July 2026 Report

The Australian Dollar rose from USD 0.6909 to USD 0.7024. So, our Australian Dollar returns are a lot lower than USD returns. World stockmarkets were flat, while the Australian market rose.

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

US Dollar Indices

MSCI World Index (gross): 0.10%

S&P 500: -0.06%

HFRI Hedge Fund Index (forecast): 0.08%

Australian Dollar Benchmarks

ASX 200: 2.26%

Target Portfolio (forecast, depends on HFRI): -0.11%

Australian 60/40 benchmark: -0.23%

In Australian Dollar terms we gained 0.60% and in US Dollar terms 2.28%. We outperformed all benchmarks apart from the ASX200. The target portfolio has more or less flatlined since September last year as the Australian Dollar rose and more recently gold fell:

I've been through a bit of excess volatility, peaking in January. Until this month the ASX200 has also been going sideways:

You'll notice that even the S&P 500 doesn't look as spectacular in the last couple of years when converted to Australian Dollars! The SMSF returned -0.36%, beating Unisupe, which lost 0.59%. But PSS)AP) was up 0.63%. 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 month was the reverse of last month: private equity and futures led the way. Rest of world stocks had the worst rate of return and hedge funds detracted the most.

Things that worked well this month:

• 3i (III.L) and Australian Dollar futures gained AUD 10k or more, with the former gaining AUD 33k and the latter 10k.

What really didn't work:

• Tribeca Global Resources (TGF.AX) lost AUD 26k.

Our distance from our target allocation increased very slightly. Our actual allocation currently looks like this:

Almost 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, which going forward will total AUD 6,750 per month. I was very busy investing this month, making the following moves:

• I invested a total of USD 6,000 in four new startups on Angellist. They cover the defence, biotech, education, and real estate sectors.
• I bought a total of 7,500 shares in the Monochrome Bitcoin ETF (IBT.AX). That amounts to 0.75 bitcoins. I also bought 5,000 shares of ProCap Financial (BRR), which is mostly a bitcoin treasury company.
• I sold 5,000 shares of Cadence Opportunities (CDO.AX), 11k shares of Hearts and Minds (HM1.AX), and 2,500 shares of Treasury Wine Estates (TWE.AX)–the money to buy bitcoin has to come from somewhere.
• I bought another 5,000 shares of Regal Partners (RPL.AX). Still don't understand why this seems so undervalued.
• I bought another 500 shares of the Alerian MLP ETF (AMLP).
• I sold 6,000 shares of the gold ETF PMGOLD.AX as part of the "restructure" as well as buying 30k shares of the L1 Gold Fund (LGF.AX) and opening a gold futures position in the SMSF and closing the AUD futures position in the SMSF. We still have AUD futures in our personal IBKR accounts.
• I bought 1.25m shares of the US Residential Fund (URF.AX) using the margin freed up by the restructure.
• I sold all our position (110k shares) in WAM Capital (WAM.AX) and replaced it with WAM Active (WAA.AX, 150k shares).
• Finally, I started selling covered calls on our Treasury Wines position (TWE.AX). 

Here are the income and spending accounts * for this month ($ is Australian Dollar):

TABLE FROM MONTHLY ACCOUNTS

Other income includes Moominmama's salary and net employer superannuation contributions but also the tax paid by the SMSF. Spending was high this month–AUD 29k, the third highest ever in nominal terms–due to paying school fees, a big dollop of depreciation recorded on our old and new cars, and the stamp duty and insurance on buying the new car. I opted to again insure our car rather than just insure against damaging other cars.  This number does not include our mortgage payments, which are regarded here as saving and investment costs and saving. Dissaving amounted to $23k, which is at the 4% rule limit of AUD 23k. We gained $41k investing. There was only $645 this month in tax credits and implicit tax on our employer super, which are included in pretax investment returns but have to be deducted to get to the change in net worth. But there was a big transfer to superannuation as I carried out the "restructure". Net of my pension payments it was around AUD 90k. As a result of all this, net worth rose by AUD 17k to AUD 8.261 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.

June 2026 Report

The Australian Dollar fell from USD 0.7185 to USD 0.6909 and gold fell steeply. International stock markets lost a little and the Australian market still managed to underperform in USD terms, though it gained in AUD terms. The following results are preliminary–we won't get venture and art results for a while.

