19 December 2022 | Macroeconomics

Australia's $130 billion welfare fund bets on keeping inflation steady

According to Australia's sovereign welfare fund, gold and other goods compensate for decreasing yields by asset classes, so it's preparing for continued inflationary pressures around the world.

According to Future Fund Chief Executive Officer Raphael Arndt, it has made its first foray into the broader sector of primary commodities this year. For that reason, "a few percent" of the firm's assets amounting to 193 billion Australian dollars ($130 billion) are now invested in gold. He said that the breakdown of the traditional 60-40 portfolio allocation between stocks and bonds comes from rising interest rates in the fight against inflation and from war and de-globalization.

In an interview on Friday, Arndt expressed a desire to find protection against inflation. He added that buying gold, along with commodities, happened for the first time. This diversifies risks.

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