Future Fund enjoys 12.2 per cent return as it prepares for testing times ahead for economies, nations

Future Fund bosses say they have focused on preparing for growing global risks while making the most of the Indian summer of 2025.

Boosted by a surprisingly buoyant US economy and a falling Australian dollar, the sovereign wealth fund enjoyed a bumper 12.2 per cent return in 2024 as its total value grew to $239 billion.

Future Fund chief executive Raphael Arndt said the strong result was testament to his team’s efforts to “understand significant and lasting changes in the world”.

“We have focused on ensuring we are equipped to navigate these changes to the investment environment, including the resurgence of geopolitical risks,” Dr Arndt said.

Partially driven by an investment re-allocation, the Future Fund’s total holdings in developed overseas share markets rose from $37.7b in December 2023 to $58.9b a year later — making major international equities almost one-quarter of its holdings.

Fund chief investment officer Ben Samild his team had made $70b of portfolio changes over the past 18 months to deal with risks such as sustained higher inflation and interest rates, as well as less investor-friendly conditions across markets.

“These risks remain prominent,” Mr Samild said. “Geopolitical issues that also featured among our concerns have multiplied and will be in sharp focus for investors around the world this year..

“The changes we have made are designed to provide resilience and flexibility to the changing investment environment.”

While not giving a breakdown of returns in each of its investment categories or re-weightings, the fund’s latest update shows the total value of its infrastructure and forestry holdings surged from $20.5b to $23.7b through 2024.

Alternative investments spiked from $32.7b to $35.1b, while its credit investments increased marginally from $22.6b to $23.1b. Australian share market holdings grew from $20.4b to $24.8b.

Emerging market holdings rose marginally from $13.4b to $13.9b in 2024. The total value of private equity stakes nudged from $31.9b to $33.1b.

The Future Fund’s cash holdings were slashed from $19b to $14b, and property plays were trimmed from $13.6b to $11.3b.

Mr Samild said fears of high interest rates causing a global economic downturn had not materialised in 2024.

A strong year for the US shares was underpinned by economic growth and moderating inflation, plus trade, jobs, wages and balance sheets remaining in “good shape”.

“These conditions provided lots of opportunities for active return generation and the Future Fund benefited from increasing its allocation to international equities,” he said.

“Alternatives, credit and infrastructure all made positive contributions.”