Affluence Investment Fund Update – June 2017

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To view the full Affluence Investment Fund Update – June 2017 in pdf format, click here.

The ASX200 increased by 0.2% in June to finish a weak quarter for the financial year for domestic equity markets. The Affluence Investment Fund had a strong June, increasing by 1.1%. Since commencing in December 2014 ,the Fund has returned 9.6% per annum. Over that period the Fund has outperformed both our benchmark of 6.8% per annum (inflation plus 5%) and the ASX 200 (including dividends) of 7.6% per annum. Just as pleasingly, these returns have been delivered with very low volatility of only 3.1% per annum, compared to the ASX 200 of 12.3% per annum.

The strongest investments for the Fund during June were the Cromwell Riverpark Trust (up 11.9%), the Microequities Deep Value Microcap Fund (up 4.2%), and the Harvest Lane Absolute Return Fund (up 4.1%). It was pleasing to see that these top performers were diversified by asset class and strategy, being office property, long microcap equities, and market neutral event equities. Negative contributors were the Bronte Capital Amalthea Fund, Baker Steel Gold Fund, and the India Avenue Equity Fund.

During the month we exited our position in the listed Brookfield Prime Property Fund (BPA) after Brookfield completed the buyout of minority unit holders. This was a fantastic investment for the Fund, which benefited from purchasing the units at a discount to NTA, as well as a substantial increase in the underlying NTA. We have partially replaced this property exposure with a new investment in the APN Regional Property Fund. This Fund is listed on the National Stock Exchange and holds two A grade office buildings in Newcastle. We purchased the units at a more than 11% discount to NTA. The manager has indicated that they will consider a liquidity event in June 2018. Until then we expect to receive around a 9% income yield on our purchase price.

Looking forward, valuations for most assets remain relatively high. We believe the portfolio is well positioned for both rises and falls in asset and equity markets, and we continue to focus our efforts on making the Fund’s portfolio as resilient as possible.

At month end, 60% of the Fund was invested in unlisted investments, 20% in the Affluence LIC Fund, 5% in other listed investments, and 15% in cash. If you’d like further details of the investment portfolio, including our top holdings and weightings, register on our website as an Affluence Member and follow the link to the Members Area to view the portfolio.

If you would like to invest with us and get access to a diverse range of Australia’s best fund managers, including over 25 unlisted funds as well as more than 20 LIC’s and other listed entities, visit the fund page on our website at to find out more. There, you can get information on the Fund, apply online or download the application pack. If you’d like to add to your existing investment in the Fund, you can either complete the one-page form available on our website, or use the online facility.

The cut-off for this month’s applications is 25th July. Units will be issued effective 1 August.

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