return
of almost fifteen percent after costs but before tax for
the year thirtieth of June. It means the fund paid
one point five billion in tax. The government contributions to

(00:21):
the fund during the year were one point six billion.
Jonathan Erickson's the superannuation and superfund expert with us this morning. Jonathan,
Good morning morning, Ryan. This sounds great. Are they just
riding the stock market wave here or is this a
specific strategy that's netting the result.

Speaker 2 (00:38):
Now it is the stock market wave, Ryan, but they're
exploiting that wave very well. They've always gone into a
wide range of assets all around the world, but they
are playing it extremely well and the results this year
make up for a very poor return which everybody had
when the markets went down in twenty twenty five too,

(01:00):
So in that sense, fifteen percent is a great return.
That The key one from my point of view is
that over the life of the fund, which has been
going for over twenty years now they've got over ten
percent peranum and that's a superb result because it's consistent
as well.

Speaker 1 (01:19):
When it comes to real estate infrastructure Timber. These are
things that the part of the active investment strategy that
they have is that is that a significant part.

Speaker 2 (01:28):
Of this No, it's a relatively small part. The bulk
of it is the global share market run that's done
so well. But all these little things on the side help,
and especially in New Zealand. I think the best example
I've got right, and it's an old one now, but
Shell sold its downstream assets and the New Zealand super

(01:49):
Fund and Infantol joined up and boards z and now
we've got zed petrol stations throughout the country and they're
making a much better profit than when Shell owned them.
So it is adding value in a whole lot of
different ways. But as I say, the key to it
is the superb run that the stock markets had since
about October last year.

Speaker 1 (02:11):
What does this mean for us in terms of, you know,
our fortunes and retirement.

Speaker 2 (02:16):
Ah, it's superb because it means that everybody can enjoy
their retirement from age sixty five without feeling that, you know,
the country owes us money or the taxes having to
go up. And that's the best bit. I mean, if
it wasn't for the New Zealand super Fund, we'd be
paying more tax.

Speaker 1 (02:36):
It's almost like we should have done it earlier. Jonathan.
Thank you Jonathan Ericson with our superannuation and super fund
experts and good news for your Tuesday morning. For more
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