Future Fund - Wonder how it is going?

[son of baglimit]

is anyone able to obtain information on the current make up of that glorious public service pension fund called the future fund ?

i wonder how those overpaid fund managers are handling the mega billions they have to play with.

maybe they can step in and support all the penny dreadfuls that are dying a quick death. or maybe buy the stocks which have political friends in charge.

thanks in advance.

 

[korrupt_1]

i heard from a friend who is a member of the australian stock report that one article very briefly mentioned that a sizeable amount of fund has been invested around 6350 level. anyone confirm this?

 

[Trembling Hand]

I was going to start a thread today about this but you bet me to it.

Last year I mentioned on the XAO thread that it would have to be the biggest indicator of a top in the market when bureaucrats set up a share fund.

Of course I was dumbed on by all the blind Bulls. From my blog on 22nd Of August,

This Bull has convinced so many people its going to last forever that even the Bureaucrats are now in on it. Think about that because it makes me deeply worried. I personally have little faith in Peter Costello and his bean counters timing this thing at anything other than the top of the market.

Yes I know it is run by smart people. But since when does the government time anything other than when the bull has already bolted. (Pun definitely intended)

Just like the tops in the market pull in the last of the retail investors this could be just another one (it is your money=Tax)

 

[sptrawler]

https://www.theage.com.au/business/...ahead-for-global-markets-20190828-p52llk.html
It looks as though the future fund is still doing o.k. But warns headwinds ahead.

From the article:
The fund has now earned more than $100 billion in returns since its inception in May 2006, while its annualised return of 10.4 per cent has exceeded its target return of 6.5 per cent .

Future Fund chairman Peter Costello has warned the $162 billion fund's stellar annual returns may be harder to replicate as the world economy slows and interest rates slump to historic low .

 

[JohnDe]

Looks like the Albanese labor government are planning to spend some of the Future Fund.

Costello once said: “The Future Fund can only be spent once. Then it’s gone.”​

There is a real danger that the independent Future Fund, which was set up to invest its returns and have its earnings boost the budget bottom line, will morph into a directed investment scheme like the Clean Energy Finance Corporation, which already exists to help renewable energy.​

Treasurer eyes a once-in-a-century pot of taxpayer gold

Jim Chalmers is making a fundamental change to Australia’s once-in-a-century “independent” sovereign Future Fund, to provide investment “priorities” where there were none – priorities that align with Labor’s political and ideological agenda.

The Treasurer has been cautious in the way the changes to the $230bn fund are to be made but there is no getting around the fact establishing new priorities that must be considered – including the transition to a net-zero economy and residential housing – will change the way the fund operates.

There is a real danger that the independent Future Fund, which was set up to invest its returns and have its earnings boost the budget bottom line, will morph into a directed investment scheme like the Clean Energy Finance Corporation, which already exists to help renewable energy.

As Peter Costello – the man who made the Future Fund possible as treasurer in the Howard government and who chaired it successfully for so long after retiring from parliament – has said: politicians must be kept away from the investment strategy and locked out of the cash box.

Costello once said: “The Future Fund can only be spent once. Then it’s gone.”

Chalmers is not suggesting any immediate draw down from the $230bn or even until it reaches $380bn by 2032-33, but when new priorities, new parameters for investment, are imposed, they change the dynamics.

This is the danger of introducing priorities that alter the “independence” of the fund’s management.

The new priorities for investment are: increasing residential housing; supporting energy transition to net zero and; improving infrastructure.

Since 2006, the Future Fund has lifted from $60bn to its current balance and will be more than six times larger than it started by 2032-33.

There is no sign of a lack of performance or low earnings to prompt any change.

Yet, the Albanese government is going to impose priorities for its favoured concerns where there are already specified, directed agencies, including the Clean Energy Finance Corporation, the National Reconstruction Fund and Housing Australia.

This sounds like Chalmers pushing for a more caring economy using the fruit of Costello’s surpluses.

 

[Sean K]

Looks like the Albanese labor government are planning to spend some of the Future Fund.

Costello once said: “The Future Fund can only be spent once. Then it’s gone.”​

There is a real danger that the independent Future Fund, which was set up to invest its returns and have its earnings boost the budget bottom line, will morph into a directed investment scheme like the Clean Energy Finance Corporation, which already exists to help renewable energy.​

I thought it was independent of the government in some way and it couldn't be directed to invest in anything.

