Future Fund, Melbourne, Australia, lost 2.9% on its investments in the third quarter despite reducing its holdings in shares and increased its cash and hedge fund allocations.
The Australian and global stock markets fell 12% and 14%, respectively, during the same quarter, the fund said in a statement.
“The board is mindful that the uncertainty in financial markets can be expected to endure as the global economy continues to undergo significant structural adjustments over years to come,” said David Murray, chairman of the A$73.1 billion (US$78.2 billion) Future Fund Board of Guardians.
“The board continues to focus on building a diverse portfolio comprising assets capable of generating strong returns,” Mr. Murray said.
The fund has had an annualized return of 4.4% since May 2006.
The fund’s asset allocation as of Sept. 30 was 21.6% alternatives, 19.2% debt securities, 16.1% developed markets equities, 10.8% cash, 10.6% Australian equities, 6.3% real estate, 5.6% infrastructure and timberland, 5% private equity and 4.8% emerging markets equities.
Brett Cole is an editor at I&T News, Sydney.