The Future Fund expects to grow to more than $200 billion over the next decade, enough to cover all future superannuation liabilities of the commonwealth for the rest of the century.
The fund now stands at $133.5 billion after posting a rate of return of 8.7 per cent in the year to June, comfortably above its mandated target.
Chairman Peter Costello said the investment environment remained challenging with global interest rates at extraordinarily low levels by historical standards.
"The biggest thing that will affect financial markets in coming years is as interest rates are adjusted to towards more normative levels," he told reporters in Melbourne on Thursday.
The fund has now generated $73 billion in earnings since Mr Costello set it up in 2006, when he was coalition treasurer, with an initial investment of just over $60 billion.
Over the past decade, it has returned 7.9 per cent.
Mr Costello says there have been two key changes recently been made to the fund's structure by the Turnbull government.
The government will not be drawing money out of the fund until 2026, giving it almost another decade to run.
"We would expect over that period to grow in excess of $200 billion," Mr Costello said.
If no withdrawals are made before 2026, the fund could cover all superannuation liabilities of the Commonwealth through the whole of this century.
It was initially set up for a draw down in 2020/21.
The government has also lowered the fund's return mandate from July 1 to CPI plus four to five per cent, reflecting the low returns environment.
The return mandate has been 4.5 to 5.5 per cent since its inception.
Mr Costello dismissed suggestions that given the success of the fund it could run as a superannuation default fund.
"It can't mix other money into this sovereign wealth fund," he said.
The fund does not have the mechanism to receive money, keep members accounts or pay out money.
"I have heard suggestions that if someone set up default superannuation fund and asked the Future Fund to manage the money, we might be able to do that," he said.
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