Australia’s $250bn sovereign wealth fund has secured huge returns on investment in weapons and defence companies in less than two years, despite long-running criticism of its support for the industry.
The value of shares held in eight companies increased by $76m between October 2023 and June 2025 amid wars in the Middle East and Ukraine and the sharpest increase in military spending since the cold war.
The fund’s investments in Israel’s largest private defence contractor, Elbit, which is a major supplier to the Israeli Defense Force (IDF), increased from $489,000 to $2.69m as of 30 June, according to the fund’s latest disclosures.
Elbit Systems describes itself as the “backbone” of the IDF’s drone fleet, which has been used extensively in the assault on Gaza. Its portfolio also includes systems for command and control, military aircraft and helicopters, armed remote control boats, and land vehicles.
The value of the fund’s holdings in Lockheed Martin, a US headquartered company that produces the F-35 joint strike fighter, increased by 23% from $71m to $88m.
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The company’s fighter jets have been bought by Israel and used in the conflict in Gaza. The contribution of more than 75 Australian companies to the global F-35 supply chain has led to calls for the Albanese government to pause exports.
A list of 30 “defence companies” the fund invested in, as of October 2023, included Thales, BAE Systems, Northrop Grumman, Rheinmetall, Boeing and Rolls-Royce.
The value of the Future Fund’s shares in Rolls-Royce, which is a defence contractor and the supplier of the propulsion system for the Aukus submarine partnership in addition to civil technology, increased by 268% from $2m to $5.5m.
The company’s share price has surged thanks to increased demand for civil engines since the start of the pandemic, in addition to rising defence procurement. Boeing has experienced similar demand for civilian projects.
The Future Fund maintains a list of companies it is excluded from investing in. This list includes 11 companies that are blacklisted in accordance with “weapons-related conventions or treaties ratified by Australia”.
Among this list is the Italian company Leonardo SpA, which has been excluded from several major funds due to its “involvement in the production of nuclear weapons”. In October 2023, the Future Fund had shares worth $563,739.88 with the company.
Greens senator David Shoebridge, who obtained the October 2023 list through a freedom of information application, criticised the Future Fund’s investment in Elbit given the Israeli military’s conduct in Gaza.
“Public pressure saw the Future Fund stop investing in tobacco so we know they can set ethical standards if pushed,” Shoebridge said. “They are just choosing not to.
“There needs to be a fresh ethical approach to public investment that draws a firm red line across investing in the global harm industry.”
Lara Khider, the acting executive director of the Australian Centre for International Justice, called on the Future Fund to reconsider its investments. She cited the international court of justice’s advisory opinion that Israel’s occupation of the Palestinian territories violated international law and amounted to apartheid.
“When public funds such as those managed by the Future Fund are invested in companies credibly linked to serious human rights violations or international crimes in Gaza, Austraila risks breaching its international obligations,” Khider said.
A Future Fund spokesperson said the fund invested “through external managers and our exposure to publicly listed defence companies is guided by investment indices that are widely used by investors in Australia and around the world”.
“Our portfolio exclusions for defence companies are based on controversial weapons-related conventions or treaties ratified by Australia and apply to cluster munitions, anti-personnel mines, chemical or biological weapons and some nuclear weapons,” they said.
The Future Fund reached $250bn in value for the first time last financial year after reporting a 12.1% return, which was twice its target. Its main fund pays for the superannuation liabilities of public servants, but it also manages a number of other, smaller pots of money.
That includes the Housing Australia Future Fund, which grew to $10.9bn as at mid-2025.
Jim Chalmers late last year changed the fund’s investment mandate to force it to “consider Australia’s national priorities”, including boosting housing supply, getting more infrastructure built and supporting the net zero transformation.
Elbit was contacted for comment.
