Feb 01

A Simple Portfolio Analysis of the Future Fund

On Friday the Future Fund published its asset allocation as at 31 December 2009. Before we jump to any conclusions about its make-up its important to understand what the investment objectives are…

CPI plus 4.5% to 5.5%pa over a rolling ten year period with an acceptance of short term underperformance whilst the Strategic Asset Allocation is being developed

The asset allocation of the future fund as at 31 December 2009 is…

  • Australian Shares – 12.7%
  • Global Shares (developed) – 24.0%
  • Global Shares (emerging) – 3.6%
  • Private Equity – 2.3%
  • Property – 2.9%
  • Infrastructure – 2.4%
  • Debt Securities – 25.4%
  • Alternative Assets – 11.4%
  • Cash – 15.5%
  • plus Telstra

One can only assume that given the return benchmark, the allocation to cash will continue to diminish (it went from 32% to 15% in one quarter) and the ultimate fund will be relatively aggressive. What any investor can learn from this current asset allocation is the level of diversification across asset class…certainly high.

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