Future Fund jumps back
Superannuation guardian Future Fund posted a 10.6 percent return for the financial year.
The return to profitable levels comes after a negative return of one percent in the final quarter and two successive years of losses in the wake of the global financial crisis (GFC). The average fund, however, remains 15 percent less than in October 2007.
Future Fund board of guardians chair David Murray said, “Improved market confidence through the year has seen performance pick up, albeit that the outlook for global markets remains fragile in the aftermath of the financial crisis... Cash holdings in the portfolio were reduced from 41 per cent to 13 per cent over the year as capital was deployed into a wide range of strategies consistent with our long term objective.”
Murray also explained that the fund was designed to be less reliant on equity markets to generate returns. He added, though, that draw downs on the fund's private equity program are modest. The equity program is worth $1.9 billion or three percent of assets.
The fund has $67.3 billion in assets including the $4.3 billion Telstra stake. It was originally formed to meet public sector superannuation liabilities, but it now covers nation-building funds such as the $9.8 billion Building Australia Fund, the $5.5 billion Education Investment Fund, and the $4.7 billion Health and Hospitals Fund.