Renewables? The only way they're making money is by government subsidies. The government investing in the government. LOL

 

[divs4ever]

Looks like the Albanese labor government are planning to spend some of the Future Fund.

Costello once said: “The Future Fund can only be spent once. Then it’s gone.”​

There is a real danger that the independent Future Fund, which was set up to invest its returns and have its earnings boost the budget bottom line, will morph into a directed investment scheme like the Clean Energy Finance Corporation, which already exists to help renewable energy.​

so .. who is now concerned about their own super funds .. if the Government will plunder it's own nest-egg .. how safe is YOUR nest-egg

 

[divs4ever]

I thought it was independent of the government in some way and it couldn't be directed to invest in anything.

Renewables? The only way they're making money is by government subsidies. The government investing in the government. LOL

View attachment 188270

white man speak with fork-tongue ' my Cherokee uncle would say .. and 'never get between a politician and a pot of money ( told to me by the State member at the time

i hope those government employees repay the trust their elected masters have bestowed on them

 

[Bellcose]

The Future Fund was already having an expanded role before the current announcement. Chill.

https://www.futurefund.gov.au/

 

[divs4ever]

The Future Fund was already having an expanded role before the current announcement. Chill.

that would worry me MORE if i was a beneficiary

if i want to feel good about myself , i would donate/invest directly

given the general trend of governments to 'empire-build ( grow dis-proportionally to the population ) and the fund is NOT seeking maximum returns on investments ( at least not fiscally )

i think Paul Keating would call it 'mission creep'

 

[JohnDe]

The Future Fund was already having an expanded role before the current announcement. Chill.

View attachment 188273

https://www.futurefund.gov.au/

The worry, that many are feeling, is that the government appears to be changing the rules to allow them a say on how the Future Fund invests, which will affect the independence. This is a conflict-of-interest issue.

Governance and accountability

Legislation establishes the independence of the Board and ensures that investment decisions and activities are conducted at arm’s length from government.​

https://www.futurefund.gov.au/en/About-us/Legislation-and-governance

 

[Bellcose]

@JohnDe I do understand what your concern is and it's reasonable one in my opinion.

One thing which may not be realised is that while the Future Fund has independence on investment decisions and activities, that does not prevent the Government of the day deciding the fund has an additional mandate. It can achieve that via legislation, for example, the Housing Australia Future Fund Act. Governments have had that ability under the Australian Constitution which provides for Parliament enacting laws.

 

[JohnDe]

@JohnDe I do understand what your concern is and it's reasonable one in my opinion.

One thing which may not be realised is that while the Future Fund has independence on investment decisions and activities, that does not prevent the Government of the day deciding the fund has an additional mandate. It can achieve that via legislation, for example, the Housing Australia Future Fund Act. Governments have had that ability under the Australian Constitution which provides for Parliament enacting laws.

And that is why taxpayers have a legitimate reason to question a governments reasoning for changing something that has specific legislation - Governance and accountability Legislation establishes the independence of the Board and ensures that investment decisions and activities are conducted at arm’s length from government.

 

[Bellcose]

And that is why taxpayers have a legitimate reason to question a governments reasoning for changing something that has specific legislation - Governance and accountability Legislation establishes the independence of the Board and ensures that investment decisions and activities are conducted at arm’s length from government.

I probably didn't make myself clear. Once Parliament passes legislation for the Future Fund to undertake a particular role it is then at arms length in regard to the Fund's investment decisions and activities. Legislation has to pass both houses of Parliament and possibly amended before it is passed. Many amendments have happened to Draft legislation and legislation is accompanied by extensive Explanatory Memoranda providing the reasoning and operation of the legislation. There really is nothing unusual or out of order in the Government's proposal.

 

[houtman]

I thought it was independent of the government in some way and it couldn't be directed to invest in anything.

Renewables? The only way they're making money is by government subsidies. The government investing in the government. LOL

Excerpts from our ABC-

- The new ministerial directive will reiterate that the Future Fund's primary objective is to maximise returns, and it will still be required to earn 4 to 5 percentage points above inflation each year on average

- The average annual return over the past decade has been a high 8.3 per cent. As usual, no clarity with this figure in relation to the previous point, it is 8.3% but inflation adjusted only 1.4% above target.

