The New Zealand Superannuation Fund (NZ Superfund) recently achieved an unassuming yet remarkable milestone, with assets under management now totalling $65.4 billion. This fund was established 22 years ago to make superannuation costs more affordable as the average population age increases.
The NZ Superfund was designed by the government to help save and pay for the future cost of universal superannuation.
This article will explore how the NZ Super Fund achieved this milestone and the differences between KiwiSaver and the NZ Superfund.
Record High Assets Under Management
What led to the NZ Superfund achieving a record high of assets under management, and what is the future outlook for the NZ Superfund?
Importantly, the NZ Superfund is heavily invested in stocks. Global stocks performed exceptionally well during the first half of 2023, which can be attributed to businesses economically recovering from COVID-19.
However, experts predict that stocks will not perform as well throughout the rest of the year due to several factors. For one, central banks continue to try and fight inflation with rising interest rates.
Historically, when central banks increase rates, share prices tend to fall. Also, geopolitical tension remains on investor's minds as the Ukraine war continues and China's economy looks weak.
Difference between KiwiSaver and the NZ Superfund
Despite this impressive performance, Kiwisaver assets under management remain higher at $93.3 billion as of March 2023. This savings scheme was established in 2007 to help New Zealanders save for retirement at the age of 65. While NZ Super is available to any resident over 65, regardless of income and assets, the amount received depends on their living situation and marital status.
KiwiSaver, on the other hand, is an individual savings scheme funded by individuals, employers, and the government. It offers more benefits than the NZ Super Fund, such as the ability to access funds for buying a first home or when experiencing financial hardship. It's impressive that KiwiSaver, which is only 16 years old, has 93.3 billion assets under management compared to NZ Superfunds 64.5 billion.