Wellington, Dec 10 NZPA - The New Zealand Superannuation Fund reported another positive performance in November in what it described as a "year of two halves".
The fund's chief executive Adrian Orr told MPs that the latter half of 2008 and the beginning of 2009 had been a "difficult year" which ended with a 22 percent loss ($3.2 billion) for the 2008/2009 financial year.
Since then holding on to growth assets and not panicking had resulted in a turnaround.
Last November the fund had an unaudited return of 2.6 percent or $405 million and in the year to November had made gains of 14.7 percent or $2 billion.
The fund now had assets of $15.l61 billion, which is around the same return that would have been gained by investing in Treasury bonds when contributions began in 2003.
Mr Orr said the fund was well placed to return to the strong gains it made in the early years and increase the value of the fund in the long term.
Board chairman David May said most external managers "performed poorly in uniquely poor conditions" in 2008 and the fund had improved its in-house capacity to manage risk.
Mr Orr said not panicking in the "year of two halves" and maintaining a long term focus had paid dividends.
The fund was set up by the previous government to pre-fund part of the future cost of superannuation payments.
The incoming Government suspended payments into the fund, saying it would not borrow to invest in it.
The Government's books are currently not forecast to return to surplus for 10 years.
Mr Orr said those managing the fund had the choice of "sulking" over the decision or getting on with their job, they had decided to do the latter.