Investment Updates

Australian Communities Foundation’s portfolios continue to deliver strong results, with long-term returns of 8.4% for the year to 30 September and over 10% across three years. I’m pleased to share this quarter’s update and highlight how we’re continuing to achieve these outcomes while staying true to what matters most to our community: investing responsibly for positive impact.

At Australian Communities Foundation, we believe strong financial performance can go hand in hand with responsible investment. As stewards of funds held in trust for community, we take this responsibility seriously.

That’s why we work closely with our advisors at Koda Capital to build diversified portfolios that align with your values. This quarter, we’ve expanded our impact investment approach, increasing allocations to Category B and C investments – those that benefit stakeholders and actively contribute to solutions – by 10% (see Impact Summary on pg. 9). This month’s Impact Spotlight on For Purpose Investment Partners (pg. 10) is a great example of how we’re contributing to positive outcomes for communities.

Thank you for your continued trust and partnership. Together, we’re ensuring your philanthropic capital is well-positioned for long-term growth while driving social and environmental outcomes that matter.

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 Scholarship 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

As share markets push to historical highs, the Australian Communities Foundation (ACF) long-term portfolios have provided a strong 8.4% return in the last 12 months. The short-term portfolio, benefiting from strong bond markets, has provided a return of 5.6% for the 12 months to 30 September 2025.

Quarterly Highlights 

The long-term portfolios delivered positive returns this quarter, ranging from 2.34% to 2.86%. These results are consistent with long-term averages following a strong June quarter.

International equities were driven largely by a handful of technology companies. Because the portfolios have less exposure to these companies than the broader market, their performance lagged the benchmark in the short term.

In Australian equities, the portfolio was impacted by holding fewer stocks in the strong-performing materials sector. However, it remains ahead of the benchmark for the year to 30 September 2025.

Over the past six months, the portfolio has transitioned more capital into international markets, which has provided greater levels of diversification across geography and industry, as well as access to new investment themes.

Returns in Alternatives have been mixed as new funds begin investing, while open-ended funds delivered strong annual returns of around 10%.

Global share markets continued to grow strongly this quarter, helped by new US trade deals that boosted investor confidence. In both the US and Australia, smaller companies finally outperformed larger ones (US Russell 2000 up 12.6% and ASX S&P Small Ords up 15.3%), showing broader confidence across markets.

While the US tariff rate is now approximately 16.7%, the impact has not yet been felt in inflation figures and unemployment continues to rise. This led the US Federal Reserve to cut interest rates during the quarter, though future cuts are less certain as policy changes flow through the economy.

In Australia, interest rates are expected to stay steady for now, which helps support real asset values and gives borrowers more certainty.

With share markets running strong and valuations high, ACF portfolios will remain well-diversified and focused on quality assets that can deliver solid long-term returns.

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: