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December 2023 reports and things we found interesting

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Hi ,

Happy new year from all of us at Affluence. All funds delivered positive returns in December, as a Santa rally delivered a strong finish to 2023. Bond yields continued to fall, and investors whole heartedly embraced the allure of goldilocks conditions. You can access the latest fund reports below, as well as our Annual Investor Letter, in which we review fund performance in 2023 and take stock of how our portfolios are positioned for 2024.

The big news from us this month has been the launch of the Affluence Income Trust. It’s an important addition to our investment range for a number of reasons. Our existing funds target both income and capital growth. The Affluence Income Trust is focused purely on maximising monthly income, while retaining a relatively low risk profile. This Fund also has a very flexible investment mandate within the fixed income asset class, a feature that is surprisingly rare in this sector. This allows us to take advantage of what we believe to be the best risk adjusted investment opportunities in fixed income at any given time.

We will be holding a webinar to introduce the Affluence Income Trust on Tuesday 13 February. You can register for the webinar from the link below. If you’re looking for regular income, we encourage you to take a look at this new fund.

Should you wish to invest with us this month, applications close on 31 January for the Affluence LIC Fund, and 25 January for all other Affluence Funds. Go to our website and click “Invest Now” to apply online or access application and other forms for any of our funds.

As always, thanks for reading and for your continued interest in what we do.

If you have any questions or feedback, reply to this email or give us a call.

Regards,

Daryl, Greg and the Affluence Team.

Affluence Fund Reports

Affluence Income Trust

The Affluence Income Trust returned 0.7% in December. The Fund pays monthly distributions. The current distribution rate is 7.5% per annum.

The cut-off for monthly applications and withdrawals is Thursday 25 January.

Affluence Investment Fund

The Affluence Investment Fund returned 2.2% in December. Since commencing, the Fund has returned 7.7% per annum, including monthly distributions of 6.4% per annum.

The cut-off for monthly applications and withdrawals is Thursday 25 January.

December 2023 Fund Report

Affluence LIC Fund

The Affluence LIC Fund rose by 3.5% in December. Since the Fund commenced, returns have averaged 11.1% per annum, compared to 9.3% per annum for the ASX 200 Index.

The cut-off for monthly applications and withdrawals is Wednesday 31 January.

December 2023 Fund Report

Affluence Small Company Fund

The Affluence Small Company Fund returned 3.7% in December. Since commencing, returns have averaged 8.9% per annum vs 6.5% per annum for the ASX Small Ords Index.

Available to wholesale investors only. The cut-off for monthly applications and withdrawals is Thursday 25 January.

December 2023 Fund Report

Affluence Income Trust Webinar

Click the link below to register for the Affluence Income Trust webinar. Topics include:

  • Why we started the Affluence Income Trust.
  • Exciting opportunities in fixed income.
  • Fund structure and key terms.
  • Current portfolio features.
  • The outlook for fixed income markets.

This is our first new fund since 2016. If you’re an income investor, you don’t want to miss this. Can’t make it on the day? Don’t worry. All registrants will be sent an email after the webinar, with a link to a replay and the presentation.

Date: Tuesday 13 February 2024
Time: 12pm QLD Time (1pm NSW / VIC / TAS – 12.30pm SA / NT – 10am WA)
Duration: 30 minutes plus question time

Annual Investor Letter

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In our review of 2023, we look at what happened in investment markets, how our Funds performed, how they’re positioned for 2024 and where we think the opportunities are. It’s everything we would want to know, if we were you.

Annual Investor Letter

Things we found interesting

Charts of the (Month) Year

There’s a reason we almost always include some charts in our monthly enews. A picture is worth a thousand words, and is also one of the best ways to demonstrate some timeless investment lessons. Here, courtesy of Charlie Bilello is an excellent compilation of 2023 charts, proving that markets can always surprise you and it pays to be prepared.

From Charlie:

“Having a few extreme charts on your wall can be a helpful reminder that there is no such thing as “can’t,” “won’t,” or “has to” in markets. The market doesn’t have to do anything, least of all what you think it should do. The market does what it wants, when it wants to do it. It is the real-time personification of collective human psychology, with fear and greed on full display. That’s what makes it so hard and at the same time so interesting. There are times when skepticism is warranted and other times when you need to suspend disbelief, with no manual to help you decipher which situation applies. Find some charts that speak to you personally, and put them on your wall as a constant reminder that the range of possible outcomes is much wider than any of us think. For there is no impossible in markets.”

Quote of the month:

“The way to judge yourself is inertia analysis. Run your January 1 portfolio for the full year without any changes and compare it to your actual results. It’s awful because some years you realize all you did was subtract value when you went into the office.”

Nicolai Tangen

Nicolai is the CEO of Norges Bank Investment Management, the manager of Norway’s $1.5 trillion sovereign wealth fund, the largest of its kind in the world. The fund’s assets are equal to almost AUD$400,000 for every Norwegian citizen, and support roughly 30% of Norway’s annual budget. Norges Bank owns 12,000 global equities and 1.5% of all global equity value. It is massive. The nugget of wisdom above comes from a recent interview with Nicolai on Colombia Business School’s Value Investing Legends Podcast. You can listen to the episode here.

Financial history lesson: 23 lessons from 2023.

In this looooong post, Vishal Khandelwal shares 23 ideas he read, learned, re-learned, and wrote about in 2023, in no particular order of importance. Plenty of gems in here.

Vaguely interesting facts.

  • Ronald McDonald is called Donald McDonald in Japan.
  • Blood donors in Sweden receive a thank you text when their blood is used.
  • Bangladesh has six seasons: Grishmo (summer), Borsha (rainy), Shorot (fall), Hemanta (cool), Sheet (winter), and Boshanto (spring).
  • A chess player was recently fined by the International Chess Federation for wearing a pair of sneakers that were deemed too “sporty”.

Source: mentalfloss.com, wikipedia.com.

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This information has been prepared by Affluence Funds Management Limited ABN 68 604 406 297 AFS licence no. 475940 (Affluence) as general information only. It does not purport to be complete, and it does not take into account your investment objectives, financial situation or needs. Prospective investors should consider those matters and read the Product Disclosure Statement (PDS) or Information Memorandum (IM) offering units in the relevant Affluence Fund before making an investment decision. The PDS or IM for each Affluence Fund contains important notices and disclaimers and important information about each offer.

As with all investments, an investment in any Affluence Fund is subject to risks. If these risks eventuate, they may result in a reduction in the value of your investment and/or a reduction or cessation of distributions. Distributions are not guaranteed, nor is the return of your capital. Past performance is not indicative of future performance. It is important that you know that the value of your investment will go up and down over time, returns from each Fund will vary over time, future returns may differ from past returns, and returns are not guaranteed. All of this means that you could lose money on an investment in an Affluence Fund. As set out in the PDS or IM for each Affluence Fund, key risks include concentration risk, economic and market risk, legal and regulatory risk, manager and key person risk, liquidity risk, leverage risk and currency risk. Affluence aims, where possible, to actively manage risks. However, some risks are outside our control.

This information and the information in the PDS or IM are not recommendations by Affluence or any of its officers, employees, agents or advisers. Potential investors are encouraged to obtain independent expert advice before making any investment decision.

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Affluence Funds Management
Level 22, 127 Creek St,
Brisbane, Queensland 4000
Australia

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