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Our Annual Report for the 2025/26 financial year reflects on a year of strong returns and continued progress towards our goals.
As the Guardians celebrates 25 years since our founding legislation was passed, we are building on what has made us successful to date while also developing the tools and capabilities that will prepare us for the future. With the NZ Super Fund projected to reach $200 billion by 2040, we need to ensure the way we work is scalable for managing a pool of assets that will soon be much larger.
The NZ Super Fund delivered a strong return of 14.17% this year, well above both the 90-day Treasury Bill return and our long-term performance expectation. While total Fund returns for the year were 0.10% below the Reference Portfolio benchmark, in the context of the continued outperformance of global equity markets, we are very pleased with this result. Since inception, the NZ Super Fund has delivered $22.59 billion above what a passive investor with an equivalent risk appetite would have earned.
This year we completed our five-yearly Reference Portfolio review, which is how we set the overall risk profile for the Fund. The review confirmed the Reference Portfolio’s 80% allocation to equities and 20% to fixed income remained appropriate, given the Fund’s long horizon. Reflecting our view that global equities are currently overvalued, we chose to lower our expectations of what the Fund will return over the long term. Another key decision was to slightly reduce the level of value-add we expect the team will be able to generate, over and above the Reference Portfolio, due to adjustments to our risk budget allocations.
Climate change remains a key focus as we seek to further enhance our sustainable investment approach. This includes seeking to scale-up our allocations to climate-related Impact Investments, whilst reducing our risk exposure. As at 30 June 2026, we were well on track to meet our Board-approved Greenhouse Gas (GHG) emissions reduction targets by 2030.
As part of a staged transition, this is the second year in which we have reported under our strengthened GHG emissions assessment methodology, bringing our approach more closely into line with global practice and other Crown Financial Institutions. Our 2025 figures have been recalculated and restated in the 2026 Climate Change Report to provide a clearer year-on-year comparison.
More information on our approach to sustainable investment can be found in our 2026 Climate Change Report and 2026 Stewardship Report, both of which are available on our website. Sustainability-related reporting continues to be a dynamic area. Our approach is to maintain proportionality, integrity and transparency in our disclosures, while allowing time for the quality and reliability of data, tools and practices to mature.
Our Annual Report addresses the judicial review proceedings recently brought against the Guardians, and how we have responded to the related High Court judgment. We have now reformulated our Sustainable Investment Policy documents and are now progressing our review of the companies named in the proceedings according to the updated Policy. We will update stakeholders when this work is complete.
Setting up the right technology to help us make informed investment decisions is an important part of preparing for the future. This year we delivered our multi-year Investment Data and Analytics Programme and transitioned our data and investment models to our modern cloud-based data platform. We have also focused on how we can use AI to improve the way we work at the Guardians, and while there is still much to be done, we have made significant progress in these areas over the past year.
We have improved and simplified our processes and our organisational structures this year, restructuring our People and Culture and Investment teams. By re-evaluating how these teams had evolved over time, we were able to identify opportunities to make the way we work more efficient and scalable.
Over the coming year, we will remain focused on embedding our new team structures and continuing to strengthen our processes, technology and investment approach.
Earlier this year, sovereign wealth fund experts Global SWF once again ranked the NZ Super Fund as the world’s top performing sovereign wealth fund over the past 20 years. My aim as CEO is to put in place the structure and systems that will enable us to maintain this world-class performance.
I would like to thank the entire Guardians team for all their work over the past year and their ongoing commitment to achieving our purpose. purpose: Sustainable investment delivering strong returns to all New Zealanders.
Jo Townsend
CEO, Guardians of New Zealand Superannuation
The Guardians' 2026 Annual Report, along with this year's Climate Change and Stewardship Reports, is available here
For further information, contact John Redwood on +64 212 509 657