Australia's sovereign wealth fund warns of prolonged inflation

Australia's Future Fund, the country's sovereign wealth fund, expects inflation and bond yields to remain elevated for an extended period amid global market volatility and trade tensions.

The fund reported a 7.9% return for the year through March, down from 12.2% the previous year, with its total assets valued at 240.8 billion Australian dollars ($156 billion).

CEO Raphael Arndt attributed the cautious outlook to consequential changes in geopolitical and economic environments, sparking uncertainty. Despite the challenging backdrop, Chief Investment Officer Ben Samild noted strong performance from credit, infrastructure, and commodities investments. 

As of March, about one-third of the fund’s portfolio was allocated to global equities. Since its 2006 inception, the fund has averaged 7.8% annual returns, with a five-year average of 8.3%.