What if the government had paid down debt instead of investing in the NZ Super Fund?

During its life, it has made $41.6b more in investment returns than the government would have saved in interest by paying down debt. Of that amount, $4.7b was generated in the 12 months to June 2023.

For the year 2022/23, NZ Super gained  $9.7b to total $65.4b – a pre-tax return of 11.87%, thanks to the strong recovery of global equities in the second half of the reporting period. That saw it maintain its status as top performing sovereign wealth fund in the world over the past decade according to the sovereign data platform Global SWF.

Outperforming the government’s cost of funding is one of two key benchmarks used by the fund’s Guardians to measure investment success.

The other is the return compared to its reference portfolio, a shadow portfolio of passive, low-cost, liquid investments (75% equities, 5% NZ equities and 20% bonds) suited to its long term investment horizon.