Australia’s Future Fund posted its best result in its history for the financial year to end-June with an annual return of 22.2%, up from -0.9% in FY2019/20, which put its total assets under management at A$196.8 billion (US$147.6 billion).
Chair of the fund Peter Costello described the A$35.7 billion earnings as “exceptional”, coming after a “wild year”. The fund achieved a 10-year return of 10.1%, which was above the target of 6.1% based on consumer price inflation plus 4-5%. The fund is now triple the size of its initial A$60.5 billion it began with in 2006. Growth is based on the vaccination program, growing confidence, and supportive monetary and fiscal policy.
Growth trends are similar to public pension fund AustralianSuper, which saw its balanced option hit 20.4% in the financial year ending FY2020/21, with a robust 10-year annualized average of 9.7%. Yet, the funds have very different asset allocation profiles with the Future Fund possessing a higher portion of private market investment.
In the past quarter public equities allocations across domestic, global and emerging markets all increased to 35.8% of the fund, while private equity allocations increased from 14.6 to 17.5 per cent from March to June 2021.