The Future Fund has issued its Portfolio Update for 2018, revealing an annual return on investment of 9.3 per cent and a total investment portfolio of $175 billion.
The Future Fund itself stands at $145.8 billion.
Chair of the Future Fund Board of Guardians, Peter Costello (pictured) said the fund existed to strengthen the long-term financial position of Governments.
“It continues to achieve this with a 10 year return of 8.7 per cent per annum, exceeding its benchmark of 6.6 per cent,” Mr Costello said.
He noted the fund was adding 6.6 per cent a year above inflation from its original seed capital $60.5 billion.
“The Board of Guardians invests for the benefit of future generations of Australians,” Mr Costello said.
“This requires us to be prudent in investing the assets of the Future Fund, and we have generated good long-term returns while avoiding excessive risk.”
He said the short-term outlook was for a continuing period of sustained synchronised growth.
“Over the medium to longer term, a number of risks remain and continue to evolve,” he said.
“Inflationary pressures may soon emerge in the United States, and as interest rates around the world begin rising towards more normal levels we expect to see downward pressure on asset prices,” he said.
“International political and trade tensions continue to impact markets and the potential for further shocks remains.”
Chief Executive of the Future Fund, David Neal said the Fund remained sharply focused on the long-term objective.
“Everything we do, every decision we make, is focused on investing for the benefit of future generations of Australians,” Mr Neal said.
“In the current environment we retain high levels of portfolio flexibility to both withstand — and potentially take advantage of — any market dislocations that might arise.”
The Future Fund’s four-page update can be accessed at this PS News link.
