“Looking ahead, we expect returns to be more difficult to come by, with continued fragility and disruption in global markets and economies combined with rising inflation continuing to be key themes for some time to come. “, did he declare.
The Future Fund has returned 8.1% annually since its inception in 2006, although it has slipped into the red this quarter. The fund is responsible for a number of government-owned investment programs including the Medical Research Future Fund, Aboriginal and Torres Strait Islander Land and Sea Future Fund, Future Drought Fund, Emergency Response Fund and DisabilityCare Australia fund. Each of these funds posted a return of between minus 0.1% and minus 1.5% for the March quarter.
The Future Fund has 8.5% Australian equities and 22.4% global equities. The sovereign wealth fund was one of the first financial institutions to pledge to divest from Russia after the Kremlin invaded Ukraine in February. The fund’s total exposure to Russia was around $200 million and Costello said the divestment had been difficult.
“Sanctions against Russia and the closure of the Moscow stock exchange to foreigners have hampered sales efforts. We will reduce holdings when market conditions allow,” Costello said.