Australia’s sovereign wealth fund posted a 6% annual gain as it warned that high inflation would keep returns lower than investors have enjoyed for the past decade.

The Future Fund saw total assets across its portfolios grow to a record A$256.2 billion ($166 billion) in the year to June 30, according to a statement Wednesday. While the main fund’s 6% return was higher than the previous year’s small decline, that was almost three percentage points below its 10-year average gain.

“The Board is focused on maintaining a portfolio that is resilient to a range of scenarios while delivering attractive risk-adjusted returns,” Chair Peter Costello said in the statement. “With persistent higher inflation we expect real returns to investors will remain below those of the past decade.”

The portfolio benefited from diversification across international markets and private assets. About a fifth of the fund’s holdings are in global equities, while private markets comprise more than a third of assets.

“Although risk assets are under-pricing some of the threats we see, higher interest rates are making it easier to generate meaningful returns from a diversified range of assets,” Chief Executive Officer Raphael Arndt said in the statement.

Investors around the world are grappling with the possibility that global interest rates are nearing a peak, with markets pricing cuts next year in the US and Australia. Still, the persistent inflation in some economies leaves the door open to the chance that policy makers will need to leave rates elevated for some time yet.

“The Future Fund portfolio is positioned moderately below neutral risk settings at a time when the economic outlook and the direction of inflation and interest rates make investment returns less certain,” Arndt said.