The Future Fund delivered a 14.8 per cent one-year return to June 30, 2026, attributing the return to a combination of exposure to commodities, geographic diversification, an increased focus on active management and low exposure to bonds.

Fronting the results for the first time since taking the chief investment officer role, Richard Brandweiner highlighted strong returns in global equities, particularly in Japan and emerging markets. Still, its emerging markets equities exposure is sitting at a five-year low (4.6 per cent) while developed markets equities exposure almost doubled over the five years (29.1 per cent).

Some global allocators have recently questioned the true efficacy of emerging markets as a diversifier to developed markets in the portfolio, as the EM indexes become increasingly concentrated and AI and semiconductor stocks dictate market movements.

But Brandweiner said more concentration can spell alpha opportunities for prudent investors.

“The concentration in the index and the increased volatility and geopolitical risk that we’re seeing evolve can lead to increased dispersion and, therefore, quite strong alpha opportunities. We do take active risk in emerging markets, and we’ve seen that perform very strongly over the past 12 months,” he said.

“When you look at the sector more broadly, it’s trading at very compelling valuations with very strong earnings growth.

“Exposures to emerging markets, exposure to [countries] like Japan, I think it’s very important for us, given that it’s quite clear that we’re not through the significant geopolitical volatility and outlook volatility in terms of momentum.”

In other parts of the portfolio, private equity exposure also hit a five-year low at 12.1 per cent at the end of June; infrastructure and timberland rose slightly over the five years to 11.5 per cent; and property exposure fell to a five-year low at 3.8 per cent.

“We’ve been talking for some years about an increase in competition for capital to fund increasing capital demands right across decarbonisation, defence infrastructure, broader infrastructure [and] supply chain reorientation, and more recently AI build-out,” added chief executive Raphael Arndt.

“We’ve got conditions right across the portfolio that have worked, and all of that has contributed to the return.

“We don’t know what would happen, but we know that we’ve got the levers to respond as we need to.”