It's time to update the target portfolio again. The last time I posted about this was here I think. The main change is that it is getting harder to find good quality accessible hedge funds. Our allocation to Pershing Square Holdings (PSH.L) is 6.3% of net worth, so I don't really want to increase that. Regal Investment Fund (RF1.AX) keeps reducing the share of hedge funds in their allocation. Tribeca Global Resources (TGF.AX) and to some degree Cadence Opportunities(CDO.AX) have been poor performers. The L1 Long-Short Fund (LSF.AX) is a possibility, as it has outperformed RF1 over 5 years. It didn't perform well in 2023 and 2024, but is doing well so far in 2025.
Also, managed futures have done poorly in the latest crisis, though often they perform better after a crisis. So, we are cutting allocations to these asset classes and increasing the allocation to long-only shares. This also reflects that I am planning on allocating more to our employer superannuation funds - Unisuper and PSS(AP). We also suddenly have a lot of cash. Reasons for these two things will come in a later post.
The following does not include cash in our regular bank accounts, which is around 3% of total assets currently.
At the top level 60% is allocated to equity and 40% to other.
Equity: 27.5% long-only, 20% private equity, 12.5% hedge funds.
Long-only: 10% Australian large cap, 5% Australian small cap, 8% US, 4.5% ROW.
Private equity: 10% venture, 10% buyout, SPACs etc.
We will try to balance private equity and hedge funds between Australian and foreign too.
Other: 15% real assets (real estate, art etc.), 10% gold, 7.5% futures (managed futures, bitcoin, direct futures, cash in trading accounts), 7.5% fixed income (bonds and private credit).
At the moment we are overweight gold, cash (classified as futures), and private equity, and underweight the other asset classes.
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