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

US Dollar Indices

MSCI World Index (gross): -0.77%

S&P 500: -0.95%

HFRI Hedge Fund Index (forecast): -0.16%

Australian Dollar Benchmarks

ASX 200: 0.73%

Target Portfolio (forecast, depends on HFRI): -0.03%

Australian 60/40 benchmark: 1.36%

In Australian Dollar terms we gained 0.51% and in US Dollar terms we lost 3.35%. The only benchmark we outperformed was the target portfolio. The SMSF also underperformed, losing 0.67% while Unisuper gained 2.05% and PSS(AP) 2.23%. Why did the target portfolio have weak performance this month? Gold detracted 0.82% of return and venture capital 0.84%. If we add those two back, the return would be 1.63%, which is between the ASX 200 and MSCI (AUD) returns. We outperformed the target largely due to not experiencing those negative venture returns.

Australian superannuation funds report performance for the Australian financial year which ends on 30 June. For this period, the SMSF gained 12.2% (pretax), Unisuper, 8.9%, and PSS(AP) 11.3% (estimated pretax). So, we beat both benchmarks.

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. Gold and futures lost a lot and private equity a little. All other asset classes gained with rest of world stocks having the highest return and Australian large cap, hedge funds, and US stocks each contributing about a quarter of a percent of returns.

There was a lot of dispersion of returns, with lots of big winners and big losers. Things that worked well this month:

• Eight investments made AUD 10k or more: L1 Global Long-Short (GLS.AX, 49k), Acadian Global Long-Short (24k), Unsiuper (17k), 3i (III.L, 16k), Regal Investment Fund (RF1.AX, 14k), PSS(AP) (11k), Regal Partners (RPL.AX, 10k), and WCM Global Quality Active ETF (WCMQ.AX, 10k).

What really didn't work:

• Five investments lost more than AUD 10k: Gold (-59k), Pershing Square Holdings (PSH.L, -40k), Australian Dollar Futures (-30k), Pengana Private Equity (PE1.AX, -22k), Tribeca Global Resources (TGF.AX, -22k).

Our distance from our target allocation increased a little. Our actual allocation currently looks like this:

Almost 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. We also make monthly concessional contributions to Moominmama's superannuation to reach the annual cap on contributions. 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 5,150 per month. I made the following other moves this month:

• I did invest in five new startups via Angellist! So, I was busy reading all the investment memos and pitch decks of companies I didn't end up investing. One of the startups is a secondary sale of Polymarkets shares, which is a private company, but beyond the startup phase.
•  I sold 10k Regal Investment Fund (RF1.AX) shares and bought 20k Pengana Private Equity (PE1.AX) shares, which were undervalued after the SpaceX IPO. SpaceX is their biggest holding. My theory, is that people investing in Pengana's new AI fund, may have been sellling their PE1 shares.
• I bought 1k shares in Metrics Opportunities (MOT.AX)–a listed private credit fund. 
• I bought 17.5k shares of Treasury Wine Estates (TWE.AX). 
• I sold 50 Berkshire Hathaway shares and 1,000 ASX 200 ETF (IOZ.AX) shares to fund it. 
• I bought 30k shares of the L1 Gold Fund (LFG.AX). 
• I added to some of my trading positions at Masterworks after another painting realization.
• I bought a few additional shares of one of the NDIS properties I am invested in at Assetora using accumulated investment income there. 

As you can see, while we have so much cash in our offset account, I am tending to still reinvest some of our investment income.

 Here are the income and spending accounts * for this month ($ is Australian Dollar):

Other income includes Moominmama's salary and employer superannuation contributions but also the tax paid by the SMSF. Other retirement number is negative this month because I submitted a  "Notice of Intent" to claim a tax deduction to Moominmama's employer super fund, which triggered 15% tax on the $22.5k of voluntary contributions I had made this year to it. Moominmama bought a new laptop for $2197, which her employer reimbursed–it is counted both in other income and spending. So, spending was a bit higher this month. This number does not include our mortgage payments, which are regarded here as saving and investment costs. Dissaving amounted to $8k, which is way within the 4% rule limit of AUD 23k. We gained $35k investing, mostly from retirement accounts and all because of the fall in the Australian Dollar. We got an estimated $8k in tax credits and implicit tax on our employer super, which are included in pretax investment returns but have to be deducted to get to the change in net worth. As a result of all this, net worth rose by AUD 19k to AUD 8.246 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. Other income is non-investment income including salaries, employer superannuation contributions, net tax returns 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.

