The Future Fund Sees Value in Tech Giants

We may be small in number. But Aussie savings dwarf others by far.

Thanks to forced superannuation, we have a pension pool of more than $2.3 trillion.  According to Wills Tower Watson’s 2017 Global Pension Assets Study, it’s the fourth largest pension pool by assets in the world.

Where are Your Savings Invested?

It’s slim pickings out there.

The ASX 200 is up a measly 4.6%, bond yields of 2% to 3% aren’t inspiring either.

ASX 200

Source: Google Finance

One place for pension funds is to go international. Our sovereign wealth fund, The Future Fund is leading the charge, topping up their Apple, Inc. [NASDAQ:APPL] holdings.  As reported by the Australian Financial Review (AFR):

The Future Fund’s position in Apple has tripled over the 2017 financial year according to its annual disclosures, swelling to $357 million to become its eight-biggest equity holding from 86th in the space of 12 months.

Over the same period, Apple’s stock rose more than 54%. The AFR continues:

The $134.5 billion investor releases its top 100 holdings as of June 30 each year. The iPhone maker was one of the biggest movers in the portfolio in 2016-17, as was a position in GGP, the former General Growth Properties, which finished the year in seventh position having not made the list in 2015-16 because it was held through a different structure.

Banks still dominate the pecking order, accounting for the top four exposures in the latest snapshot and valued collectively at more than $2 billion. In the year ruled off, National Australia Bank unseated Telstra (which fell to ninth position) to take the fourth spot behind Commonwealth Bank of Australia, Westpac Banking Corp, and ANZ Banking Group.

The top 20 is rounded out by global giants including Samsung Electronics (ranked 10 from 19 last year) and Visa (ranked 13 from 12).

The latter two have also appreciated more than 69% and 24%, over the 2017 financial year.

stock market

Source: Google Finance

Comforting to know that Australia’s funds are being invested intelligently, isn’t it?

Cheers,

Härje Ronngard,

Junior Analyst, Markets & Money

PS: While there are still opportunities to be had, many stocks are simply overvalued. Award–winning financial advisor, Vern Gowdie believes there are five fatal stocks that you should sell now. Find out if you’re holding one of these ticking time bombs in your portfolio by clicking here.


Harje Ronngard is a Junior Analyst at Markets and Money. With an academic background in finance and investments, Harje knows how simple, yet difficult investing can be. He has worked with a range of assets classes, from futures to equities. But he’s found his niche in equity valuation. It’s not good enough to be right on average when it comes to investing. The market is volatile and it only takes one bad day to ruin your portfolio. You don’t want to end up like the six foot man that drowned in the river that was five foot deep on average. It’s why Harje is constantly reminding investors of their downside risk here at Markets and Money. He does so by simply asking just two questions.  What is it worth? And how much does it cost? These two questions alone open up a world of investment opportunities which Harje shares with Markets and Money readers. Right now Harje is focused on managing research and investments over at the Legacy Portfolio. An investment publication designed to significantly grow investor’s wealth over time with deeply undervalued businesses. Harje also contributes his insights in Total Income, headed by income specialist Matt Hibbard. Harje loves cash-rich businesses, so he feels right at home amongst Matt’s high yielding income plays.


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