The Future Fund ballooned by 11 per cent to $162.6 billion in the last financial year, despite volatile financial markets.
However, Peter Costello, the former federal treasurer and now chairman of the fund, has warned long-term returns are unlikely to replicate the strong returns of recent years.
The fund, introduced in 2006 by Mr Costello to help cover future superannuation liabilities of public servants, was set-up with an initial $60.5 billion contribution from the then Howard government.
Mr Costello said in the fund's 2018/19 annual report that the first half of the financial year was characterised by volatile markets over concerns regarding the US-China trade dispute and other geopolitical issues.
"This led to a period of monetary policy easing by central banks which, together with market expectations of further easing and continued economic growth, has supported strong asset returns in the second half of the year," Mr Costello said.
But in the longer term, Mr Costello said the global economy will face structural challenges, including demographic shifts and high levels of debt.
"The (Future Fund) board continues to see long-term returns as unlikely to replicate the strong returns of recent years and is cautious of the risks for investors," he says.
"In this uncertain environment, the board is maintaining its patient long-term approach to investment."
Australian Associated Press