Source: MIL-OSI Submissions
The paper explains the Guardians’ Portfolio Completion programme, a value-adding activity which aims to achieve efficiencies in the management of the Fund’s passive exposure to equities and bonds (making up approximately 60 per cent of assets under management) and the associated currency hedging.
“Portfolio Completion minimises and reduces the direct and indirect costs associated with running the NZ Super Fund’s Reference Portfolio investments, hedging and active investment activities.
“The strategy relies on robust governance and decision-making processes, which help us to manage uncertainty and navigate complex challenges in order to secure cost-efficiencies for the Fund,” says General Manager of Portfolio Completion, Mark Fennell.
Portfolio Completion activities span foreign exchange management, liquidity management and rebalancing the Fund’s Reference Portfolio investment mix.
Since it was established in 2009 the Portfolio Completion programme has expanded beyond traditional treasury management to become one of the key drivers of value for the NZ$44 billion Fund, returning approximately NZ$700 million in valued-added returns during the past five years.
More recently, the ongoing impact of COVID-19 on international markets demonstrated Portfolio Completion’s positive impact, allowing the Guardians to raise liquidity and ensure the Fund is well-positioned to take advantage of market opportunities.
The paper is the latest in a series that provides insights into the operation of the Guardians and can be downloaded here: