For the year ending June 30, 2024, the Future Fund, with assets totaling $225 billion, reported a notable 9.1% return, surpassing its target by 130 basis points. This performance was bolstered by robust returns from listed equities and alternative investments, alongside strategic portfolio adjustments aimed at enhancing resilience.
Future Fund Chief Investment Officer Ben Samild highlighted that the past year represented one of the fund’s most successful periods for alpha generation. “Despite maintaining a relatively low allocation to listed equities, which were a major driver of global risk asset returns, we are pleased with the results achieved,” Samild noted during a media briefing.
The fund’s strong performance was attributed to both beta and alpha components of its listed equity investments, substantial gains from its hedge fund and credit portfolios, and strategic enhancements made over the years. These included investments in commodities and foreign exchange baskets, which contributed positively to returns.
While the fund has consistently outperformed its return target since its inception in 2006, it has faced challenges in meeting its CPI-plus return target amid recent inflation spikes. Over three years, the fund returned 4.5% annually, falling short of the 9.3% target, and over five years, it returned 6.7% annually, compared to a 7.9% target.
Samild acknowledged the difficulty in achieving returns during periods of high inflation and shifting interest rates, noting that these conditions have impacted performance. However, with inflation and markets gradually stabilizing, the fund has once again exceeded its mandate this year.
In terms of long-term performance, the Future Fund continues to perform well against its targets, with a seven-year annual return of 7.8% versus a 7.3% target, and a ten-year annual return of 8.3% versus a 6.9% target. This solid performance underscores the fund’s ongoing alignment with its long-term investment objectives.
