September 2026 Report

After five up months, September was a down month. The Australian Dollar fell from USD 0.7164 to USD 0.6983. So, our Australian Dollar returns are higher than our USD returns. 

Here is the performance of our benchmarks (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): -1.08%

S&P 500: -0.35%

HFRI Hedge Fund Index: 0.08% (forecast)

Australian Dollar Benchmarks

ASX 200: -2.10%

Target Portfolio: 0.40% (forecast)

Australian 60/40 benchmark: -0.90%

In Australian Dollar terms we lost 1.52% and in US Dollar terms 4.01%. As a result we only outperformed the ASX 200 benchmark. The SMSF returned -2.64%, underperforming both Unisuper and PSS(AP) which lost 0.85% and 0.46%, respectively. Here is a report on the performance of investments by asset class:

The asset class returns are in currency neutral 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. All asset classes apart from futures and commodities lost money. Within futures and commodities, cryptocurrency and managed futures made positive contributions and Australian Dollar futures detracted. Hedge funds had both the worst return and detracted the most. However, the Acadian Global Long-Short Fund was one of the best performers this month. There is a lot of variability within these asset classes.

Things that worked well this month:

• We had 5 investments that gained AUD 10k or more : Silvia (SVIA, 21k), Bitcoin (18k), Acadian Global Long-Short (13k), L1 Gold Fund (LGF.AX, 10k), and ZIM (10k).

What really didn't work:

• We had 9 investments that lost AUD 10k or more: Gold (34k), Pershing Square Holdings (PSH.L, 27k), Tribeca Global Resources (TGF.AX, 26k), Regal Investment Fund (RF1.AX, 16k), 3i (III.L, 15k), Australian Dollar Futures (15k), L1 Global Long-Short Fund (GLS.AX, 14k), Pengana Private Equity (PE1.AX, 11k), and URF (10k).

Our distance from our new target allocation increased slightly. 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 3,000 in two startups on Angellist.  
• We continued to add to our "crypto basket" including 3,500 shares of IBTC.AX (= 0.35 bitcoin), around AUD 48k of QETH.AX (ethereum ETF), 3k shares of SVIA (fomerly BRR), and establishing a 50k share new position in Defi Technologies (DEFI.NE/DEFT), which we also invested in in the previous cycle. We now have 5.4% of net worth in this basket.
• We added another 1,000 ZIM shares. 
• We sold the following shares to fund this build up: 369 AMLP, 1,000 PBDC (whole position), 2,000 WCMQ.AX, 7,000 HM1.AX., and around 15k CDO.AX shares.
• I also sold 50k L1 Gold Fund (LGF.AX) shares after receiving 30k in the rights issue. This brought our CommSec margin loan down to AUD 43k. Given its high interest rate, I plan to use it for trading rather than long-term investment going forward. This is part of the "restructure".
• Continued to trade options on TWE.AX and did a couple of other stupid short-term trades that luckily didn't lose much money.

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 typical of non-school-fee months at AUD 8.2k. This number does not include our mortgage payments, which are regarded here as saving (principal) and investment costs (interest) but it does include depreciation on our car, which is a few hundred dollars a month now. We lost $111k investing. Retirement net contributions (Other income retirement) were $516. The transfer out of retirement is my pensions. Tax credits on non-superannuation accounts were $4k. As we report superannuation investment returns on an estimated pre-tax basis, the implicit tax ($386) needs to be deducted to get to the change in net worth.

Dissaving amounted to $4.3k, which is well within the 4% rule limit of AUD 23k.  

As a result of all this, net worth fell by AUD 119k to AUD 8.567 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.