Chair Greg Combet said the team pursued more active returns, regional diversification and liquidity, with infrastructure, private equity, credit and alternatives all contributing to the 12.2 per cent return – double its mandated target.
“This very strong result has been achieved amid significant geopolitical upheaval and market volatility, reflecting the quality of the work performed by the Future Fund team in repositioning our portfolio in anticipation of profound changes in global trading conditions,” Combet said.
Since inception in 2006, investment returns have added $191.8 billion to the Future Fund’s value from its original $60.5 billion endowment. The latest uplift alone is equivalent to the annual interest paid on federal government debt, underscoring its role in strengthening the Commonwealth’s balance sheet.
The fund also increased exposure to Australian infrastructure and housing, including stakes in Transgrid, CDC data centres, student housing, and retirement land lease developments, aligning with national priorities such as the energy transition and AI-driven productivity.
“We have achieved these returns while also making significant investments into the Australian economy consistent with the national priorities in our new investment mandate,” Combet said.
“While this is a particularly pleasing result for the past financial year, our focus remains firmly on the long term, successfully navigating the complexities of the period ahead, and delivering on our purpose to benefit future generations of Australians.”
CEO Raphael Arndt highlighted that repositioning the portfolio under the “New Investment Order” since 2021, including greater exposure to developed market currencies, commodities and gold, has boosted resilience, while enhancing long-term real returns.
“We increased the level of structural risk in the portfolio to improve long-term real returns and continued to develop the resilience of the portfolio to a range of scenarios by increasing and diversifying our exposure to developed market currencies and commodities, including gold,” he said.
“Activity in the portfolio totalled $90 billion and touched on all sectors as we sought more active returns, regional diversification and enhanced liquidity and flexibility.”
Returns from risk assets were “well rewarded”, Arndt added, with investors adapting to “consequential changes” in trading relationships and market dynamics.
“Equity markets performed strongly over the year and private markets continued to deliver attractive risk-adjusted returns, particularly in infrastructure where we increased our exposure to Australian dollar assets to protect against inflation and currency volatility,” he said.
As at 30 June, the portfolio mix stood at 10.8 per cent Australian equities, 31.5 per cent global equities, 13.3 per cent private equity, 4.4 per cent property, 11.4 per cent infrastructure and timberland, 8.9 per cent credit, 14.7 per cent alternatives, and 5.1 per cent cash.
The fund returned 4.8 per cent in the June quarter alone, maintaining momentum into the new financial year.
The six other funds overseen by the Future Fund Board of Guardians also grew, rising to $65.8 billion after providing $3.9 billion to their programs. The Medical Research Future Fund returned 9 per cent and the Housing Australia Future Fund 10 per cent, both comfortably ahead of their targets.
