17 February 2005

Vanguard Investments appointed to manage global listed property mandate

Vanguard Investments Australia Ltd is pleased to announce it has added global property to its portfolio management capability. This follows the announcement today by the New Zealand Superannuation Fund that it has awarded Vanguard a NZ$100 million mandate for a global listed property portfolio.

The portfolio will track the UBS Global Real Estate Investors Index (in New Zealand dollars) as the chosen benchmark. This Index represents approximately 200 companies whose revenue is predominantly driven by property rental income, and provides broad diversification by region and sector.

Vanguard's Chief Investment Officer, Eric Smith, says the New Zealand Superannuation Fund decision was a strong endorsement of Vanguard's property securities management capability. Global listed property is a rapidly evolving asset class and Vanguard is a significant player in this area, able to draw on both Australian and US expertise.

In Australia, Vanguard manages A$3.1 billion or 4% of the LPT sector for Australian clients. Over A$1.5 billion of this is held in the Vanguard Property Securities Index Fund. In the US, the Vanguard REIT Index Fund - one of the country's largest property securities funds and one of a number of Vanguard funds holding real estate investment trust securities - has assets of US$5.7 billion or 2% of the REIT sector.

Vanguard in Australia now has A$31.2 billion in funds under management and invests in all of the major publicly traded asset classes. A web link and copy of the New Zealand Superannuation Fund Press Release dated 17 February 2005 announcing this mandate and Vanguard's role is enclosed for further information. http://www.nzsuperfund.co.nz/news.asp?PageID=2145823473&RefId=2141730567

NZ Super Fund : Press Releases

Vanguard Investments Australia Ltd Appointed to Manage Global Listed Property Mandate

The Board of the Guardians of New Zealand Superannuation today announced that Vanguard Investments Australia Ltd has been appointed to manage a global listed property securities mandate.

With an initial allocation of NZ$100 million, the appointment of Vanguard Investments Australia Ltd represents the Fund's first commitment to property.

Vanguard Investments Australia Ltd, a wholly owned subsidiary of the Vanguard Group Inc, will manage the mandate on a passive basis, with the UBS Global Real Estate Investors Index (in New Zealand dollars) as the chosen benchmark. The Index represents approximately 200 companies whose revenue is predominantly driven by property rental income, and provides broad diversification by region and sector.

New Zealand Superannuation Fund Chief Executive, Paul Costello, said: "Property is an important part of our long-term investment strategy, and today's announcement is the first step in building the Fund's portfolio. Looking ahead, we will turn our attention to unlisted property, both within New Zealand and overseas, and to further considering the role of active management in the listed market."

This is the second mandate awarded to Vanguard Investments Australia Ltd. In November 2003 the firm was appointed to manage an international government bond mandate.

Commenting on the appointment, Vanguard's Chief Investment Officer Eric Smith, said: "We are delighted to have been chosen to manage additional assets for the New Zealand Superannuation Fund. Global property securities are a rapidly evolving asset class attracting a lot of attention from investors in the region. We appreciate the Fund's recognition of our experience, knowledge and exceptional level of ongoing service in awarding us this mandate, and look forward to the continued development of our relationship."

The appointment of Vanguard Investments Australia Ltd brings the total number of external investment managers to 19. The value of the New Zealand Superannuation Fund as at 31 January 2005 was $5.5 billion.

For more information please contact:

Paul Costello, CEO, New Zealand Superannuation Fund, + 64 9 300 6980
Daniel Riordan, Media Relations, New Zealand Superannuation Fund, + 64 274 921 221
Eric Smith, Chief Investment Officer, Vanguard Investments Australia Ltd, +61 3 9928 3760 or
Scott Lawrence, Head of Institutional Sales & Client Relationship Management, Vanguard Investments Australia Ltd, +61 3 9928 3813