CIO’s Report
Newly appointed Future Fund Chief Investment Officer, Ben Samild, discusses the FY23 investment landscape and the changes the Future Fund made to its portfolio to protect it and make it more resilient in a low-returns, high-inflation world.
Hi, I’m Ben Samild, Chief Investment Officer of the Future Fund. 2023 was a fascinating, tumultuous, I guess, interesting, challenging year. Most of them are - I haven’t lived through many that haven’t felt that way. We had ongoing rises in interest rates. We had certain geostrategic trends that became more embedded. All of these were largely predictable and I guess part of the sort of broader change in the investment landscape that the Future Fund has been talking about.
The performance of the funds across FY23 was positive. That was a relief coming off the back of FY22, where performance was really challenged. In nominal terms, the performance of the funds reflects a better environment for risk assets where the tailwinds of falling inflation and interest rates that have stopped climbing quite so quickly were a real support to risk assets.
I think the biggest achievement for our investment team [over the year] is really their flexibility. What we’ve asked them to do is expand their minds, expand their horizons, think about a world that looks different to the one they’ve lived through, and then think about how to invest into that world. That really requires a lot of trust, a lot of mental flexibility, and then a lot of creativity in thinking about how to best position the portfolio through their specialisation into that world.
Over the last several years, we’ve done a lot of investing. We’ve really changed the portfolio quite considerably to meet the environment that we expected to be moving into. As we’ve done that, a fairly revolutionary approach has turned more to evolution. As we get more confirmation of the external environment - and that is the one that we more-or-less laid out several years ago - we just continue to evolve the portfolio towards that environment. Because most of the hard work has been done, the biggest priority is to continue in this journey of evolving the portfolio to be more resilient to the future potential pathways of the investment environment.
It includes getting our talent right. It includes getting our development right. It includes getting our decision-making right. We aim to just improve every day and be slightly better at it than we were yesterday.
