NewAustralia’s Future Fund returns 15.1 per cent, but future high returns hard to match

1-MIN READ1-MIN

An investor watches the All Ordinaries on the Australia Stock Exchange where the country's sovereign wealth manager, the Future Fund, returned 15.1 per cent for the first nine months of the fiscal year but it warned that future returns may be hard to hit. Photo: AFP

Published: 2:41pm, 28 Apr 2015

Australia’s sovereign wealth manager, the Future Fund, returned 15.1 per cent for the first nine months of the financial year on strong growth for all of its asset classes, but warned that recent high returns would be hard to match in the future.

The fund set up in 2006 by the federal government to cover pension liabilities for its public servants, grew to A$117 billion (US$92 billion) by the end of March, it said in a statement.

Established with contributions of $60.5 billion, the fund’s return for the financial year to date is higher than its three- and five-year returns of 14.9 per cent and 11.6 per cent, respectively.

But Chief Investment Officer David Neal said he was conscious that prospective returns cannot be expected to match the returns generated over recent years.

Australia’s economy has been hit by a commodities downturn that has seen prices for iron ore, the country’s biggest export earner, slide nearly 50 per cent over the past year.

"We are closely monitoring the economic, policy and political drivers at play globally and will continue to adjust the portfolio with the aim of generating good returns in stronger markets while providing some risk mitigation in weaker periods," Neal said in a statement.