Future Fund drills into geopolitics to shape strategy: Australian fund's paper outlines 4 big trends and their growing relevance.

The Future Fund, a sovereign wealth fund in Melbourne with $143.2 billion in assets, has published a position paper emphasizing the importance of considering geopolitics in portfolio construction. The paper outlines four main trends that have made geopolitics more relevant, including changing trade dynamics, a shift in the world order, growing populism, and the increasing risk of conflict. The fund has taken actions to build resilience in its portfolio, such as owning assets that can outperform in an inflationary environment and adding exposure to gold, commodities, and different regional and currency allocations. The fund has also made changes to its asset allocation, reducing exposure to China and increasing investments in domestic assets and energy transition opportunities. [Extracted from the article]