Affluence Small Company Fund September 2017

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To view the full Affluence Small Company Fund September 2017 report in pdf format, click here.

We believe that smaller companies can provide higher returns over time than the ASX 200 index. Investing in smaller companies through different managers, investment strategies and structures can help to reduce risk.

The Fund provides you access to a diversified portfolio of small companies via unlisted funds and LICs selected by Affluence.


Report Summary

The Affluence Small Company Fund had a good month in September and increased by 1.5%. The ASX Small Ordinaries increased by 1.3%. The Fund has returned 9.1% per annum since inception. The Fund has slightly underperformed its benchmark since inception. However it has delivered those returns with about half the volatility of the ASX Small Ordinaries.

Small companies have made a comeback in the second half of this year. The ASX Small Ordinaries increased by 4.0% over the past 6 months compared to -0.9% for the ASX 200. It was a different story for the 6 months to March 2017, when the ASX Small Ordinaries decreased by 1.0% and the ASX 200 increased by 10.2%.

Our managers have mostly reported a very difficult start to the year, with significant downward pressure on prices. The market has re-stabilised recently and prices have adjusted to the more correlated to the more favourable fundamentals of the small cap market.

We made a new investment towards the end of the month. The manager invests in a portfolio of small and mid-cap mining and energy equities. They target companies in the lowest quartile of the cost curve. They look to buy companies with no or little debt. This manager have proven they can achieve outstanding results in a very niche sector.

At the end of September, the Affluence Small Company Fund held investments in 6 unlisted funds (including the Affluence LIC Fund) representing 94% of the total portfolio. The balance 6% was cash.


Learn more

Visit the Affluence Small Company Fund page.

We have identified a number of other outstanding small cap managers that we would like to add to the portfolio in the coming months. In order to make these additional investments, we are considering undertaking a small capital raising in the Fund early next year. If you are interested in investing in the Affluence Small Company Fund, and you qualify as a Wholesale or Sophisticated investor, please let us know.

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