Future Fund shows negative growth

The fund has over 56% of its assets in cash, which delivered positive returns, and two billion shares in Telstra, which delivered a 3.23% return over the quarter, but are in escrow until 20 November and therefore not included in the overall results.

David Murray, chair of the Future Fund board of Guardians, said the poor overall performance, below the long term required level of Consumer Price Index plus 4.5% was a direct result of the global economic turmoil.

He commented: "The global scale of the current financial situation presents a formidable challenge to all investors. It appears to be a once in a century occurrence particularly affecting shares in financial institutions which normally make up around of quarter of market value in global equity markets."

The Future Fund said the number of global government bailouts, forced mergers of financial institutions, growing belief in a worldwide economic slowdown, were indicative of the difficult operating environment.

Murray added: "As a long term investor holding liquid assets, we are well placed to deal with this environment and take opportunities as they arise. Given the very difficult investment conditions, we continue to take a carefully considered approach to building the portfolio."

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