SYDNEY, July 2 (Reuters) - Australia's A$4.5 trillion

pension fund industry participants are preparing their closely

watched June-end financial year accounts for the country's

nearly 18 million members, with some major funds expecting

returns of less than 10%.

* Australian Retirement Trust (ART), which has A$370 billion

in funds under management and is the country's second-largest

fund said it expects its default high-growth option fund to

report a return of nearly 9% for the past financial year.

* The result will be finalised on Friday, but ART said the

fund should achieve a 10% return per annum over 10 years.

* HESTA, which has A$105 billion in funds under management,

said its default fund recorded a 9.4% return for the past year.

* Australian pension funds have recorded one-year returns of

between 9% and 11.4% over the past two financial years for

balanced and high-growth funds, according to SuperRatings.

* Australian shares make up a major part of each super

fund's different options, and the country's benchmark S&P/ASX200

has returned just 2.8% in the past year.

* ART and HESTA investment chiefs say AI companies are not

in a valuation "bubble", but the sector's leaders need to start

boosting earnings to justify their hefty debt-funded capital

spending.

* As of March 31, ART's holdings included all of the

"Magnificent Seven" U.S. tech companies. It also owns SpaceX

shares.

* "We don't think there's strong evidence it's a bubble,"

said Andrew Fisher, ART's general manager of total portfolio

management and resilience

* "When everything's funded by equity, those markets have a

lot of patience. Debt markets do not, when you start taking on

debt, you have to deliver back earnings," he said.

* HESTA's deputy chief investment officer Jeff Brunton said

the fund focuses on diversifying investments along the AI value

chain.

* "We've continued to invest into global digital real estate

leveraging the critical land and contracts and leases underlying

the digital networking sites like data exchange centres and cell

towers," Brunton said.

* A number of major funds are still finalising their

one-year returns and are due to report the data shortly.