We "crushed it" this month. It was our biggest monthly investment return in dollar terms so far. The previous best month was November 2024. Stockmarkets rose while commodities like gold and bitcoin skyrocketed as
the US government tried to suppress long-term interest rates. Gold, in particular, eased back at the end of the month after Kevin Warsh made a "hawkish" speech at Jackson Hole. The Australian Dollar rose from USD 0.7024 to USD 0.7164. So, our Australian Dollar returns are lower than our USD returns.
Here is the performance of our benchmarks (total returns including dividends):
US Dollar Indices
MSCI World Index (gross): 2.70%
S&P 500: 2.72%
HFRI Hedge Fund Index (forecast): 0.78%
Australian Dollar Benchmarks
ASX 200: 1.73%
Target Portfolio (forecast, depends on HFRI): 1.50%
Australian 60/40 benchmark: 0.72%
I marked up our Angellist investments based on the news from the general partner, though these gains may end up getting reassigned to another month. In Australian Dollar terms we gained 5.93% and in US Dollar terms 8.04%. As a result we outperformed all benchmarks. The SMSF returned 2.67%, beating Unisuper and PSS(AP) which gained 1.78% and 1.21%, respectively. Here is a report on the performance of investments by asset class:
The asset class returns are in currency neutral terms and gross asset terms and do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. This analysis shows that even without the private equity gains, which made the greatest contribution to returns, we did very well for the month, beating all benchmarks, as USD returns are around 2% higher than these currency neutral returns. This is our fifth positive month in a row now, since our worst loss ever in dollar terms in March.
Things that worked well this month:
- We had eight investments that gained more than AUD 10k: Angellist Investments (206k), Tribeca Global Resources (TGF.AX, 52k), Gold (50k), L1 Gold Fund (32k), Bitcoin (23k), Unisuper (15k), L1 Global Long-Short Fund (GLS,AX, 14k), and Pershing Square Holdings (PSH.L, 13k).
What really didn't work:
- We had two investments that lost AUD 10k or more: WAM Active (WAA.AX, 10k) and URF (10k).
Our distance from our new target allocation decreased. Our actual allocation currently looks like this:
Around 70% of our portfolio is in what are often considered to be alternative assets: real estate, art, hedge funds, private equity and credit, gold, and futures. A lot of these are listed investments or investments with daily liquidity, so our portfolio is not as illiquid as you might think.
Moominmama receives employer superannuation contributions every two weeks. There will still be capital calls from Aura Venture Fund II and III. I am receiving monthly pension payments from both Unisuper and our SMSF, totalling AUD 6,770 per month. I made the following moves:
- I invested a total of USD 5,500 in two startups on Angellist. One is a biotech and the other is a follow on investment in Chowdeck, the Nigeria-based delivery app.
- I bought 8,500 shares in the Monochrome bitcoin ETF (IBTC.AX). We now have 1.6 bitcoins worth. I also bought 2,000 more shares of ProCap Financial (BRR), which is mostly a bitcoin treasury company, and 500 shares of an Ethereum ETF (QETH.AX) or around 3.5 ETH.
- I sold c. 17k shares of Hearts and Minds (HM1.AX) to fund buying bitcoin.
- I sold 35k shares of WAM Alternative Assets (WMA.AX) mainly to reduce our margin debt. Next month, we will be participating in the L1 Gold Fund rights issue.
- I sold our remaining Berkshire Hathaway position.
- I bought another 1/4 million URF.AX shares.
- I bought another 2,500 ZIM shares.
- Our Treasury Wine Estates (TWE.AX) position was called away and afterwards I wrote puts to try to get paid to buy a new position.
Here are the income and spending accounts * for this month ($ is Australian Dollar):
Other income includes Moominmama's salary and net employer superannuation contributions but also the tax paid by the SMSF. Spending was quite low this month at AUD 8.5k even though this includes almost AUD 2k of depreciation recorded on our new car and we paid all the quarterly utility bills and body corporate fees (condo association). This number does not include our mortgage payments, which are regarded here as saving and investment costs and saving. We gained $410k investing. Retirement net contributions (Other income retirement) were negative as Moominmama's contributions were outweighed by SMSF taxes. The transfer out of retirement is my pensions. Tax credits were only implicit tax paid by our employer super funds. AS we report superannuation investment returns on an estimated pre-tax basis, the implicit tax needs to be deducted to get to the change in net worth.
Dissaving amounted to $7k, which is well within the 4% rule limit of AUD 23k.
As a result of all this, net worth rose by AUD 399k to AUD 8.687 million.
* Results are shown separately for retirement and non-retirement accounts as well as housing, which nowadays doesn't have much activity. The grey shaded rows are additional notes. Total investment income is split into investment income before exchange rate moves and the contribution of exchange rates. Current other income is non-investment income including salaries and net income tax returns, while on the retirement side it includes employer superannuation contributions minus superannuation contribution tax and all SMSF tax payments to the ATO. Investment income is shown pre-tax. Tax credits include franking credits on Australian dividends etc. in non-retirement accounts and the SMSF and imputed tax on industry superannuation returns. These are taken away from investment income to get changes in actual net worth. Inheritances include gifts from relatives. Saving is from non-investment income, transfers, and inheritances not investment income.
