Our organisation invests for the benefit of future generations of Australians. Every dollar we make is a dollar that adds to Australia’s wealth and contributes to its future.
We do this by managing the investments of five special purpose public funds on behalf of the Australian Government.
No. We are an intergenerational sovereign wealth fund, not a superannuation fund. We don’t have any superannuation liabilities to manage and we don’t have any members making payments into the Future Fund or able to take money out.
Our role is to both grow and protect the assets of the Future Fund and the various other special purpose public funds for which we are responsible.
The Board of Guardians is responsible for deciding how to invest the assets of each fund, in line with the legislation and the investment mandates and independently of the Australian Government. The Board of Guardians receives recommendations and advice from the management team and reviews, approves and oversees the investment strategy.
There are a range of factors that contribute to our investment strategies, including the investment mandates, our investment beliefs and our investment policies. We strive to develop a thorough understanding of the investment environment and key drivers of portfolio risk and their potential impact on the portfolio.
Our investment approach is based on one investment team working together for the benefit of the portfolio as a whole. We call this our ‘one team, one portfolio’ strategy. We emphasise making sure that teams collaborate and bring together the appropriate expertise from across the organisation, responding nimbly and innovatively to investment opportunities.
The legislation and investment mandates do not set requirements regarding how much we invest in Australia. We are a global investor - we look for the best available investment opportunities around the world, and within Australia.
We invest the assets of each fund in line with their individual investment mandates.
Our base currency is Australian dollars which means investments in Australia can offer strong advantages to us. We have made a number of significant investments in Australia, including large infrastructure assets.
We build a diverse portfolio and invest in a broad range of categories including listed equities, private equity, infrastructure, property, debt, alternative assets, cash and portfolio overlays.
The only sectors or activities we won’t invest in are ones that are excluded from our portfolio under the Board’s policy. We have excluded entities on the basis of Australia’s international convention commitments or direct involvement in the manufacture of tobacco products.
Read more about how we invest and our environmental, social and governance risk management.
The assets of the Future Fund are owned by the Australian Government and exist to make provision for unfunded Commonwealth superannuation liabilities. By helping to meet these liabilities, the Future Fund will ease pressure on the Commonwealth budget.
From 1 July 2020 the Government is able to withdraw money from the Future Fund. In accordance with the Future Fund Act 2006 they may withdraw an amount up to the level of the unfunded public sector superannuation liabilities falling due in that year.
From 2020 the Australian Government can commence withdrawing money from the Future Fund to meet its unfunded superannuation liabilities.
Investment performance, how much money is taken each year to meet the liabilities and any additional flows into the Future Fund will influence how long the Fund lasts but it is expected to continue to operate in much the same way as today for many decades to come.
Sovereign wealth funds are special purpose investment funds that are owned by government.
Created for a diverse range of macroeconomic purposes, sovereign wealth funds hold, manage, or administer assets to achieve financial objectives, and employ a set of investment strategies which include investing in foreign financial assets.
We are a founding member of the International Forum of Sovereign Wealth Funds, a global network of sovereign wealth funds established to exchange views on issues of common interest and to facilitate an understanding of sovereign wealth funds' activities and of the Santiago Principles.
Our environmental, social and governance risk management policy provides a framework which helps us to determine what entities and sectors are excluded from the investment portfolio for non-financial reasons.
In line with this, we have excluded entities on the basis of Australia’s international convention commitments or direct involvement in the manufacture of tobacco products.
Members are selected for their expertise in investing in financial assets, managing investments and corporate governance and are appointed for terms of up to five years.
Different investors take different approaches to integrating ESG risks and opportunities into their investment programs. The breadth of approaches reflects the variety of the governance arrangements, objectives and investment strategies pursued by investors.
Our starting point is our mandated objective to maximise returns earned on our investment portfolio while appropriately managing risk. We combine this with our belief that the effective management of ESG factors, including climate change, can contribute to the long term risk adjusted returns of our portfolio.
We integrate ESG factors into our process for selecting external investment managers responsible for individual investment decisions. We also exercise the ownership rights associated with our investments according to our corporate governance voting principles. We also engage with key investee entities, either directly or in partnership with our investment managers, to promote enhanced ESG performance and establish a climate of long term asset stewardship.
As we assess investments for which climate change could pose a material risk to investment performance, we incorporate these risks into the investment valuation process. This process ensures that risks and opportunities associated with climate change are evaluated in the same fashion as all other relevant risk considerations.