Thursday, October 05, 2006

Final Report for September

Investment Performance
Investment return in US Dollars was -0.77% vs. a 1.19% gain in the MSCI World Index, which I use as my overall benchmark and a 4.71% gain in the NDX which I use as a trading benchmark. The trading accounts lost 4.2%. Investing like a hedge fund should result in more stable returns than if I was a pure investor or pure trader. Total returns in terms of Australian Dollars were a gain of 1.14%. The best performer of the month was Mayne Pharma, which was subject to a takeover offer resulting in a gain of $A2330. The second best performer was the CFS Conservative Fund, my biggest single investment, with a gain of $A2186. The worst performer was QQQQ trading with a loss of $US1833.

Asset Allocation
At the end of the month the portfolio had a beta of -0.51 (a 1% rise in the market would result in a 0.51% decline in the portfolio). Assets were allocated as follows:

Asset Class:
Stocks Long 39.37%
Stocks Short -35.72% (QQQQ)
Put Options 1.39% (QQQQ)
Bonds 45.79%
Real Estate 4.94%
Hedge Funds 3.15%
Cash 50.04%
Loans -9.15%
Asset Loans 0.18%

Much of the cash is used as margin for the short position. Bonds are held via the CREF Bond Market Fund and the CFS Conservative Fund. 64% of net assets are deemed to be AUD related and 25% USD related with the remainder in global funds.

Net Worth Performance
Net worth declined by $US207 to $US330131 but in Australian Dollars gained $A9529 to $A442,421.

Income and Expenditure

As you can see total investment income was $US3197 before taking into account foreign currency fluctuations which resulted in a net investment loss of -$US2553. Expenditure was $US2054 - as usual living well within my means.

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