Australia's sovereign wealth fund tops $166 billion, reduces US portfolio

Core Insights - Australia's Future Fund has reached a valuation of A$252 billion ($166.22 billion) and has reduced its U.S. market exposure to increase investments in Germany and Japan [1][2] Investment Performance - The Future Fund achieved a return of 12.2% for the year ending June 30, significantly exceeding its government-mandated target of 6.1% [1] Portfolio Composition - As of the June quarter, A$65.13 billion is invested in developed markets, representing 25% of the total investments, an increase from A$46.83 billion in the same period in 2024 [2] - Australian equity investments rose to A$27.2 billion from A$23.1 billion [2] Strategic Adjustments - The U.S. remains the largest international investment area, but volatility and political uncertainty have led to a reduction in exposure [3][4] - The Future Fund is focusing on continental Europe, particularly Germany, due to government initiatives aimed at economic stimulation [4] - Investments in Japan have also been increased as these markets appear cheaper compared to U.S. or Australian equities [5] Asset Allocation Changes - The property investment portfolio decreased from A$12 billion to A$11.1 billion, while credit investments fell from A$24.82 billion to A$22.4 billion [5] - The fund has increased its exposure to developed market currencies and commodities, including gold [5]