As of June 30, 2024, the investment fund’s portfolio was strategically allocated with approximately 15.2% in alternative assets, while developed market equities represented its largest allocation at 20.8%. Private equity investments comprised 14.5% of the portfolio. The equity markets experienced a robust rally throughout the year, driven largely by the strength of the US economy and the anticipation that US interest rates had peaked and were poised to decrease.
In addition, private credit and alternative investments yielded strong returns, aligning with forecasts that suggested persistent inflation and elevated interest rates would continue to drive volatility in risk markets.
The fund’s hedge fund positions, in particular, performed exceptionally well, according to CEO Ardnt, who noted that equities were the only traditional asset class to show significant performance gains this year.
Over the past four years, the fund has effectively realigned its portfolio to reflect updated investment strategies in response to evolving market conditions and increased geopolitical risks, which had been anticipated and highlighted in previous reports.
The CEO further noted that the portfolio is now better equipped to withstand such risks, featuring relatively low exposure to overvalued equities, minimized sensitivity to interest rate fluctuations, and a range of inflation hedges.
The fund’s total assets under management have reached $289.4 billion, bolstered by the Housing Australia Future Fund’s progression towards full investment. The HAFF, a $10 billion initiative established by the federal government and managed by the Future Fund, is now approaching full deployment.
This update is the first since Greg Combet assumed the role of chair of the Future Fund Board of Guardians. Combet emphasized the fund’s significant contribution to Australia’s financial stability, noting that since its inception in 2006, it has generated nearly $165 billion in value through investment returns.
As the new chair, Combet’s priorities include maintaining the focus on achieving the investment mandate of CPI+4-5% per annum over the long term while managing associated risks. He expressed admiration for the fund’s investments in Australian infrastructure assets, such as airports, a major port, renewable energy, and telecommunications and data centers, and emphasized the importance of these assets for Australia’s future.
Combet also highlighted the development of the fund’s ESG capabilities, particularly in relation to climate risks and opportunities, as a key focus area moving forward.
