June 2024 Report

I was dissatisfied with my investment return of only 5.69% last year and so decided to eliminate some of my boring funds and take on more risk. Well, this month we got a lot of intra-month volatility, so at least it wasn't boring!

In June, the Australian Dollar rose from USD 0.6650 to USD 0.6671 so US Dollar returns are slightly better than Australian Dollar returns this month. Stock indices and other benchmarks performed as follows (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): 2.26%

S&P 500: 3.59%

HFRI Hedge Fund Index: -0.20%

Australian Dollar Indices

ASX 200: 1.08%

Target Portfolio: 1.59%

Australian 60/40 benchmark: 1.04%.

We lost -0.51% in Australian Dollar terms or -0.19% in US Dollar terms. So, we underperformed 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 and so the total differs from  the Australian Dollar returns on net assets mentioned above. Returns varied radically across asset classes. Futures (including bitcoin) lost the most and detracted the most from total return. RoW Stocks gained the most (mostly due to Defi Technologies) and contributed the most to total return.

Things that worked well this month:

• Defi Technologies (DEFI.NE) was the top performer, gaining AUD 29k. The next three best were 3i (III.L, 11k), Pershing Square Holdings (PSH.L, 11k), and Unisuper (10k).
  

What really didn't work:

• Bitcoin lost AUD 45k and is one of the main reasons we underperformed this month. Tribeca Global Resources (TGF.AX) lost 13k.
  

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 results for three indices. Compared to the ASX200 we have a slightly lower average return but also lower volatility, resulting in a higher Sharpe ratio of 0.87 vs. 0.61. But as we optimize for Australian Dollar performance, our USD statistics are much worse and worse than either the MSCI world index or the HFRI hedge fund index. We do beat the HFRI in terms of return, but at the expense of much higher volatility. We have a positive alpha relative to the ASX200 of 3.45% with a beta of only 0.45.

We moved away a bit from our target allocation. We are most underweight private equity and futures and large cap stocks and overweight RoW stocks and hedge funds. 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. It was another busy month. We made the following additional moves this month:

• I sold 500 shares of 3i (III.L), which brought our invested capital close to zero.
  
• I sold 50k shares of Cadence Capital (CDM.AX). Another example of a boring fund, though in this case it is boring in practice, not theory. I added 18k shares of Cadence Opportunities (CDO.AX) instead, though recently it hasn't performed much differently to CDM.
  
• I sold 25k shares of Tribeca Global Resources (TGF.AX) and bought the same amount in a different account realising a capital loss. This has been a very underperforming fund since inception, with one good year, but I haven't given up yet.
• I sold 50k shares of the US Residential Property Fund, URF.AX.
• I sold 2k shares of WCMQ.AX.
• I sold 5k shares of Hearts and Minds (HM1.AX).
• I sold 7k shares of Platinum Capital (PMC.AX).
• I sold AUD 7.5k of the Longwave Developing Companies Fund. This was once CFS and then FS. The manager has changed now to Longwave. I plan to run down the holding in my wife's account to fund capital calls for venture capital funds and her retirement contribution for next year.
  
• I bought 1,000 shares of the gold ETF PMGOLD.AX.
• I bought 15k shares of Defi Technologies (DEFI.NE).
  
• I bought 7k shares of Regal Partners (RPL.AX). This hasn't turned out to be a good move so far.
• There were also some largely unsuccessful futures trades.