News: TLS Australia's sovereign fund rebounds from virus downturn, posts 5% returns for Dec qtr

Jan 27 (Reuters) - Australia's sovereign wealth manager Future Fund on Wednesday said it recouped most of its COVID-19-related losses from last year, as the market recovered in the second half, growing to its highest value on record of A$171 billion ($132.41 billion).

For three-months ended December, it posted returns of 4.9%, up from 1.1% in the previous quarter.

The Future Fund marked negative returns of 0.9% for six-months ended June, as much of Australia went into a lockdown in the beginning of the year, spiralling the economy into its first recession in three decades.

"The negative returns of the first half have been more than reversed and the Fund continues to exceed its mandated benchmark return while controlling risk levels," Chief Executive Officer Raphael Arndt said in a statement.

However, he said the fund will exercise caution and position the portfolio around neutral risk due to the uncertain public health outlook and as several major economies go into lockdowns to tackle the virus.

The Future Fund was set up in 2006 with contributions of A$60.5 billion from government surpluses and proceeds of telecom company Telstra Corp Ltd's (TLS) privatisation, and has added over A$110 billion in earnings since.

The fund in total achieved a return of 9% per year over the last 10 years, exceeding its benchmark of 6.2%, it added.

The Fund's chair Peter Costello said they utilised the weakness in markets when the coronavirus crisis was at its peak to build the Future Drought and the Emergency Response fund portfolios, which have shown "very strong" returns.

($1 = 1.2915 Australian dollars)