April 2023 Report

In April, stock markets continued to rise. The MSCI World Index (USD gross) rose 1.48% and the S&P 500 1.56% in USD terms, while the ASX 200 gained 2.03% in AUD terms. All these are total returns including dividends. The Australian Dollar fell from USD 0.6695 to USD 0.6605. We gained 1.09% in Australian Dollar terms but lost 0.45% in US Dollar terms. The target portfolio gained 1.98% in Australian Dollar terms and the HFRI hedge fund index is expected to gain 1.19% in US Dollar terms. So, we under-performed all benchmarks :(

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

The asset class returns are in currency neutral returns as the rate of return on gross assets. I then add in the contributions of leverage and other costs and the Australian Dollar to the AUD net worth return. We underperformed the target portfolio benchmark because of negative returns on international stocks and hedge funds, in particular. Our US stocks actually outperformed the S&P 500 this month.

Several asset classes made moderate positive contributions with private equity leading, while ROW stocks and hedge funds had negative returns

Things that worked well this month:

• Gold was the greatest gainer at AUD 9k, but several other investments gained between AUD 6-9k including Unisuper, 3i (III.L), Hearts and Minds (HM1.AX), Regal Funds (RF1.AX), Winton Global Alpha, WAM Alternatives (WMA.AX), and PSS(AP).
  

What really didn't work: 

• Tribeca Global Resources (TGF.AX) was again the biggest loser with a loss of AUD 14k. Followers up were: The China Fund (CHN, -8k) and Pershing Square Holdings (PSH.L, -6k).
  

The investment performance statistics for the last five years are: 

The first three rows are our unadjusted performance numbers in US and Australian dollar terms. The MSCI is reported in USD terms. The following four lines compare performance against each of the three indices over the last 60 months. The final three rows report the performance of the three indices themselves. We show the desired asymmetric capture, positive alpha, and higher Sharpe Ratio against the ASX200 but not the USD benchmarks. We are performing about 3.9% per annum worse than the average hedge fund levered 1.76 times. Hedge funds have been doing well in recently.

We are now very close to our target allocation. Our actual allocation currently looks like this:

About 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 invested USD 2,500 in a Latin-American start-up company through the Unpopular Venture Syndicate.
• I bought 5,000 more Cordish-Dixon 3 (CD3.AX) shares.