REST Pension Core Strategy Returns 8.67% in Fiscal 2024

Australia’s REST pension fund, which provides retirement benefits for more than 1.9 million members, announced an 8.67% return in its core strategy portfolio, as of June 30. The fund manages more than A$80 billion ($53.81 billion) in assets.

The fund’s core strategy aims to strike a balance between risk and return by investing in growth and defensive assets. The fund allocates 35% of its portfolio to global equities, 23.5% to domestic Australian equities, 14% to debt, 11% to infrastructure, 10% to property, 4.5% to cash and only 2% to other alternative investments.

Global equities were the fund’s best-performing assets, which REST attributed to U.S. tech stocks, boosted by an artificial intelligence rally. These assets returned 16.1% during the fiscal year, with the fund noting it owned approximately A$1 billion each in Nvidia Corp., Apple Inc. and Microsoft Corp.

Over the past year, the fund has increasingly allocated its portfolio to global equities. REST noted in an investment update that it believes the Magnificent Seven U.S.-listed technology companies will offer real value to its portfolio in the long term, citing increasing demand for these companies’ products.

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“The market generally expects artificial intelligence to improve productivity, not only for the tech companies, but for the broader economy,” stated the pension fund’s report. “Their performance so far tends to show that the decision to invest in AI is a sound one.”

Domestic Australian equities returned 10.6% in the same time period, led primarily by the technology and financial services sectors. The fund’s worst-performing sector, unlisted property, lost 9.6%, a result of its high sensitivity to interest rates.

Over the past three, five, seven and 10 years, the fund has returned 5.05%, 6.14%, 6.48% and 6.75%, respectively.