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July 2024 Fund Reports, Harvesting Discounts Webinar plus other things we found interesting

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Affluence eNews
Affluence eNews

July was a good month to start the new financial year, with all our funds delivering positive returns. Below, you can access monthly fund reports, as well as a profile of one of our Affluence Income Trust investments.

Speaking of the Affluence Income Trust, July was the one year anniversary for our newest and most conservative fund. Performance for the 12 months was 8.1%, above the target return of the RBA cash rate + 3%. We are pleased to have provided investors with solid and consistent returns. The Fund has now been built out to include 16 investments across a wide range of fixed income sectors, providing access to literally thousands of underlying loans. We are currently in due diligence on a further two investments which we expect to add in the next couple of months.

In other news, we presented a webinar for Investment Markets in July, where we dug into the discount capture strategy we use in the LIC and other funds. A link to the video and presentation is below.

If you’re in Sydney, Daryl will be visiting from 16-20 September. If you would like to meet with him during that week, let us know.

We have now finalised all year-end reporting, and all investors should have received annual tax and investment statements for all funds.

The cut-off for applications this month is Friday 30 August for the Affluence LIC Fund and Friday 23 August for all other Affluence funds. Go to our website and click “Invest Now” to apply online and access printable paper forms. Applications received by the cut-off dates will be effective from 1 September.

Thanks for reading and for your continued support. If you have any questions or feedback, reply to this email or give us a call.

Regards,

Daryl, Greg and the Affluence Team.

LIC Fund Webinar

In July, Daryl presented at the InvestmentMarkets Investor Webinar on Harvesting Discounts from LICs. You can view the 15 minute recording of Daryl’s presentation below. It explains discount capture and how we approach this niche strategy. Daryl also talks through a few examples of current opportunities in the market.

Affluence Fund Reports

Affluence Income Trust

The Affluence Income Trust returned 0.7% in July and 8.1% for its first full year. The Fund pays monthly distributions, and the current distribution rate is 7.5% per annum.The cut-off for monthly applications and withdrawals is Friday 23 August.

July 2024 Fund Report

Affluence Investment Fund

The Affluence Investment Fund returned 1.7% in July. Since commencing, the Fund has returned 7.8% per annum, including monthly distributions of 6.4% per annum.The cut-off for monthly applications and withdrawals is Friday 23 August.

July 2024 Fund Report

Affluence LIC Fund
The Affluence LIC Fund returned 2.5% in July and 11.1% since commencement. At the end of the month, the average portfolio NTA discount remained high at 23%.The cut-off for monthly applications and withdrawals is Friday 30 August.

July 2024 Fund Report

Affluence Small Company Fund
The Affluence Small Company Fund returned 2.5% in July. The largest positive contributors were ASX listed Ryder Capital (RYD) and US Masters Residential (URF).The cut-off for monthly applications and withdrawals is Friday 23 August.

July 2024 Fund Report

Investment Profile

Each month we profile an underlying investment of one of our funds. This month, we’ve taken a look at one of the more interesting holdings in the Affluence Income Trust. The Altor AltFi Income Fund holds a concentrated portfolio of bespoke loans, with potential for further upside through equity participation.

Investment Profile

Things we found interesting

Chart of the month.

Here’s an interesting long term perspective on returns from the US market. Topdown Charts have analysed annual returns for each decade since the 1880s. Total returns can be broken down into dividend yield + earnings growth + change in valuation. The business cycle and structural changes impact earnings growth, while the market cycle and investor sentiment swing the valuation component back and forth.

In every decade except the 1950s, a total return above 10% per annum was driven by valuation changes. Stocks got significantly more expensive in those decades. In most low return decades (except the 1890s), the opposite was true.The hallmark of the period since 2010 has been a significant increase in valuations. Looking forward, we prefer to look elsewhere for value.

Financial word of the month.

