June 2022 Report

With the final private asset valuations complete, I am ready to present the June accounts. I needn't have waited, as the share price of Aura VF1 only rose by one cent and Aura VF2's share price was constant.

World markets fell sharply with the MSCI World Index (USD gross) falling by 8.39% and the S&P 500 by 8.25%. The ASX 200 fell 7.72%. All these are total returns including dividends. The Australian Dollar fell from USD 0.7177 to USD 0.6900 increasing Australian Dollar returns and reducing USD returns. We lost 5.82% in Australian Dollar terms or 9.46% in US Dollar terms. The target portfolio lost 2.42% in Australian Dollar terms and the HFRI hedge fund index lost 3.08% in US Dollar terms. So, we under-performed all benchmarks apart from the ASX.

Here is a report on the performance of investments by asset class (currency neutral returns in terms of gross assets): 

Hedge funds were the worst drag on performance followed by leverage. Only gold and the Australian Dollar contributed positive returns. The total benefit of the fall in the Australian Dollar was greater as many foreign assets are denominated in Australian Dollars. This includes gold which we invest in through an Australian ETF PMGOLD.AX.

Things that worked well this month:

• Gold was the top performer (AUD 13k) followed by the China Fund (CHN) (9k), Winton Global Alpha (5k), and Aspect Diversified Futures (4k).
  

What really didn't work:

• Tribeca Global Resources (TGF.AX) lost an incredible AUD 86k :(. Regal Funds followed with -36k and PSSAP rounded out the bottom three with -18k.
  

We moved a bit nearer to our target allocation. Our actual allocation currently looks like this:

70% 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, monthly, or quarterly liquidity, so our portfolio is not as illiquid as you might think.

We receive employer contributions to superannuation every two weeks. We are now contributing USD 10k each quarter to Unpopular Ventures Rolling Fund and less frequently there will be capital calls from Aura Venture Fund II. In addition we made the following investment moves this month:

• I bought 5,000 shares of Regal Partners (RPL.AX). So far, this looks like a mistake.
• I bought 20,000 shares of Pengana Private Equity (PE1.AX).
• I bought 2,000 shares of Regal Funds (RF1.AX).
  
• I sold 2,000 shares of PMGOLD.AX, a gold ETF. I'm beginning to feel over-stretched. This move reduced our leverage a bit and reduced our most expensive debt (CommSec margin loan). It also pushed our gold allocation back to 10% of gross assets.
• I sold a net 988 shares of WAR. I moved the rest of the position from one account to another to avoid a margin call.