The Future Fund has continued to grow strongly, aided more recently by a synchronised period of economic growth across the world, its chairman Peter Costello says.
The fund's latest portfolio update released on Thursday shows it now stands at $138.9 billion at the end of 2017, having exceeded all its benchmark timeframes since its inception in 2006.
It shows a return of 8.8 per cent over the past year compared to a target return 6.4 per cent, while over 10 years it has returned 8.1 per cent against a target of 6.8 per cent.
Since July 1, 2017, the fund's investment mandate return was reduced from CPI plus 4.5 to 5.5 per cent to CPI plus four to five per cent.
"The recent investment climate has been very strong," Mr Costello told a media briefing in Melbourne.
"We are having a synchronised period of growth across all regions of the world. This is a co-ordinated upswing of the like we have not seen for a very long time."
The fund was set up in 2006 by Mr Costello when he was federal treasurer to pay for future unfunded superannuation liabilities of public servants.
It has grown from seed capital of $60.5 billion invested by the then coalition government led by John Howard.
Mr Costello said some of the risks that were seen 12 months ago have declined.
In particular, he said the tightening of monetary policy in the United States has gone as well as anyone could have expected.
"The consequence of that, we have taken a little more risk," he said.
He said the tax cut legislated in the US had led to a lot of buoyancy in US equity markets.
He noted US markets were significantly higher than prior to 2008 and before the global financial crisis, whereas the Australian market has yet to get back its pre-2008 level.
He thought part of that was in response to US administration's economic policy and part due to the US Congress passing the tax cut.
"You have to ask yourself whether the markets have run ahead of the policy or whether they have got more to factor in," Mr Costello said.
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