This compares with a 10-year return target of 6.4 per cent - the consumer price index plus four to five per cent.

In a portfolio update, the Future Fund - set up to cover future superannuation liabilities of public servants - said global equity markets turned down sharply in the March quarter, due in part to higher interest rates around the world .

"In addition, the Russian invasion of Ukraine has added to risk for international investors," said Peter Costello, the former Liberal treasurer and now chair of the Future Fund he created in 2006.

He said following the invasion, the fund moved to sell down all holdings in companies listed on the Russian stock exchange.

"Sanctions on Russia and the closure of the Moscow stock exchange to foreigners have hampered efforts to sell. We will wind down the holdings as market conditions allow," he said.

Mr Costello said as central banks tighten monetary policy to rein in inflation and geopolitical tensions continue to create shocks in investment markets, the fund has been positioning for what will be a challenging and volatile future.

"As we have been saying for some time, investors should expect lower returns than in the past over the long term," he said.

In total the fund manages assets worth $248.9 billion.

This also includes the Medical Research Future Fund, the Aboriginal and Torres Strait Islander Land and Sea Future Fund, the Future Drought Fund, the Emergency Response Fund and the DisabilityCare Australia Fund.

Australian Associated Press