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Working paper

An Application of Portfolio Theory to New Zealand's Public Sector (WP 98/04)

Issue date: 
Tuesday, 1 December 1998
Status: 
Current
Author: 
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Document Date: 
Publication category: 
Fiscal year: 
1998/99

Abstract

In this paper, modern portfolio measures of performance are applied to the New Zealand central government's assets and liabilities. The results of this analysis show the position of the government's portfolio relative to its individual holdings. Using this analysis, alternative uses of budget surpluses are considered: reducing domestic debt, reducing foreign debt, increasing lending to students, and investing in equities. Greater investment in equities, by the government, stands out as improving the performance of the portfolio (ie lower volatility and greater returns).

Last updated: 
Wednesday, 24 October 2007