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March 2024 reports, our Guide to Fixed Income and things we found interesting

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Hi ,

We had a strong month in March, with all our funds delivering positive returns. For the first time in quite a while, we saw signs of increased investor interest in a few of the unloved sectors of the market. This included the ASX Small Ordinaries Index outperforming the ASX 200 Index, positive signs in LICs and strong returns from the small resources sector. If these trend continue, it bodes well for all of our funds.

Should you wish to invest in any of our funds with us this month, applications close on 30 April for the Affluence LIC Fund, and 24 April for all other Affluence Funds. Go to our website and click “Invest Now” to apply online or access application and other forms for any of our funds.

Over the last few years, the most popular item downloaded from our website has been our Guide to Listed Investment Companies. This month, following the launch of the Affluence Income Trust, we’ve put the finishing touches on a new Guide to Fixed Income. You can find out more, and download the guide for free, from the link below.

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.

 

Affluence Fund Reports

 

Affluence Income Trust

The Affluence Income Trust returned 0.7% in March. The Fund pays monthly distributions. The current distribution rate is 7.5% per annum.

The cut-off for monthly applications and withdrawals is Wednesday 24 April.

March 2024 Fund Report

 

Affluence Investment Fund

The Affluence Investment Fund returned 2.2% in March. 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 Wednesday 24 April.

March 2024 Fund Report

 

Affluence LIC Fund

The Affluence LIC Fund returned 2.9% in March. The average NTA discount for the LIC portfolio at the end of the month remains near record highs at approximately 23%.

The cut-off for monthly applications and withdrawals is Tuesday 30 April.

March 2024 Fund Report

 

Affluence Small Company Fund

The Affluence Small Company Fund returned 2.4% in March. The largest positive contributors were the Samuel Terry Absolute Return Fund and Birddog Technology (BDT).

Available to wholesale investors only. The cut-off for monthly applications and withdrawals is Wednesday 24 April.

March 2024 Fund Report

 

Investment Profile – Revolution Asset Management

 

Each month we profile an underlying investment of one of our funds. The Revolution Wholesale Private Debt Fund II focuses on three different private credit sectors. The investment team have demonstrated their ability to preserve capital across multiple market cycles. Click below to find out why we like it.

 

Guide to Fixed Income

 

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Fixed income is a vast asset class. It includes everything from bank accounts and term deposits, to bonds, loans and complex securities. But all fixed income investments have one thing in common. They are designed to deliver a regular income.

We recently launched the Affluence Income Trust, which invests almost exclusively in fixed income assets. To assist in understanding what that means, we’ve put together a guide to fixed income. It’s designed to provide an introduction to the asset class, including:

  • Common characteristics of fixed income investments
  • Benefits of investing in fixed income.
  • Different types of fixed income investments.
  • Explanations of some common terms used in fixed income investing.

There’s also a summary of the many different ways you can access the sector, including through the Affluence Income Trust.

If you would like to learn more about the Affluence Income Trust, which targets monthly income of at least 3% above the RBA cash rate, the link to the Fund Page is below. Here you can access all the important information about the Fund, including our recent webinar, introductory presentation, performance to date, the PDS and TMD and the latest fund reports.

 

Things we found interesting

 

How would you invest $1 million?

Recently, we took part in an exercise with the Australian Financial Review where they asked a range of financial experts how they would invest $1 million. We had limited space to respond, so we concentrated on the one area we think currently offers the best risk adjusted returns, plus some of the more contrarian investment ideas right now. Our ideas included:

  • A range of fixed income funds, with a focus on private credit.
  • Aussie small and micro caps.
  • Listed investment companies.
  • Global gold miners.
  • China/Hong Kong large cap stocks.

All are represented, to varying degrees, in our Affluence Investment Fund portfolio. If you have an AFR subscription, the original article is available here.

Financial word(s) of the month: Efficient Market Hypothesis.

A theory believed only by financial economists. In theory, the market price is the best estimate at any time of what securities are worth. It immediately incorporates all the relevant information available, as rational investors dynamically update their expectations to adjust to the latest events.

