Friday, May 03, 2019

April 2019 Report

In April the Australian Dollar fell from USD 0.7096 to USD 0.7047. The MSCI World Index rose 3.18% and the S&P 500 3.72%. The ASX 200 rose 3.36%. All these are total returns including dividends. We gained 0.95% in Australian Dollar terms and 0.26% in US Dollar terms. Our currency neutral rate of return was 0.91%. The target portfolio gained 2.37% in Australian Dollar terms and the HFRI hedge fund index 1.57% in US Dollar terms. So, we under-performed our benchmarks.

Here again
is a detailed report on the performance of all investments:

The table also shows the shares of these investments in net worth. At the bottom of the table I also include the Australian Dollars return from foreign currency movements, other net investment gains and losses - net interest and fees, and trading Bitcoin futures. Trading income was USD 733 for the month, which at an annualized rate was roughly a 7.3% rate of return on capital.  At the asset class level, only real estate lost money this month. Australian small cap stocks were the best performing asset class.

Things that worked very well this month:

  • 3i, the UK private equity firm, and Generation Global shined. A few other funds beat the index. Tribeca bounced back from underperformance.
What really didn't work:

  • Cadence and Bluesky sucked. Cadence went ex dividend and I couldn't be bothered to account for this properly in my accounts, so it will do better next month when I receive the dividend. However, it fell by more than the dividend and falling in an up-market is not good. I'm still willing to give them the benefit of the doubt that they will come back again. Bluesky was probably affected by troubles at the manager, also known as Bluesky, and lack of certainty about Wilson Asset Management taking over as the new manager. 
  • I continue to be impressed by PSS(AP), where we are now in the balanced fund.
We moved away from our new long-run asset allocation * as we continued to accumulate bonds:

The main driver is continued movement of cash from my US bank account to Interactive Brokers where I am buying bonds before eventually transferring some of the money to our Australian bank accounts when the broker allows..... At the end of the month we bought 1/4 million Australian Dollars by transferring money from Falafeland. This means that we will buy new US bonds for a few months as the current ones mature rather than changing the proceeds into AUD immediately as the plan is to buy about AUD 50k per month. After the month end, I immediately made an AUD 90k non-concessional (after tax) contribution to superannuation. As I plan to roll over my retail super fund into a self-managed super fund after the start of the new financial year in July, I invested the money in the CFS Wholesale Conservative Fund.

On a regular basis, we also invest AUD 2k monthly in a set of managed funds, and there are also retirement contributions. Then there are distributions from funds and dividends. Other moves this month:

  • USD 69k of corporate bonds matured (Royal Bank of Canada)  or were called (Goldman Sachs) and I bought USD 275k of USD bonds (Tokio Marine, Anglogold, General Motors, CNO, Scorpio Tankers, Woolworths, Safeway, and Hertz). There is still more than USD 100k to convert into bonds. I also bought 245 more shares (net) of CBAPH - Commonwealth Bank hybrid securities.
  • I did some unsuccessful trading of gold futures and then bought 1000 more (net) shares of IAU - a gold ETF.
  • I did some successful trading of Bitcoin futures.
  • I sold my remaining shares in PIXX.AX and bought a small amount of OCP.AX at $1.98 a share.
* Total leverage includes borrowing inside leveraged (geared) mutual (managed) funds. The allocation is according to total assets including the true exposure in leveraged funds. We currently don't have any leveraged funds.

1 comment:

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