August saw volatility return to financial markets. Early in the month, global markets plummeted after being disappointed with a very minor negative US economic data point. Markets were down over 5% at one point, before recovering to end the month slightly higher. Our funds also had a mixed month, with two up and two down. Below, you can access monthly fund reports, as well as a profile of one of our Affluence Income Trust investments.
The cut-off for applications this month is Monday 30 September for the Affluence LIC Fund and Wednesday 25 September 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 October.
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 0.6% in August and has delivered 8.0% per annum since commencing. The Fund pays monthly distributions, and the current distribution rate is 7.5% per annum.The cut-off for monthly applications and withdrawals is Wednesday 25 September.
Affluence Investment Fund
The Affluence Investment Fund returned -0.6% in August. Since commencing, the Fund has returned 7.7% per annum, including monthly distributions of 6.4% per annum.The cut-off for monthly applications and withdrawals is Wednesday 25 September.
Affluence LIC Fund
The Affluence LIC Fund returned -0.3% in August and has delivered 11.0% per annum since commencement. At the end of the month, the average portfolio NTA discount remained high at 24%.The cut-off for monthly applications and withdrawals is Monday 30 September.
Affluence Small Company Fund
The Affluence Small Company Fund returned 0.7% in August. The largest positive contributors were ASX listed Midway Limited (MWY) and GDI Property (GDI).The cut-off for monthly applications and withdrawals is Wednesday 25 September.
Investment Profile
Each month we profile an underlying investment of one of our funds. This month, we’ve taken a look at another of the holdings in the Affluence Income Trust. The MA Secured Loan Series lends to highly qualified borrowers for real estate investment and development, with an extra feature that lowers the risk for the Fund even further.
What we look for in Fixed Income
The Affluence Income Trust now has just over a one year track record. We’ve fully built out the investment portfolio, with 18 investments providing access to literally thousands of underlying loans across a variety of different strategies and subsectors.In this article, we take a look at some of the key criteria we look at when choosing investments for the Fund.
What we look for in Fixed Income
Things we found interesting
Chart of the month.
This months graph shows changes in real household income, after the impacts of inflation. The black line shows the total change, which has been negative since mid 2022. The coloured bars show the main contributors to that change.
You can clearly see the impacts of higher inflation in the graph. Firstly, wages and other income have risen quite strongly over the past 2 years. That’s the good news. But these increases have been more than offset by three negative impacts. Inflation itself has eroded the spending power of that income quite substantially. Net interest income/payable has turned negative, showing the impact of higher interest rates on mortgages. Finally, we’ve seen decent increases on taxes. This is reflective of higher income, but also of “bracket creep”, where higher income means moving to a higher tax bracket and paying an increased percentage of tax.
Of course these figures are averages. For lower income earners, the impact has been even more pronounced, because a greater percentage of their disposable income is spent on mortgage payments and expenses such as electricity and groceries, where cost inflation has been much higher than average. And that’s why it’s important that inflation continues to come back to historical averages of 2-3%. We’re seeing some good news on that front, but we’re cautious inflation could reaccelerate in the next few years.
Financial word of the month.
Treasury
In ancient and medieval times, a storehouse where such treasures as gold, precious gems and currency were stored for safekeeping. In modern times, a Government department where gold and currency are spent, if not trashed.
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…
Ice Cutter
Before modern refrigeration, people needed some way to keep food cool for storage. Enter the Ice Cutter, who would cut ice from lakes and rivers. Ice cutting was considered a profession in the 1800s, and it was a dangerous job. They would use large saws to cut the ice into blocks, which they would then transport to homes and businesses. Ice harvesting generally involved waiting until approximately a foot of ice had built up in the winter. The ice would then be cut into long continuous strips and then cut again into large individual blocks for transport by wagon. A large operation would have a crew of 75 and cut 1500 tonnes a day. Eventually, it developed into a huge export industry for Scandinavian countries and North America. In the 1880s, New York City had over 1,500 ice delivery wagons.
With the advent of modern refrigeration by the 1920s, the profession quickly became obsolete.
Source: historydefined.net, Wikipedia
Vaguely interesting facts.
Astound your friends with these morsels of knowledge:
- When a man allegedly found a dead mouse in his can of Mountain Dew, Pepsi had an expert claim in an affidavit that the drink was so acidic it would have dissolved the mouse after 30 days.
- One of the world’s largest stockpiles of nuclear weapons is located at a U.S. Navy base near Seattle, which is partially defended by trained dolphins.
- In a study by the Smell and Taste Treatment and Research Foundation, the scent women found most attractive was candy mixed with cucumber.
- Scientists say that the best time to take a nap is between 2pm and 3pm, and for no longer than 20 minutes.
- On October 30, 1995, Canada came within 54,288 votes of splintering into multiple countries. *
* Residents of the French-speaking province of Quebec narrowly voted down a proposal to declare independence for the second time in 15 years. More than 93.5% of registered voters showed up to the polls, and the difference between “Yes” and “No” was less than the number of invalid or blank ballots, an outcome that raised more than a few suspicions on the losing side. Independence was strongly supported by older voters but resoundingly rejected by their younger counterparts.
Sources: mentalfloss, wikipedia.
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