Australia's sovereign wealth manager, the Future Fund, on Wednesday reported a negative return of 0.9% for the latest financial year due to the coronavirus pandemic.
Much of Australia went into lockdown in the early months of this year, wreaking havoc on the economy. Official data due out on Wednesday is expected to show the country has entered its first recession in three decades.
"The second half of FY20 was dominated by the COVID-19 pandemic and the lockdown of much of the Australian economy by governments in response," Future Fund Chairman Peter Costello said.
"The downturn was fast and steep."
The A$161 billion ($118.69 billion) fund has achieved a return of 9.2% per year over the last 10 years, exceeding its benchmark of 6.1%.
The Future Fund was set up in 2006 with contributions of A$60.5 billion from government surpluses and proceeds of the privatisation of telecommunications operator Telstra Corp Ltd <TLS.AX>.
Since then, it has added over A$100 billion in earnings.
Costello said the board was focused on positioning itself for a "challenging and volatile" environment ahead.
"The factors that have fuelled strong performance in the past may not be there any longer. We will need to be ever more strategic in how we pursue long-term returns in the future," Costello said.
($1 = 1.3565 Australian dollars)
(Reporting by Renju Jose; Editing by Stephen Coates)
