The New Zealand Superannuation Fund has experienced modest gains due to volatile global stock markets.
The fund returned 1.21% before tax and after expenses for the 12 months to June, well down on last year's 25% return.
Overall, the value of the fund remained flat at $18.7 billion for the year to June, though since then, improving stock markets have boosted it to $20.1 billion.
The fund's return against the benchmark 90 day Treasury Bill fell below the expected 2.5% return, making only 1.8%.
The benchmark return indicates when the Government would be better off paying off debt.
New Zealand Superannuation Fund chief executive, Adrian Orr, says despite the lower return, the fund is performing as anticipated.
He says it has deliberately taken on a high risk profile, which means a high exposure to growth - and while this means volatility in the short term, it will eventually outperform the risk-free rate of return.
Mr Orr says the fund has exceeded the 2.5 % target in six of its nine years of operation.