Skip to main content
MENU
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • CIOs
    • Consultants
    • Defined Contribution
    • ESG
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Private Credit
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • Special Reports
    • Washington
    • White Papers
  • International
    • U.K.
    • Canada
    • Europe
    • Asia
    • Australia - New Zealand
    • Middle East
    • Latin America
    • Africa
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2024
    • Eddy Awards
  • Resource Guides
    • Active Thematic Global Equities
    • Retirement Income
    • Fixed Income
    • Pension Risk Transfer
    • Pooled Employer Plans (PEPs)
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. Sovereign Wealth Funds
April 26, 2020 11:12 PM

Australia’s Future Fund reports 3.4% drop for quarter

Douglas Appell
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg

    Australia's Future Fund reported its portfolio dropped 3.4% for the first quarter, largely due to the 'historic dislocation' brought on by the coronavirus pandemic. 

    Australia’s Future Fund Monday said its portfolio ended the March 31 quarter down 3.4% at A$162.3 billion ($99.8 billion), leaving the fund with a decline of 0.2% for the first nine months of its fiscal year.

    The fund’s “dynamic approach has been extremely valuable in helping us prepare for and navigate a historic dislocation brought about by COVID-19,” Peter Costello, chair of the Future Fund board, said in a news release Monday. “The board is focused on positioning for what remains a challenging and volatile environment.”

    Raphael Arndt, the Melbourne-based sovereign wealth fund’s chief investment officer said at a news conference Monday that the fund’s modest declines for a quarter that saw the coronavirus pandemic pummel global equity markets pointed to the success of his team’s efforts to enhance the portfolio’s liquidity and flexibility over the past year, in anticipation of a pickup in volatility.

    But in contrast to a number of superannuation funds in Australia, Mr. Arndt said the Future Fund will stick to its normal schedule for valuing the third of its portfolio invested in illiquid assets — such as infrastructure, private equity and unlisted real estate— after the June 30 close of the fiscal year.

    See more of P&I’s coverage of the coronavirus

    Unlike those super funds whose participants can switch to different options or different funds at any time, the Future Fund doesn’t face withdrawals and consequently isn’t facing pressure to lower valuations sooner to ensure equity between participants leaving and those staying put, he said.

    Had Future Fund cut valuations for its illiquid holdings by the 7.5% quantum a number of super funds announced in late March, its portfolio would have reported a 3.5% decline for the first nine months of the fiscal year and a 6.6% drop for the quarter, Mr. Arndt said.

    The investment team’s heightened focus in recent years on the balance of risks and rewards on offer in public and private markets led it to trim holdings of illiquid assets, such as Gatwick Airport, while bolstering defensive allocations including foreign currency exposures, which “all worked as expected,” Mr. Arndt said.

    For the quarter, the Future Fund’s holdings of listed equities dropped to 33.7% of its portfolio from 36% as of Dec. 31. Of that total, emerging markets shares dropped to 8.6% from 10.2% and Australian equities slipped to 6.1% from 6.8%. Developed market equities held steady from the prior quarter at 19% of the portfolio.

    The fund’s cash holdings, meanwhile, dropped to a multiyear low of 9.6% from 13.7% at the close of the prior quarter, pointing to some rebalancing during the latest period from cash to developed market equities.

    Mr. Arndt cited defensive hedge funds as one opportunistic market segment that had received allocations over the past quarter. Hedge funds accounted for 14.7% of the portfolio as of March 31, up from 13.4% as of Dec. 31.

    With equities’ share of the portfolio shrinking, illiquid asset classes saw their weights increase. Private debt securities rose to 9.7% to 8.6%, infrastructure and timberland climbed to 7.6% from 7.0% and real estate edged up to 6.6% from 6.3%. Private equity jumped to 18.2% from 14.9%.

    Related Articles
    Sovereign ratings downgrades could see ‘record year’ – Fitch
    Coronavirus could challenge NZ Super investment assumptions
    Franklin to shutter coronavirus-roiled credit funds in India
    Recommended for You
    The White House_i.jpg
    Trump puts wealth fund on back burner as ambitions hit limits
    The Daily Telegraph sitting in a newspaper stand.
    Read all about it! U.K. government clears foreign sovereign wealth, pension funds for 15% newspaper stakes
    Saudi Arabia flag flying above buildings.
    Saudi sovereign wealth fund PIF inks deals with 5 asset manager giants
    Sponsored
    White Papers
    The State of Lifetime Income Report
    The Next Wave of LDI Evolution
    Retirement security to future income wins, TIAA brings you the latest financial…
    U.S. Public Funds Top Performers: Q2 2024
    Generative AI Investing: Opportunities at a Key Tech Inflection Point
    Research for Institutional Money Management: Advancing Physical Risk Modelling,…
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • CIOs
      • Consultants
      • Defined Contribution
      • ESG
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Private Credit
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • Special Reports
      • Washington
      • White Papers
    • International
      • U.K.
      • Canada
      • Europe
      • Asia
      • Australia - New Zealand
      • Middle East
      • Latin America
      • Africa
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2024
      • Eddy Awards
    • Resource Guides
      • Active Thematic Global Equities
      • Retirement Income
      • Fixed Income
      • Pension Risk Transfer
      • Pooled Employer Plans (PEPs)
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print