19. The SWF’s investment decisions should aim to maximize risk-adjusted financial returns in a manner consistent with its investment policy, and based on economic and financial grounds.
19.1. If investment decisions are subject to other than economic and financial considerations, these should be clearly set out in the investment policy and be publicly disclosed.
19.2. The management of an SWF’s assets should be consistent with what is generally accepted as sound asset management principles.
Our legislative mandate requires us to invest the New Zealand Superannuation Fund (Fund) on a prudent, commercial basis and, in doing so, to manage and administer the Fund in a manner consistent with:
(a) Best-practice portfolio management;
(b) Maximising return without undue risk to the Fund as a whole; and
(c) Avoiding prejudice to New Zealand's reputation as a responsible member of the world community.
Within that mandate, we have a commitment to Responsible Investment. This is based on our belief that environmental, social and governance factors are material to long-term returns.
We have published a number of documents which set out how we invest, including how we incorporate Responsible Investment within our overall approach.
Our Statement of Investment Policies, Standards and Practices (SIPSP) is available here.
Our Responsible Investment Framework is available here.
An overview of our Responsible Investment approach is explained in a video here.
We are a founding signatory to the United Nations Principles for Responsible Investment and our regional and global leadership position in implementing the standards is discussed here and here.
The overall assessment of an independent review of the Guardians by Promontory Financial Group in 2014 was “that the Guardians run a very professional operation. The Board is strong and the quality of professional staff is impressive, especially for a small market such as New Zealand. The Guardians’ approach to investing the Fund is intellectually sophisticated, consistent, and disciplined. The Guardians have implemented appropriate investment strategies, as well as sound systems and controls to manage risk and reduce costs. Perhaps most importantly, the Guardians have added substantial value above their benchmark to the Fund. The Guardians have joined a minority of global professional fund managers who have delivered returns in excess of widely-used benchmarks over a sustained period of time. The full report is available here.