The investment strategies of institutions like the Future Fund offer advisers a useful lens on asset allocation.

Global equities remain the largest allocation of some of Australia’s biggest investors – including its sovereign wealth funds and large superannuation funds – due to their sheer size and bespoke asset allocation.

The Future Fund’s latest portfolio update shows 29.1% of its assets were allocated to global developed market equities at 30 June, with another 4.6% in emerging market shares. By comparison, 10.5% of its assets were in Australian equities.

• Strong global equity markets, notably in Japan and emerging markets, underpinned its annual 14.8% return. Increased volatility due to a fractured geopolitical environment drove gains from its active equity and alternative exposures too.
• “Relatively modest levels of equity risk, meaningful exposure to private market assets and highly diversified exposure to the AI thematic aim to provide robustness across different market scenarios,” Future Fund Chief Investment Officer, Richard Brandweiner says.
• Its overall asset allocation reflects the Future Fund’s view that a 'New Investment Order' driven by 10 overarching factors – including deglobalisation, populism and technological disruption – means the conventional wisdom that guided institutional investors requires a rethink.
• Its biggest holdings outside global equities at June 30 were alternatives (14.9%), private equity (12.1%), infrastructure and timberland (11.5%) and credit (8.1%). 

Table 1: Future Fund Asset Allocation – YoY comparison

	Asset class	FY 2025 (% of Fund)	FY 2026 (% of Fund)	Share movement YoY (pp)
	Australian equities	10.8%	10.5%	-0.3
	Global equities - Developed markets	25.8%	29.1%	+3.3
	Global equities - Emerging markets	5.7%	4.6%	-1.1
	Private equity	13.3%	12.1%	-1.2
	Property	4.4%	3.8%	-0.6
	Infrastructure & Timberland	11.4%	11.5%	+0.1
	Credit	8.9%	8.1%	-0.8
	Alternatives	14.7%	14.9%	+0.2
	Cash	5.1%	5.4%	+0.3
	Total	100.0%	100.0%	0.0%

 

Source: Future Fund Portfolio Update June 2026*

Super moves

Some big super funds also have more in offshore equities than local shares. AustralianSuper’s default option, for example, held 32.7% of its assets in global shares at 30 June versus 24.5% in Australian stocks. 

• Meanwhile, UniSuper’s default option had a strategic asset allocation of 35% to international shares at 27 March versus 27% to Australian shares. Cash and fixed interest made up another 23%.
• “Four out of the last five years, 11 out of the last 13 years – our Australian shares option has underperformed the international chares option,” UniSuper Chief Investment Officer John Pearce told members in a July update.
• Pearce didn’t, though, discount the role of Australian shares in a balanced portfolio, emphasising that while the local market may not be as exciting, it has held its own over the longer term and is a higher yielding market that may prove more resilient in a big correction.

Why it matters

Growing allocations to international equities among major investment institutions highlight the role global markets can play in providing access to a broader range of sectors, industries and companies. This includes areas that are less represented in Australia, such as AI-related technology, which has attracted significant investor attention in recent years.

 

Stay up to date with the latest insights - sign up to the monthly AXIS email newsletter.

* www.futurefund.gov.au/en/investment/investment-performance/portfolio-updates