Affluence Investment Fund

Affluence Investment Fund Update – April 2016

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To view the full Affluence Investment Fund Update – April 2016 in pdf format, click here.

Fund Commentary:

The Affluence Investment Fund returned 1.9% in April. We witnessed a move to a more positive frame of mind as the month progressed and toward the end of April, the ASX was approaching the upper limits of its recent valuation range. Since commencement in late 2014, the Fund has delivered 8.8% per annum total returns, beating both our target and the Australian stock market over that period.

April, like March, was a month where the vast majority of our investments delivered positive returns. Our best returns were from our small resources investments as the S&P/ASX200 Resources Accumulation Index surged 15.4%, the largest monthly gain on record. While short- term it seems to have run a little too hard, we are getting ever more comfortable that resources have bottomed.

There was very little to be disappointed about this month in the portfolio. Our worst performers were our long/short and market neutral funds which were roughly flat for the month. We hold these types of investments to cushion the blow when the market has a bad month, so we are very comfortable with them not contributing too much when stock markets rise strongly, as they did in April. Our property investments continued to tick along and deliver a decent yield.

We spent a number of days traveling interstate this month and met over a dozen fund managers, a number of whom impressed us greatly. There’s more work to do, but we expect to make 3-4 further investments in coming months as a result of that follow-up work. During the month we also approved our rst investment into a xed interest fund. While we immediately rule out almost all bond funds, this one’s different. It has consistently been delivering around a 7%pa return from a portfolio of various types of loans.

At the end of April, the Affluence Fund held investments in 17 unlisted funds, which represented 62% of the total portfolio. It also held 22 investments in listed investment companies and securities, representing 16% of the portfolio. The balance of 22% was held in cash. We expect to reduce that cash holding by around 5% over the next month and have another 2-3 investments in advanced stages of due diligence. In addition, we plan to take a stake in the WAM Leaders Fund, the latest LIC to be listed by Wilson Asset Management. It’s the only newly listed LIC we’ve ever considered investing in.

If you’d like further details of the Affluence Fund portfolio at any time, just email us and we’ll provide it to you.

The response to our new online investor application facility has been better than we expected. If you would like to invest with us or add to an existing holding, we encourage you to utilise this facility. A reminder, the cut-off for monthly investments is the 25th. If you know anyone else that may be interested in the Fund, feel free to let them know.

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