Future Fund refines response to ‘new investment order’

InvestorDaily

In 2021, the $285 billion fund released a position paper, titled A New Investment Order, where it identified 10 major paradigm shifts that will be important for building investment portfolios in the next decade. These included deglobalisation, technological disruption, climate change, a changed inflationary regime, and decline of sovereign bond duration in portfolio construction. Speaking at the Australian Wealth Management Summit in Sydney this month, the fund’s outgoing deputy chief investment officer, Alicia Gregory, said that the world anticipated in the Future Fund’s position paper over two years ago is now the reality it faces. This, she said, has led to a more dynamic approach in its portfolio construction.

“As large investors, we’re needing to make more portfolio decisions that can collectively move the dial under different scenarios,” Gregory said. She explained that in the current environment, responding to fundamental changes remains crucial because “what has worked in terms of portfolio construction over the last three decades might need to look different going forward”. The many tailwinds of the 2000s, including global labour and capital mobility, lower tax rates, and “extraordinary” monetary policy can’t be relied on any longer, Gregory said.

The rest of this article can be found at investordaily.com.au.