To view the full Affluence Investment Fund Update – May 2016 in pdf format, click here.
The Affluence Investment Fund returned 1.9% in May. Since commencement in late 2014, the Fund has delivered 9.6% per annum total returns, beating both our target (inflation + 5%) and the Australian stock market (5.6%) over that period. More pleasingly, the Fund returns have continued to display very low volatility, with 72% of monthly returns being positive and the worst monthly return being a loss of just 0.7%.
The underlying investments continued to perform very well during the month. Of our 19 unlisted fund investments, 17 delivered positive returns in May, with the average being 2.3%. Our long/short managers had a very good month, as did our smaller company managers. Our small resources investments were the laggards this month, having delivered stellar returns for us over the past quarter.
We added two new investments to the Fund portfolio this month. The first was a fixed interest fund with quite a different portfolio to most other funds in the sector. The second was a global market neutral fund, which has the potential to deliver positive returns in both up and down markets and is expected to do particularly well in times of market stress. We placed around 2% of the Fund’s capital into each investment. We are likely to increase those allocations slowly over time should these funds perform in line with our expectations. We also made additional investments into two of our existing holdings.
The positive mood continued during the month as Australian shares increased by approximately 3% including dividends. At the end of May, the ASX remained at the upper limits of its recent valuation range, proving the “sell in May and go away” mantra is not always true.
At the end of May, the Affluence Fund held investments in 19 unlisted funds, which represented 55% of the total portfolio. It also held listed investments in 15 listed investment companies and other securities, representing 18% of the portfolio. The balance of 27% was held in cash. The increase in cash holdings during the month was as a result of our largest ever monthly inflows from new investors. We expect to reduce that cash holding over the next month, through increased allocations to a number of existing investment funds, subject to market conditions of course.
If you’d like further details of the Affluence Fund portfolio at any time, just email us and we’ll provide it to you.
If you would like to invest with us or add to an existing holding, we encourage you to utilise our online application facility. Just follow the link on our website. A reminder, the cut-off for monthly investments is the 25th of each month. If you know anyone else that may be interested in the Fund, feel free to let them know.