The net assets of the fund, not to be confused with the New Zealand Superannuation Fund, grew from $3.37 billion to $3.52 billion, an increase of $148 million.
The fund's after-tax return was 7.38% which compares with the median benchmark return of 7.92% measured by the Watson Wyatt Investment Performance survey.
The NZ Superannuation Fund managed 14% over the same period. The GSF results were favourably influenced by New Zealand equities, which produced a return of 21.34% and international fixed interest, which returned 12.32%, about double last year's return.
The NZ equities return was similar to last year while NZ fixed interest was far superior at 7.82% against 2.05% in 2004.
International equities returned 9.05% (20.87%). The fund began investing in property during the year and that returned 11.83%.
It now has 4.9% of the fund in property and plans to raise that by a further 2.6% percentage points.
The fund was set up more than 50 years ago to enable state employees to save for their retirement and it is managed by the Government Superannuation Fund Authority.
It was closed to new members in 1992. It has 70,000 members but numbers are diminishing and the number of contributors has fallen to 22,241 from 23,719 a year earlier and 29,094 in 2001.
Authority chairman Basil Logan, hailed the pre-tax result although noted significantly more tax was paid than in 2004. This arose because all the return from international equities in 2005 came from foreign exchange hedging gains, which were taxable.
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