How we Invest

Investment Strategy

The Fund produces a Statement of Investment Policies and Objectives (SIPO) setting out the parameters by which the members funds are invested to achieve an acceptable level of return for the risk taken. The most recent review and update to the SIPO was completed and passed by the Board in August 2022_¹.

The key considerations that form the basis of the SIPO include:

• The CINS Act 2000, and its amendments;
• The Trust Deed; and
• The Members needs to achieve financial security in retirement

Prior to 2015, the Fund invested held a single portfolio that consisted of a 70% defensive (bonds) and a 30% growth assets (equities) split had a single portfolio that all members funds were invested. 

In a review of the way the Fund invested, mid 2015 saw the investment options for members expanded to create two new options to offer more risk and a potential higher return. The newly introduced Balanced (60% equities, 40% bonds) and Growth (80% equities, 20% bonds) options were added alongside the existing Conservative option. Over time, more Members started to understand the benefits of choosing the two newer options dependent on their individual risk tolerance and time horizon until retirement.  Following retirement when a member pension is drawn, all member assets are invested by the Balanced option which, upon advice from the fund Actuary, is considered the most appropriate for long term pension investors.

In 2019 the pre-existing SIPO was updated to provide for potential changes in Asset Classes, and in particular the inclusion of the framework to enable direct investments in the Cook Islands. Of the overall Fund portfolio, 20% can be invested domestically.

Again, in 2021, the SIPO was updated to a “Reference Portfolio”approach where the realistic implementation costs are taken into account when measuring performance.  The Reference Portfolio is the cheapest and most simple expression of the fund strategy and it means that any additional investment to add value must measure up favourably against cost, return and risk before it is added.

The three options members can choose from are:

• CINSF Conservative Fund
• CINSF Balanced Fund (Default option for new Members, effective from 1 Jan 2022. Existing Default balances for members will be moved to the Balanced option by the end of 2023.)
• CINSF Growth Fund

Our Reference Portfolio consists of New Zealand PIE funds (Portfolio Investment Entity) using SuperLife Smartshares – a subsidiary of NZX, as our Investment Manager. Our investments include the following ETF (Exchange Traded Funds) products: 

Growth Exposure:

Superlife Total World Fund (Unhedged)

Single asset class structured PIE Fund solely invested into international equities via Vanguard Total World Stock ETF. Benchmarked to FTSE Global All Cap Index.

Superlife Total World Fund (NZD hedged) 

As above, but hedged to the New Zealand dollar.

Defensive Exposure:

Superlife Global Aggregate Bond Fund (NZD hedged)

Single asset class structured PIE Fund solely invested into international fixed interest via (Blackrock) iShares Core Global Aggregate Bond UCITS ETF.

Summary of Investment Portfolios

Reference Portfolio for Conservation Option

Reference Portfolio for Balanced: Default Option/ Pension Assets/ Reserves

Reference Portfolio for Growth Option