Welcome to our monthly report. In financial markets, May was a repeat of April. And once again, each of our Funds delivered results that were better than markets. June so far has seen continued falls around the world.
At times like these, we often get asked whether it’s a good time to invest. We don’t try to predict where markets may go because we recognise that we have no idea. Nor does anyone else. But there are broadly two ways this can play out. We’re either at the start of what will eventually become a recession. In this case, markets will probably fall further and take quite a while to recover. The other possibility is that it’s not as bad as people fear, and markets will bottom sometime soon. Given that markets are undoubtedly quite a bit cheaper than they were six months ago, it could make sense to put some more cash to work if you have some. Since there’s no guarantees that markets won’t fall further, it also makes sense to hold a bit back in reserve, just in case.
The good news is that as markets continue to correct, we’re seeing more and more opportunities that we like. So much so, that we’ve decided to reopen our Affluence LIC Fund and Small Company Fund to new investors again, effective immediately. We’re seeing signs of stressed pricing for some LIC’s and we want to be ready to take advantage of it. As at 20th June, our Affluence LIC Fund Portfolio is showing an average 18% discount to NTA. And the ASX 200 is around 15% cheaper than it was late last year, so there’s much better value in those NTA’s as well. In smaller companies, the value is even more stark. The ASX Small Ords is down around 25% from it’s highs, and we’re seeing a wide range of attractive investments in the sector.
If you want to apply online or download application or withdrawal forms for any of our funds, go to the Invest page of our website. If you have any questions or want to give us some feedback, reply to this email or give us a call.
Daryl, Greg and the Affluence Team.