Australia’s sovereign wealth fund grows on risk asset rally; cautious about rate cuts By Reuters

By Lewis Jackson

SYDNEY (Reuters) – Performance at Australia’s sovereign wealth fund rebounded in the final quarter of 2023 buoyed by the rally in global equity markets, results published on Tuesday showed.

The A$212 billion ($139 billion) Future Fund, which returned 8% in the year ended Dec. 31, also cautioned against expecting aggressive rate cuts from the Reserve Bank of Australia this year.

The Future Fund narrowly missed its target return of 8.4%. In the December quarter it returned 3.2% versus a target of 1.9%.

Chair Peter Costello, who retires in February, said while there were signs inflation in Australia was beginning to moderate, there remained a long way to go to get prices back into the central bank’s target band.

“Although inflation has fallen from its peak, it is still well outside the target range of 2% to 3%,” Costello said in a statement.

“Whilst markets rebounded on an expectation that rates could be lower this year, there is still a way to go.”

($1 = 1.5223 Australian dollars)

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