Future Fund chair Peter Costello says "prudent, patient" investing has seen the fund almost double in nine years, but warns more difficult times are ahead.
The fund set up to meet commonwealth superannuation liabilities posted a return of 15.4 per cent for the 2014/15 financial year, generating $15.6 billion.
The result lifted the total value of the fund to a massive $117.2 billion, compared to the initial $60.5 billion cash injection made by the former Howard government.
The mandate of the fund, set up in 2006 by Mr Costello when he was Liberal treasurer, is to make returns of CPI plus 4.5 per cent.
"It's in excess of that objective as of the moment, which is good because we are going into more difficult conditions," Mr Costello told a briefing presenting the fund's latest portfolio update on Wednesday.
The enormous stimulatory policy measures being pursued by central banks in recent years, which have helped to drive strong rises in asset prices, could not be sustained indefinitely.
"It seems likely that generally returns in the future will be lower than in recent years," Mr Costello said.
The fund's managing director David Neal said while the 2014/15 result was pleasing, he was conscious of a somewhat mixed global economic and market outlook.
The fund had taken the opportunity to moderately reduce its portfolio risk by cutting its equities exposure.
It also took a long term view of markets, rather than trying to predict short-term market moves.
Mr Neal conceded that in a somewhat fragile environment, any news could "spook" markets.
At the moment markets were worried about the slowdown in China, a month ago they were worried about structural issues in Europe, and at the same time being a bit nervous about when the US Federal Reserve will raise interest rates.
But Mr Costello dismissed the suggestion Chinese authorities had "lost the plot" in trying to manage its economy.
The Chinese government was doing everything it thought was necessary to keep stability in its markets.
"We do see it as quite a concerted response from a government which has many instruments of intervention and very deep pockets," Mr Costello said.
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