Australia’s Sovereign Wealth Fund (future fund) 10 year investment results

Portfolio update at 30 September 2018
- Future Fund grows to $148.8bn
- 10-year return of 9.2% pa exceeds benchmark target of 6.5% pa
- Exceeds benchmark return across all time periods, while managing risk levels
- Across five public asset funds, the Board of Guardians now invests $180.7bn

https://www.futurefund.gov.au/news-room/2018/10/22/04/05/portfolio-update-to-30-september-2018

This stellar result is in marked contrast with the mediocre performance of workers’ superannuation fund accounts investing corporate Superannuation Guarantee Payments.

The recently released Draft Report of the Productivity Commission blames high fees impacting the balances of multiple small accounts for the poor returns, and has recommended limiting management to ten outperforming funds.

It is questionable however whether such exclusivity is justified with risk-averse funds outperforming in market downturns, and growth funds in bullish markets.

Might it not be better for the government to create a common fund similar to the future fund, drawing on approved investment expertise, for the management of compulsory super-guarantee payments, leaving unchanged present arrangements for contributory superannuation funds?

As the population demographic ages, and the proportion of pensioners to tax-payers increases, it will be increasingly difficulty for governments to fund all their obligations for aged care from the budget alone.

Categories: Superannuation, Uncategorized