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Australia Wealth Fund Increases Global Stock Holdings, Cuts Cash

  • Future Fund gained 8.8% last year, its best return since 2014
  • Move back to stocks helped fund capture global equity rally

Australia’s sovereign wealth fund increased its holdings of local and global equities last quarter, helping boost returns as stocks rallied.

The A$139 billion ($112 billion) Future Fund increased its allocation to developed market equities to 18.6 percent of assets in the three months ended Dec. 31, from 16.8 percent the previous quarter, it said in a statement Thursday. The fund cut its cash holdings by about A$2.6 billion in the quarter, to 16.4 percent of assets.

Equities Win

Australia's soverign wealth fund lifts equity holdings, cuts cash in December quarter

Source: Future Fund

The increased allocation to stocks comes after the fund had boosted its cash holdings in 2016 to almost 23 percent on fears central banks had less firepower to respond to weakness in the global economy. Equity markets reached record highs last year amid increasing optimism on global growth and a continued expansion in company profits.

The fund gained 8.8 percent last year, it’s best return since 2014. It has returned an average 8.1 percent a year over the past decade, beating its target of 6.8 percent.

More Money

Australia's sovereign wealth fund gained 8.8% last year, the best return since 2014

Source: Future Fund

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