Future Fund 'could review fossil fuels'
The commonwealth Future Fund has indicated it could review its fossil fuel investments if demand for green energy increased.
The comments come as Prime Minister Tony Abbott blasts the Australian National University's "stupid decision" to offload its fossil fuels portfolio.
The university is selling holdings in Iluka Resources, Independence Group, Newcrest Mining, Sandfire Resources, Oil Search, Santos and Sirius Resources for ethical reasons.
Meanwhile, Future Fund managing director David Neal said his sovereign wealth fund was closely monitoring new energy technology and changing demand for fossil fuels.
"That's something, that as an investor, we kind of have to worry about," he told reporters during an investor briefing on Wednesday.
"We expect our managers in thinking about the valuations they put on stocks that have exposure to fossil fuels.
"We expect them to have regard for the risks of a future changing demand picture."
Mr Neal also indicated he expected slimmer returns in coming years as the US Federal Reserve unwound stimulus measures.
"We think times might get a little harder going forward," he said.
The Future Fund has delivered average annual returns of 7.3 per cent since it was established by the Howard government in May 2006 to finance the superannuation liabilities of public servants.
But annual returns stood at 14 per cent in the year to September 2014, with double-digit returns delivered during the past five years.
"I don't think anybody would expect those types of returns to be sustainable," Mr Neal said.
Future Fund assets were worth $104.48 billion as of September 30.
