The Future Fund oversaw a 14.8 per cent return to $289.7 billion in the 12 months to June, easily beating the 2.8 per cent gain in the ASX200 over the same period and the fund's one-year target of eight per cent.
As the fund announced the result on Wednesday, it revealed chief executive Raphael Arndt would depart at the end of 2026 after almost two decades.
"I am proud to have served as CEO of the Future Fund," said Dr Arndt, who will move into the private sector.
"The fund is an important Australian institution, and I am confident it will continue to play a vital role for decades to come. All Australians are better off as a result."
In his six years as chief executive, Dr Arndt has overseen a $205 billion increase in total funds under management to $356 billion.
"Raff has been an outstanding leader of the Future Fund during his tenure as CEO and for many years prior to that in a range of other roles," chair Greg Combet said.
"Australia is better off for his contribution to the Future Fund.Â
"He leaves the fund well-positioned to continue strong investment performance in the future."
The fund was well advanced in its recruitment process and will conduct a global search for an Australian candidate to replace Dr Arndt, Mr Combet said.
He said the 2025/26 result was one of the strongest in the fund's history, achieved in a "challenging global environment marked by geopolitical uncertainty and market volatility".
"This result has also been achieved while investing in national priority sectors with the board having now committed around $3.5 billion of new investment into domestic housing, infrastructure and the energy transition," he said.
"We have successfully laid a foundation for the fund to endure to strengthen Australia's financial position beyond the payment of the liabilities for which it was established."
Following a 12.2 per cent return the prior year, the Future Fund has continued its recent run of strong performance since adopting its new investment order in 2021.
"Exposure to commodities, geographic diversification, an increased focus on active management and low exposure to bonds all contributed to returns," Dr Arndt said.
Chief investment officer Richard Brandweiner said the investment order had prompted improved diversification, increased inflationary protection and selective exposure to active management.
"Very strong global equity markets, notably in Japan and EM, underpinned returns, however increased volatility as a result of a more fractured geopolitical environment saw very positive outcomes in our active equity and alternative exposures to," he said.
"Relatively modest levels of equity risk, meaningful exposure to private market assets and highly diversified exposure to the AI thematic aim to provide robustness across different market scenarios."
Established by then-Liberal treasurer Peter Costello with an initial endowment of about $60.5 billion in 2006, the Future Fund board has in recent years taken charge of additional funds such as the Disaster Ready Fund and the Housing Australia Future Fund.
The housing fund recorded an 11.6 per cent gain in the year to $11.7 billion, taking the total return since inception in November 2023 to 9.6 per cent.
While Dr Arndt leaves the Fund in an enviable financial position, the last months of his tenure have been dogged by high staff turnover and reports of an overly controlling organisational culture.
Dr Arndt said his departure was unrelated.
"The engagement score from the staff is very high and it remains one of the highest in the entire public service," he told a media briefing.
"I feel like I'm leaving the organisation in an extremely strong place."
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