June 2025 Report

I waited for all investment returns for the financial year to be in before posting this report, though, in the end, it didn't make much difference. In June, the Australian Dollar rose from USD 0.6431 to USD 0.6559 meaning that USD investment returns are better than AUD investment returns. Stock markets rose (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): 4.53%

S&P 500: 5.09%

HFRI Hedge Fund Index: 2.36%

Australian Dollar Benchmarks

ASX 200: 1.47%

Target Portfolio: 1.95%

Australian 60/40 benchmark: 1.79%

We gained 0.68% in Australian Dollar terms or gained 2.68% in US Dollar terms. So the only benchmark we beat was the HFRI. We under-performed the target portfolio because our returns for private equity and US stocks were a lot below the benchmark returns.

Here is a report on the performance of investments by asset class:

The asset class returns are in currency neutral terms as the rate of return on gross assets and do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. All asset classes but gold and Australian small cap had positive returns with the strongest rate of return and the largest contribution from Australian large cap.

Things that worked well this month:

• More than AUD 10k gain: Unisuper (19k), Regal Investment Fund (RF1.AX, 12k), Australian Dollar Futures (10k). Also at all time high profits:  PSS(AP) (9k for the month), CREF Social Choice (7k), Acadian (6k), WCM Global (WCMQ.AX, 2k), CFS Imputation (2k).

What really didn't work:

• Gold (-14k). At all time low profits: WAM Capital (WAM.AX, -1k).

Here are the investment performance statistics for the last five years:

The top three lines give our performance in USD and AUD terms, while the last three lines give the same statistics for four benchmarks. This month, we have added the Vanguard 60/40 ETF portfolio to the set of benchmarks. The middle block gives our performance relative to the indices. 

These are now measured from the end of June 2020. Our alpha relative to the ASX200 fell to 3.0% with a beta of only 0.48. We still have much lower volatility, resulting in a information ratio of 1.41 vs. 1.09. We capture much less of the downside moves than the upside moves in the market. We also have very good performance relative to the Vanguard 60/40 portfolio with the same volatility but almost 4% p.a. more return. But as we optimize for Australian Dollar performance, our USD statistics are much worse. We do beat the HFRI hedge fund index in terms of return, but at the expense of much higher volatility. Our USD volatility is at least less than that of the MSCI index, but our return is more than four percentage points lower.

We moved towards our target allocation as I again tweaked the allocation. Our actual allocation currently looks like this:

About 65% of our portfolio is in what are often considered to be alternative assets: real estate, art, hedge funds, private equity, gold, and futures. A lot of these are listed investments or investments with daily liquidity, so our portfolio is not as illiquid as you might think.

We receive employer superannuation contributions every two weeks. We make an annual concessional contribution to Moominmama's superannuation to reach the annual cap on contributions. We contribute USD 10k each quarter to the Unpopular Ventures Rolling Fund and less frequently there will be capital calls from Aura Venture Fund II. I am now receiving TTR pension payments from both Unisuper and our SMSF and contributing more than the total of these back to my superannuation accounts. (around AUD 4k net contribution per month). I made the following additional moves this month:

• Closed investments in Generation Global and Aspect Diversified Futures and switched the money to the Acadian Global Long Short Fund.
• Invested USD 2,500 in a syndicated start up at Unpopular Ventures. In my reporting, all these small investments are reported together with the UV Rolling Fund. Similarly, individual paintings I invested in at Masterworks are all reported together, as are individual property investments at Domacom.
• Sold 1,000 shares of James Hardie (JHX.AX) closing this trade for about an AUD 600 loss.
• Bought 500 shares of the gold ETF (PMGOLD.AX). 
• Net sold 3,250 shares of WCM Global Quality (WCMQ.AX). 
• Bought AUD 45k of the First Sentier Imputation Fund.