In fact it has missed its target over the 3 and 5 yr time frames.


I doubt many are surprised by this action.

Personally agree with Costello - "Once we lose our focus, which is: we're here to get a financial return, and we start giving ourselves over to pork barrelling, that's when you've lost it."

 

[JohnDe]

I probably didn't make myself clear. Once Parliament passes legislation for the Future Fund to undertake a particular role it is then at arms length in regard to the Fund's investment decisions and activities. Legislation has to pass both houses of Parliament and possibly amended before it is passed. Many amendments have happened to Draft legislation and legislation is accompanied by extensive Explanatory Memoranda providing the reasoning and operation of the legislation. There really is nothing unusual or out of order in the Government's proposal.

Yes, I understand that. And governments continue to make changes to the legislation -

The core statutory governance arrangements for the funds we manage are set out in the following legislation:

• Future Fund - Future Fund Act 2006
• Medical Research Future Fund - Medical Research Future Fund Act 2015
• Aboriginal and Torres Strait Islander Land and Sea Future Fund - Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018
• DisabilityCare Australia Fund - DisabilityCare Australia Fund Act 2013
• Future Drought Fund - Future Drought Fund Act 2019
• Disaster Ready Fund - Emergency Response Fund Amendment (Disaster Ready Fund) Act 2022
• Housing Australia Future Fund - Housing Australia Future Fund Act 2023

 

[houtman]

Yes, I understand that. And governments continue to make changes to the legislation -

The core statutory governance arrangements for the funds we manage are set out in the following legislation:

• Future Fund - Future Fund Act 2006
• Medical Research Future Fund - Medical Research Future Fund Act 2015
• Aboriginal and Torres Strait Islander Land and Sea Future Fund - Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018
• DisabilityCare Australia Fund - DisabilityCare Australia Fund Act 2013
• Future Drought Fund - Future Drought Fund Act 2019
• Disaster Ready Fund - Emergency Response Fund Amendment (Disaster Ready Fund) Act 2022
• Housing Australia Future Fund - Housing Australia Future Fund Act 2023

Yep, and all those new legislated funds are reported alongside but separate from the Future fund.

https://www.futurefund.gov.au/-/media/3F8D35D317D546588C1551F1EF9BB37A.ashx

It doesn't look like this new directive will be, so potentially hidden outcomes.

 

[JohnDe]

Yep, and all those new legislated funds are reported alongside but separate from the Future fund.

https://www.futurefund.gov.au/-/media/3F8D35D317D546588C1551F1EF9BB37A.ashx

It doesn't look like this new directive will be, so potentially hidden outcomes.

Yep, and each time the revenue that should be allocated to the Future Fund is diluted by government wanting a feel good policy to shore up votes for an election.

The Board will hold Fund investments in its own name on behalf of the Commonwealth – illustrating that the Board will take investment decisions independent of the Commonwealth but with the Commonwealth retaining beneficial ownership of the Fund at all times.

Financial impact ​

2.9 The Government’s policy is to make contributions to the Fund after it has met all other spending commitments. That is, the Fund ‘stands in line’ behind the Government’s other expenditure priorities. ​

​

2.10 Transfers to the Fund will not impact on the budget bottom line since the Government is merely exchanging one form of financial assets (cash and possibly Telstra shares) for another (such as domestic and overseas equities). ​

 

[divs4ever]

Excerpts from our ABC-

- The new ministerial directive will reiterate that the Future Fund's primary objective is to maximise returns, and it will still be required to earn 4 to 5 percentage points above inflation each year on average

- The average annual return over the past decade has been a high 8.3 per cent. As usual, no clarity with this figure in relation to the previous point, it is 8.3% but inflation adjusted only 1.4% above target.

In fact it has missed its target over the 3 and 5 yr time frames.

View attachment 188276
I doubt many are surprised by this action.

Personally agree with Costello - "Once we lose our focus, which is: we're here to get a financial return, and we start giving ourselves over to pork barrelling, that's when you've lost it."

yes , i have a very short history of agreeing with Costello , but here we agree ,

however 'lost it ' might have already happened

BTW was that above real inflation or ' official inflation '.