September 2024 Report

This was an average month in terms of investing activity. Spending fell steeply again to AUD 7.4k but it is going to be up strongly in October.

In September, the Australian Dollar rose from USD 0.6772 to USD 0.6913, so US Dollar returns are higher 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): 2.36%

S&P 500: 2.14%

HFRI Hedge Fund Index: 1.19% (forecast)

Australian Dollar Indices

ASX 200: 3.30%

Target Portfolio: 1.07% (forecast)

Australian 60/40 benchmark: 1.46%

We gained 1.65% in Australian Dollar terms or 3.76% in US Dollar terms. So we only underperformed the ASX200.

The SMSF returned 1.11% compared to Unisuper at 1.12% and also PSS(AP) at 1.12%. The fund went over AUD 1.4 million for the first time.

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 so the total differs from the Australian Dollar returns on net assets mentioned above. RoW stocks (mostly Defi Technologies) lost money, why all other asset classes gained. Australian small cap had the highest rate of return, while futures including bitcoin made the greatest contribution to overall return.

Things that worked well this month:

• Bitcoin gained AUD 28k and was followed by gold (24k), Tribeca Global Resources (TGF.AX, 17k), WAM Alternatives (WMA.AX, 15k), and Regal Investments (RF1.AX, 12k).
  

What really didn't work:

• Pershing Square Holdings (PSH.L) lost AUD 16k and Defi Technologies (DEFTF) lost AUD 14k.
  

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. Our performance fell back this month compared to the ASX200 but, as we have much lower volatility, we have a higher Sharpe ratio of 0.83 vs. 0.57. 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. We have a positive alpha relative to the ASX200 of 2.74% with a beta of only 0.46.

We moved towards our target allocation this month. We are most underweight cash and most overweight rest of the world stocks. 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 superannuation contributions every two weeks. 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 made the following additional moves this month:

• In addition to the quarterly contribution to the Unpopular Ventures Rolling Fund, I made an additional investment of USD 5k in Kyte and a new investment of USD 3.75k in another start-up.
• I sold 2,000 shares of PMGOLD, the Perth Mint gold ETF, and added to the cash pile in our offset account.
• I sold our remaining holding in the Longwave Small Australian Companies Fund.
  
• I did a trade in Clime Investment Management (CIW.AX) after Geoffrey Wilson recommended it.