SYDNEY, Jan. 31 (Xinhua) -- The sovereign wealth fund of Australia, the Future Fund, reported Tuesday it beat its year end targets, even amidst global volatility in the financial markets.
The fund, chaired by former Federal Treasurer Peter Costello, achieved a 7.8 percent return over the past 12 months, beating its mandate of 4.5 to 5.5 percent above inflation, which currently sits at 1.5 percent.
Costello was pleased with the result, after being concerned back in December that it would be a "formidable" challenge to meet the mandated return targets.
"We maintain our long-held view that we see a challenging investment environment ahead with elevated risks and lower prospective returns than in previous years," Costello said Tuesday.
But Costello was quick to point out the lower yield than the five year average of 11.4 percent, was due to the prudent management style adopted, in order to maintain a risk-averse strategy.
"While global equity markets have strengthened over recent months, uncertainty regarding global monetary policy and a range of geopolitical factors remains," Costello said.
"With our long term objective front of mind, the board exercises patience and diligence in investing the assets of the fund, ensuring we do not expose the portfolio to undue risks for the sake of short term gains."
A number of events played havoc with the financial markets over the course of the past year, with the Brexit vote, and the electing of new President Donald Trump to the White House, adding to an already uncertain global financial climate.
The Future Fund manages an extensive portfolio of government funds, totalling 145 billion Australian dollars, intended to guarantee the superannuation of public service employees from 2020. (1 Australian dollar equals to 0.76 U.S. dollars)
