Investment Updates

The June 2026 quarter reminded us of the value of maintaining a long-term perspective. Following a period of heightened market volatility, global investment markets rebounded strongly over the quarter, contributing to solid returns across ACF’s investment portfolios.

The Long-Term strategy returned 5.5% for the quarter, while the Short-Term strategy returned 3.1%. These outcomes reflect improved market conditions as investor confidence recovered and economic growth remained resilient despite ongoing global uncertainty.

While quarterly market movements can be significant, ACF’s investment approach is designed to support our donors’ long-term objectives and the communities they serve. Rather than responding to short-term market fluctuations, we remain focused on preserving and growing charitable capital over time to maximise the impact achieved alongside your granting.

Although returns over the past 12 months have been more modest than our longer-term averages, the portfolio’s three and ten-year results continue to demonstrate the benefits of a disciplined investment approach. This reflects our commitment to remaining focused on long-term outcomes rather than being distracted by shorter-term market cycles.

Responsible investment remains an important part of this approach. We believe the stewardship of charitable funds should be aligned with the purpose for which those funds have been entrusted. Our investment framework therefore seeks to deliver strong long-term financial outcomes while remaining consistent with ACF and our donors’ values.

Thank you for your continued trust.

Daniel Brugaletta
Chief Financial and Operations Officer

Long-Term Fund

Short-Term Fund

Strategic Objective (in accordance with ACF Investment Policy): Long-Term: CPI + 3.9% | Short-Term: AusBond Bank Bill Index + 1%

Charts denote performance of the long-term and short-term strategies in the Main Fund. Extension and Community Charity Funds also invest in accordance with the same long-term strategy, although performance differs slightly between the entities (see above table).

Long-Term Strategy

Short-Term Strategy

Quarterly Insights 

The portfolio delivered a strongly positive quarter, with performance supported by both growth and defensive assets. Recent changes to the investment strategy are beginning to show results, with the Long-Term and Short-Term portfolios returning 5.5% and 3.1% for the quarter ending 30 June 2026, ahead of their benchmark returns of 5.3% and 3.0%.

Over the longer term, returns have been affected by the portfolio’s lower exposure to some of the market’s strongest-performing areas recently, particularly US technology companies benefiting from growth in artificial intelligence. This reflects the portfolio’s focus on long-term investing in more stable sectors such as healthcare, more selective exposure to global share markets, and the exclusion of fossil fuels and selected mining and technology companies.

The portfolio’s more defensive investments, including bonds and cash, also performed strongly relative to their benchmark. Active management of these investments helped provide stability during periods of interest rate uncertainty and weaker bond markets.

The portfolios ended the quarter with higher cash holdings than usual due to strong donor contributions and investment income. This cash will be progressively invested across the portfolios during the next quarter.

Global share markets rebounded strongly over the quarter, as investor enthusiasm around AI outweighed continued economic and geopolitical uncertainty. Some of the strongest gains were seen across Asian markets, particularly among technology companies. In the US, the S&P 500 rose 14.9% over the quarter despite a sell-off towards the end of June.

High inflation continued to create uncertainty for global markets. In the US, this contributed to rising government bond yields as investors weighed the possibility of interest rates remaining higher or increasing further. This uncertainty resulted in continued volatility across bond markets during the quarter.

The Australian share market recorded more modest growth, with the ASX 300 rising 3.6%. Slower economic growth and persistent inflation weighed on the market, while the Reserve Bank of Australia increased the cash rate by a further 0.25 percentage points in May, bringing it to 4.35%.

One hundred per cent of ACF’s investment portfolio is responsibly invested. Each investment is categorised according to the Impact Management Project framework. The impact categorisation is as follows: