2 weeks Ago By Jacob Shteyman
Australia's sovereign wealth fund added a hefty $26 billion in 2024, boosted by the sterling performance of US shares. or signup to continue reading The 12.2 per cent return on was well in excess of the 6.
4 per cent mandated target and brings the 10-year return to 8.1 per cent, the fund's Board of Guardians announced on Wednesday. Since its establishment in 2006, $177 billion in investment returns have elevated the fund to a record $237.
9 billion in value. "This was a strong result that reflects the work we have done over the past few years ..
. to understand significant and lasting changes in the world," chief executive Raphael Arndt said. New investments made by the fund during 2024 included a stake in Melbourne's Eastlink toll road and a national portfolio of student accommodation facilities.
Strength in investments in the United States was a major factor behind the growth in value. "This was an extremely pleasing result driven by the strength of the US economy," chief investment officer Ben Samild said. "Inflation has moderated and economic growth, trade, employment, wages and corporate balance sheets remain in good shape, underpinning another strong year for the US share market.
"These conditions provided lots of opportunities for active return generation and the Future Fund benefited from increasing its allocation to international equities." The fund greatly increased its exposure to US shares in 2024. Its holdings of foreign equities in developed markets - of which the majority are listed in the US - climbed from less than one-fifth to a quarter of its total asset allocation.
But the board was alive to the resurgence of geopolitical risks, Dr Arndt said. US stocks have had a volatile past month, hit by fears of Chinese AI company DeepSeek encroaching on US tech dominance and concerns over high valuations. Adding to the uncertainty has been the prospect of an impending trade war between the US Canada, Mexico and China, which could cause inflation to start rising again.
While Australian government representatives were confident of avoiding President Donald Trump's tariffs, they were concerned about the flow-on effects of lower free trade. "We've done very well in recent years with that trade and increasing our prosperity," Trade Minister Don Farrell told Sky News. "We think that the best way for the world to go forward is to maintain that open and free trading system.
And when I get the opportunity, as I hope to do very soon, to talk to my American counterpart, that's very much the message I will be giving the Americans." Mr Farrell flagged that the World Trade Organisation may have a role in the trade dispute between the US and its trading partners, as it did when Australia referred China's tariffs on imports such as beef, lobster and barley in recent years. The fund was also boosted by weakness of the Australian dollar, which increased the value of offshore assets.
In one of the biggest changes to the fund since its inception, the government in November updated its investment mandate to require it to consider investments in "national priorities", including renewable energy and housing. Advertisement Sign up for our newsletter to stay up to date. We care about the protection of your data.
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