Underwrite, v

An investment bank underwrites an offering of stocks or bonds when it purchases them from the issuing company and immediately resells them to the investing public. The bank will customarily take a fee of up to 7 per cent of the proceeds to compensate itself for the risk of being the sole owner of the securities for a few hours. The term comes from the historical tradition, long since abandoned, in which the partners of the banking firm signed the document that described the commitment of capital, personally underwriting the risk with their own names. Although underwriting risks have likely declined over the centuries, underwriting fees haven’t.

Source: “The Devil’s Financial Dictionary” by Jason Zweig.

Strange jobs that no longer exist.

AI is apparently going to make all of us redundant. In recognition of this trend, each month we’re profiling a strange job that no longer exists. This month…

Pinsetter

If you’ve ever been ten pin bowling, you’ll know that machines automatically reset the pins after each turn. But before these were invented, there was a whole profession devoted to manually setting the pins back up. This was a tedious job. The “employees” of these jobs were often children and, the job could be dangerous. Flying pins or bowling balls were common and you had to have your wits about you.

The introduction of automatic pinsetters in 1956 by the Brunswick Company was revolutionary for the industry – and put many young kids out of a job. Luckily, the demise of manual pin setting coincided with the rise of McDonalds, putting hundreds of thousands of teenagers globally back into employment.

Source: historydefined.net

Vaguely interesting Olympic facts.

In honour of the Olympics and Australia’s total dominance, this month our vaguely interesting facts have an Olympic focus.

  • The first Olympics were held in 776 BC as part of a religious festival honouring the Greek God Zeus. They consisted of only one event. No, it was not the marathon. It was a 192-metre foot race called the Stadion, which inspired the English word stadium. Records from the time are sketchy, but legends suggest the race was won by a cook named Coroebus.
  • In ancient Greece, athletes competed naked. This was done as a tribute to the Zeus, and it was thought that showing off their bodies could also help intimidate other competitors. The word “gymnasium” is derived from the Greek “gymnos,” which means nude.
  • In the ancient Olympics, there was only one winner in each event. They gained fame and honour for themselves and their hometown, which was a huge motivation to participate. There were also no medals. Instead, each winner received a crown made of olive leaves. And when they arrived home, they also got a rather generous cash prize.
  • The ancient Olympics were held every four years for 12 centuries. But in 393 AD, Roman Emperor Theodosius I banned all pagan festivals and there were no Olympics for almost 1,500 years. No one liked him very much after that.
  • The Olympics were resurrected in 1896 (known as the Modern Olympics) by Baron Pierre de Coubertin, a French teacher and historian. In the 1896 Olympics, first-place winners got a silver medal and an olive branch, and second-place winners got a bronze medal and a laurel branch. There were no awards for third place.
  • Baron Pierre designed the Olympic rings. The six colours, including the white background, were chosen because every nation’s flag contains at least one of them.
  • The first Modern Olympic event winner was James Connolly, who won the triple jump. He tried to take a leave of absence from Harvard University to attend but the school turned him down. So, the first Olympic award winner was a Harvard dropout.Gold medals were fully solid gold until the 1912 Olympics. Now they’re mostly silver. Gold medals must contain at least 6 grams of gold. Silver medals must be at least 92.5% silver. More than 50 nations have never won an Olympic medal.
  • The Winter Olympics were invented in 1924. Until 1992, the Winter and the Summer Olympics took place in the same year. Now they alternate every two years. Only six athletes have won medals in different events at both the Winter and Summer Olympics.
  • During the 1936 Berlin Games, two Japanese pole vaulters tied for second place. Instead of competing again, they cut the silver and bronze medals in half and fused the two different halves together so that each of them had a half-silver and half-bronze medal.
  • Sports that have been, but are no longer part of the Olympics include solo synchronized swimming (think about that for a minute…), tug-of-war, rope climbing, hot air ballooning, duelling pistol, tandem bicycle, swimming obstacle race, plunge for distance, and live pigeon shooting. And from 1912-1948, painters, sculptors, architects, writers, and musicians competed for medals in their respective fields.
  • Only 5 countries have sent athletes to every single Summer Games. They are Greece, Australia, France, Great Britain, and Switzerland.

Sources: mentalfloss, wikipedia.

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