In practice, investors either ignore new information or wildly overreact to it, regardless of how relevant it is. Even so, that doesn’t make beating the market easy, because you must still outsmart tens of millions of other investors without incurring excess trading costs and taxes. As behavioral economist Meir Statman puts it, “The market may be crazy, but that doesn’t make you a psychiatrist.”

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

Financial history lesson.

In April 1822, the merchant ship Cambria docked in New York harbour with a news flash. The Bank of England had lowered its interest rate from 5% to 4%. Bank stocks lost 14% of their value in two hours as Wall Street digested this latest news from London, which took two weeks to cross the ocean.

In April 1951, an economics student at Princeton University submitted his 123-page senior thesis, entitled “The Economic Role of the Investment Company.” He concluded, “future growth can be maximized by concentration on a reduction of sales loads and management fees.” The student, John C. Bogle, later takes matters into his own hands, founding Vanguard Investments in 1974. Today, Vanguard is the second largest investment manager in the world, behind BlackRock.

Source: jasonzweig.com

Vaguely interesting facts.

  • Passengers paid an estimated $1.2 billion last year for flights between Sydney and Melbourne, making it the highest revenue generating air route worldwide.
  • Astronauts grow taller in space than they are on Earth, because the weightlessness causes their spine to expand.
  • During WWII, couch maker La-Z-Boy manufactured seats for tanks, torpedo boats, gun turrets, and armored cars.
  • The 1967 Outer Space Treaty forbids any nation from trying to own the Moon.
  • Nike’s first shoe, created in 1972, had a sole made using a waffle iron. *

Source: mentalfloss.com

* While Nike co-founder Bill Bowerman designed several shoes, he is perhaps best known for ruining his wife’s Belgian waffle iron. Bill experimented with using waffle-ironed rubber to create a new sole for footwear that would grip but be lightweight. Bowerman’s design inspiration led to the introduction of the “Moon Shoe” in 1972, so named because the waffle tread was said to resemble the footprints left by astronauts on the Moon. Further refinement resulted in the “Waffle Trainer” in 1974, which helped fuel the explosive growth of Nike.

 

Thanks for reading. If you enjoyed this newsletter, forward it to a friend.

If you are that friend, you can subscribe and see previous newsletters here.

 

Got a question?

 

If you want to learn more about our Funds or invest with us, the buttons below will take you to the right places.

If you want to catch up on earlier versions of our monthly newsletter, you can view them here.

If you have a question, you can email or call using the details below, or simply reply to this email and we will be in touch with you as soon as we can.

 

 

 

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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. It does not purport to be complete, and it does not take into account your investment objectives, financial situation or needs. Prospective investors should consider those matters and read the Product Disclosure Statement (PDS) or Information Memorandum (IM) offering units in the relevant Affluence Fund before making an investment decision. The PDS or IM for each Affluence Fund contains important notices and disclaimers and important information about each offer.

As with all investments, an investment in any Affluence Fund is subject to risks. If these risks eventuate, they may result in a reduction in the value of your investment and/or a reduction or cessation of distributions. Distributions are not guaranteed, nor is the return of your capital. Past performance is not indicative of future performance. It is important that you know that the value of your investment will go up and down over time, returns from each Fund will vary over time, future returns may differ from past returns, and returns are not guaranteed. All of this means that you could lose money on an investment in an Affluence Fund. As set out in the PDS or IM for each Affluence Fund, key risks include concentration risk, economic and market risk, legal and regulatory risk, manager and key person risk, liquidity risk, leverage risk and currency risk. Affluence aims, where possible, to actively manage risks. However, some risks are outside our control.

This information and the information in the PDS or IM are not recommendations by Affluence or any of its officers, employees, agents or advisers. Potential investors are encouraged to obtain independent expert advice before making any investment decision.

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Affluence Funds Management
Level 22, 127 Creek St,
Brisbane, Queensland 4000
Australia

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