The Best Can Be Hard To Find

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Affluence | Invest Differently
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Hello

We’re constantly on the lookout. We know where to look. We know what to look for.

There are fund managers in Australia who we believe can outperform their market benchmarks. By investing with these managers, our Affluence funds have exposure to many different asset classes, investment strategies and styles. A lot of these fund managers are relatively unknown, have high minimum investment amounts or are closed to new clients.

We’re often asked which funds we love the most. The truth is, it can change from time to time. Managers can have good and bad periods, as can the assets they invest in. But at the core of all our Affluence fund portfolios are a stable of long-term quality managers that rarely change.

Below, we’ve outlined a few, in no particular order. Each of our Affluence funds invests with a wide range of exceptional managers like these.

Phoenix Opportunities Fund (Unlisted Fund)

Some of the best returns over the long term can be made from a portfolio of small and micro-cap ASX listed stocks. There are many reasons why we like this sector, but the biggest are that you can find companies that are underappreciated, under researched and undervalued much more easily if you know what you’re doing. The team at Phoenix portfolios certainly know what they’re doing.

They are exceptional managers, with a value focus. We have known them for many years and remain enormously impressed with their process and performance. The combination of outperformance with lower downside volatility is rare in this space. And they’ve delivered very impressive long-term returns.

The Phoenix Opportunities Fund is closed to new investors. We are fortunate that we have secured an ongoing investment with this manager.

Packer Investigator Trust (Unlisted Fund)

This fund can own Australian and global shares, bonds, cash and various other types of assets, with very few investment limits. Their objective is to grow wealth over the medium to long term by more than the ASX All Ordinaries Accumulation Index.

Over the past 20 years, the managers’ asset allocation has changed dramatically, from being fully invested in Australian equities, to almost entirely bonds and cash, and more recently in global equities. The most impressive part of the historical performance for this manager is their ability to identify inflection points. Both the 2000 tech wreck and 2008/2009 GFC decimated equity markets across the globe. However, leading into both meltdowns, Packer sold the vast majority of his equity holdings and moved into cash and bonds. He didn’t just reduce the market falls. He ended each of those calendar years with positive returns. More recently, he also managed to sidestep the steep market correction in March of 2020.

This fund has a relatively high minimum investment amount, making it difficult to access for many people.

Future Generation Limited (Listed Investment Company ASX code: FGX)

We call this LIC our “desert island stock” (if you had to live on a desert island for the next 10 years and could only invest in one stock, what would it be?). FGX has consistently been one of the largest holdings in our Affluence LIC Fund. It was established in September 2014 with the dual purpose of an investment vehicle and providing funding to charities supporting children and youth at risk. It is a fund of funds in Australian equities, and currently invests with 20 managers who have all agreed to charge no fees. Instead, the LIC makes a 1% per annum annual donation which is distributed to a range of charities.

The underlying managers are of exceptional quality, in our view. Many of their funds are closed to new investors or have high initial application limits, putting them out of the reach of most. By investing through FGX, we are paying no fee with the dual benefit of knowing that instead, 1% per annum is being donated to charitable causes.

Before you invest, read this!

We encourage you to do your research before making any investment. Remember, a great manager is only part of the story. We also like to make sure they’re trading at the right price and that the assets they hold are not themselves overvalued. In the end, it’s up to you to make the decision that’s right for you, in conjunction with your financial advisor if you have one.

Learn more about the managers and LICs we use

You can access all our articles and reports on our website at any time. Some of our website content including details of our fund portfolios and articles about managers we invest with, is accessible to Affluence Members only. The good news is, you can register at any time to become an Affluence Member. So if you’d like to learn more about who we invest with, visit https://affluencefunds.com.au/register/ to set up your Affluence Member username and password.

Affluence Members receive exclusive access to all Affluence content and portfolio information for life. You will also get priority notification and allocation on all future opportunities.

All the best with your investing.

Affluence Investment Team

If you have any questions please do not hesitate to contact us.

P:1300 233 583 E:[email protected] W: www.affluencefunds.com.au

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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. Neither the information nor any opinion expressed constitutes an offer by Affluence, its subsidiaries, associates or any of their respective officers, employees, agents or advisers to buy or sell any financial products. The content has been prepared without considering your objectives, financial situation or needs. In deciding whether to acquire or continue to hold an investment in any Affluence fund you should consider the relevant Product Disclosure Statement or other disclosure document or continuous disclosure updates available from Affluence. Affluence, its subsidiaries, associates or any of their respective officers, employees, agents or advisers do not guarantee the performance or success of any Fund, the repayment of capital, or any particular rate of capital or distribution return. Past performance is not indicative of future performance. Affluence recommends you consult your professional adviser to determine whether the products offered by Affluence fit your objectives, financial situation or needs before deciding to invest. Some Affluence funds are only available to Eligible Investors.

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