As global stockmarkets climb and climb, the New Zealand Super Fund has hit an all-time high and this year enjoyed its most profitable month ever. So why was it again that the government cut contributions?

A funny thing happened to me in the candy store yesterday. I ran into a guy who knows a thing or two about the New Zealand Superannuation Fund and he mentioned it rapid rise in recent months.

"After all those stories about it falling, you don't see much about how it's come back," he sighed. And he's right. I've been wondering in recent weeks how it was getting on, so I've just had a look. It's impressive reading. Considering I've given that guardians of the Cullen Fund a serve in the past, I thought it was only fair to tip my hat to them for their performance in the past six months.

After a good first five years, the fund had reached $14.5 billion in August last year. Then Lehman Brothers happened and the global economy's financial scaffolding came tumbling down. The Fund was down eight percent in September, 13 percent in October and another five percent in November.

By January the fund was down by almost a quarter and some, such as our friend over at Kiwiblog, were dancing on its alleged grave. Something had to be done about the left-wing plot to actually save. And, of course, something was done.

Bill English announced that the government wouldn't be contributing anything more to the Super Fund until its books were back in the black.

I was wary at the time. I wrote:

The return on every dollar invested now will be much better than usual. Don't forget, when stockmarkets recover they recover quickly and the big money is made early on.

I'm not going to crow at this point; questions remain about whether the market recovery at the moment is sustainable and built on anything real. But I can report where we're up to.

The Cullen Fund bottomed out in February this year, at $11.2 billion. But the fund has been rebounding since March. It's worth noting, that was three months before English presented his Budget. The recovery trend was already in place by Budget time; indeed the fund's best month this year – it's best month EVER – was in April, the month before the Budget. It gained 6.74 percent that month. It had another great month in July, with 6.31 percent growth.

The good news for all New Zealanders is that as of September the fund has reached an all-time high of $15.2 billion. Its growth in 2009-10 to date is 11.98 percent.

You'll probably be aware that stockmarkets around the world are on a rapid ride back up, with America's Dow Jones (an average of 30 US shares) passing 10,000 points again a week and a half ago. From memory, the Dow topped 14,000 shortly before the credit crisis, so there's a way to go yet. (Fun facts: The Dow topped the 10,000 mark for the first time in its history back in March, 1999. As recently as 1979, it was at just 862 points, according to PBS).

Yet the government cut this year's contribution by just shy of $2 billion. If it had paid that money into the fund at Budget time, and if you apply that 11.98 percent growth rate for the nearly six months since, you're talking about over $100 million the fund has missed out on in just that short time.

Yes, we may have had to borrow to fund that investment. But my wild guess is that the government is currently borrowing at less than 12 percent. Sounds worth it to me, especially in the long-term.

Investment funds will always duck and dive over time. The point is that if you take a hit as the Cullen Fund did in 2008, you want to make damned sure it's maximising its returns in the upswing. And that's now. Sad the government used a short-term debt crisis to undermine efforts to prepare us for a huge long-term debt crisis that will hit our children and grand-children.

But well done to the Cullen Fund for its guardianship. Here's hoping there are many more good months to come.