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Affluence Investment Fund

Affluence Investment Fund Update – March 2017

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Home » Affluence Investment Fund Update – March 2017

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

In March the ASX 200 increased by 3.3%, and returned 20.5% over 12 months and 4.4% per annum over 2 years. Over these same periods the Affluence Investment Fund increased by 0.6% in March, 12.7% over 12 months and 9.8% per annum over 2 years. Since inception in December 2014 the Fund has returned 9.9% per annum, ahead of the benchmark (inflation plus 5%) of 6.8% per annum and the ASX 200 of 9.1% per annum.

Our strong contributors this month were the Terra Capital Natural Resources Fund (up 8.5%), the India Avenue Equity Fund (up 5.7%), and the Smallco Broadcap Fund and Smallco Investment Fund (up 4.2% and 4.1% respectively). Detractors included our small holding the Baker Steel Gold Fund, which is not surprising given the strong equity markets, and the Brookfield Prime Property Fund. The Brookfield fund was up strongly in February, and gave part of the increase back this month. In early April, Brookfield (the manager and largest unit holder of the fund) announced a proposal to acquire all the remaining units in the fund. This should result in a good performance from this investment in April.

During March we made a number of investments, increasing our exposure to some existing Funds and adding three new ones. One of the new asset managers is Harvest Lane. The Harvest Lane Absolute Return Fund specialises in merger arbitrage. The team selectively acquires companies subject to takeover and other corporate activity. This means returns are not necessarily dependent on the market. We find this combination attractive, but like all new managers, we commenced with a very small allocation from our investment portfolio and will build on this over time if the manager delivers the results we expect.

In recent months as markets have climbed, we have started to adopt a more defensive positioning for the Fund. At month end, around 15% of the portfolio was in cash. A further 24% was invested in market neutral and long/short strategies, which have the potential to outperform substantially in down markets. Another 11% are property-related investments, mostly lowly geared and designed to deliver reasonable yield. We have limited exposure to volatile sectors and managers.

An investment in the Affluence Investment Fund will provide you with access to over 25 unlisted funds, and over 20 LIC’s and other listed entities. If you’d like further details of the Affluence Investment Fund portfolio at any time, just email us and we’ll provide it to you.

If you would like to invest with us and get access to a diverse range of Australia’s best fund managers, we encourage you to utilise our online application facility. Just follow the link on our website. If you’d like to add to your existing investment, you can either complete the one-page form available on our website, or use the online facility. A reminder, given the Anzac day holiday, the cut-off for this month’s applications is 24th April.

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