The Future Fund shifted 2 per cent of its portfolio out of cash into developed market global equities in the three months to 30 September.
The Future Fund portfolio increased to $134.5 billion in the three months to 30 September, with the fund delivering a return of 7.7 per cent per annum since inception.
The first quarter of 2017-18 represents the first time the Future Fund has operated under new benchmark return, which was lowered by the government to CPI+ 4 per cent to 5 per cent from CPI+ 4.5 per cent to 5.5 per cent in May 2017.
The main change to the portfolio in its 30 September 2017 portfolio update was a reduction in cash and a corresponding increase in developed market global equities.
Cash held by the Future Fund was reduced from $28 billion on 30 June 2017 to $25.4 billion on 30 September 2017. Developed market global equities increased from $19.9 billion to $22.6 billion.
The changes equate to a 1.9 per cent increase in the allocation to developed market equities to 16.8 per cent of the total portfolio, and a decrease in cash of 2.1 per cent to 18.9 per cent of the portfolio. The allocation to Australian equities remained the same at 6 per cent.
Future Fund chairman Peter Costello said, "The Future Fund continues to meet its objective, which is to strengthen the Commonwealth’s long-term financial position.
"Global markets have continued to strengthen, supported by improving economic conditions. Around the world there is still a degree of uncertainty over the timing of interest rate rises, although such are looking increasingly likely.
"In this environment, the board maintains its discipline and prudent approach to investment, focusing on growing and avoiding excessive risk with the capital in our care for the benefit of future generations of Australians."
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