Affluence Investment Fund

March 2015 Fund Update

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Fund Performance

To 31 March 20153 Months6 Months1 YearInception*
Affluence Investment Fund1.7%N/AN/A9.6%
Target Return (Inflation + 5%)1.9%N/AN/A7.6%

* Annualised

The portfolio increased in value by 1.7% during the March quarter, net of all fees and costs. Performance to date is equivalent to a 9.6% annualised return, well ahead of our target returns of 7.6%.

The Fund commenced investing on 1 December 2014. Initial investments were made into the Cromwell Direct Property Fund, Cromwell Australian Property Fund and the Phoenix Opportunities Fund. We currently have around 86% of the Fund’s capital employed in these investments.

All investments contributed positively to performance. The Direct Property Fund saw increases in the value of a key asset, the Australian Property Fund benefitted from continuing increases in listed A-REIT values and the Phoenix Opportunities Fund lagged the market but still delivered a positive return for the quarter.

The Fund’s investments are currently allocated 26% to Australian equities, 60% to listed and unlisted property and 14% in cash. However because a number of the funds we invest with are themselves carrying significant amounts of cash, the underlying cash exposure is approximately 43%. This reflects our philosophy of achieving reasonable returns with limited downside exposure and means the impact of any market correction on our portfolio should be less severe than, say, a portfolio constructed only of listed stocks.

Fund Investments

InvestmentClassPortfolio %
Cromwell Australian Property FundListed Property11%
Cromwell Direct Property FundUnlisted Property49%
Phoenix Opportunities FundEquities26%

The Fund aims to be fully invested by the end of this year, holding 15-25 investments in Australia’s best managed funds, providing a diversified exposure to various asset classes.

We anticipate making additional investments during the September quarter, subject to market conditions. During 2015 we are aiming to expand the Fund holdings into some offshore equities, a broader range of Australian equities, selected fixed interest investments and one or two strategies designed to cushion the Fund in market corrections.

We are currently looking at well over 200 potential investment opportunities for the fund across all asset classes. Some we have been monitoring for a year or more – others we have more work to do on.

We will continue to methodically work through these potential investments and select only those which we feel are the absolute best for inclusion in the portfolio.

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