NZ Super Fund considers changes
The fund's Head of Strategy, Tore Hayward, says after four and a half years the fund is through the set up phase and is now looking at how it invests.
Three options are being considered as possible changes. The first is short-term timing and trying to pick where the markets are going. He says this has been ruled out as there is not sufficient predictability.
The second is a longer term timing plays, which he calls "long term strategic tilting". This involves taking longer-term bets and would only be done if the fund was reasonably confident with its predications.
He says a lot of modelling work has been done looking at markets and the may be occasions, like at the moment, where international shares look to be undervalued.
The third idea is that the fund becomes an "insurance provider" to distressed balance sheets.
Hayward told the Super Funds conference in Wellington yesterday that these ideas are under consideration, but no decisions have been made yet.
He says modelling of its current asset allocation shows that the fund has an "almost 99% probability" of adding value. Since its inception the fund has performed in the top end of its expected return range, but performance since the middle of last year has trended towards the lower end of expectations.