Interactive Brokers Customers Beat the S&P500 in 2025

 

Both individual and hedge fund clients beat the index. On average individuals made 19.2% vs. 17.9% for the index. We made 18.1% overall in USD terms. Interactive Brokers' hedge fund clients made 28.9%!

May 2026 Report

International stock markets gained, but the Australian market lagged, presumably in response to the tax changes. The Australian Dollar was little changed moving from USD 0.7179 to USD 0.7185. Gold fell in USD terms. Here is the performance of our benchmarks (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): 5.21%

S&P 500: 5.26%

HFRI Hedge Fund Index (forecast): 1.50%

Australian Dollar Benchmarks

ASX 200: 1.34%

Target Portfolio (forecast, depends on HFRI): 2.56%

Australian 60/40 benchmark: 2.92%

We underperformed all our benchmarks by a lot. In Australian Dollar terms we gained 0.44% and in US Dollar terms we gained 0.53%. This barely covers inflation. The SMSF also underperformed gaining 0.43% while Unisuper gained 2.26% and PSS(AP) 2.31%.

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 do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. Gold, futures, and private equity lost money but all other asset classes gained. Hedge funds were the best performer and greatest contributor. 

Why did we underperform the target portfolio? The most important reason is that we had a -0.15% contribution from private equity while the target benchmark had a 1.84% contribution. If the target portfolio had lost 0.15% on private equity instead, it would have returned only 0.57% overall. As we will see below, 3i was a major detractor, and we just don't have consistent wins on our venture portfolio yet. This is the J-curve curse. If and when we do have consistent returns–returns are actually positive already– they'll report with a long time lag too.  

Things that worked well this month:

• Six investments gained AUD 10k or more: Tribeca Global Resources (TGF.AX, 44k), Unisuper (18k), PSS(AP) (14k), Pengana Private Equity (PE1.AX, 13k), Acadian Global Equity Long-Short (13k), and Regal Partners (RPL.AX, 10k). Our industry/public sector super funds were nice diversifiers this month.

What really didn't work:

• Three investments lost AUD 10k or more: L1 Global Long-Short (GLS.AX, 27k), 3i (III.L, 22k), gold (14k).

Our distance from our target allocation very slightly narrowed. Our actual allocation currently looks like this:

Almost 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. We also make monthly concessional contributions to Moominmama's superannuation to reach the annual cap on contributions. 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 5,150 per month. I got a bit more active in the market, making the following investment and trade moves this month:

• We received a large value of distributions this month. AUD 20k from URF.AX, AUD 24k from Aura VF2, 3k from Aura VF1, and more than AUD 10k including the franking credit from WAM Capital. The first of these largely went to paying our SMSF's tax bill of AUD 16k after the annual accounts were finalized. The Aura payments were a welcome boost to our offset account, which is currently at just below AUD 300k:

• I made three investments (USD 2k each) in startups on Angellist. These were my first investments that were not with the Unpopular Ventures syndicate. Two of them are in the medical/health field.
• I sold 20k shares of Tribeca Global Resources (TGF.AX) around the recent price peak. This reduced our margin loan back towards the level I fixed at a constant interest rate.
• I sold 2k shares of the ASX 200 ETF, IOZ.AX. I think I was just getting bored of this! I used the money to:
• Buy 1,000 shares of ZIM again and 10k shares of Regal Partners (RPL.AX). ZIM has fallen since I sold and continued to fall since I rebought... There seems to be a lot of resistance in the government to approve the takeover by Hapag-Lloyd. On the other hand, businessman Haim Sakal has made a higher bid for the firm, though it doesn't seem to being taken very seriously. Regal just seems very cheap given the growth the firm is achieving. These helped us rebalancing as well.
• I also sold 10k shares of Pengana Private Equity (PE1.AX) as the price now seems to reflect the NAV including the expected value of SpaceX at its upcoming IPO. I bought 5k shares of Regal Investment Fund (RF1.AX) instead as it is trading below NAV.

Here are the income and spending accounts * for this month:

I just realised that I have been treating tax on employer superannuation contributions and tax on SMSF contributions asymmetrically and tax on superannuation earnings asymmetrically with tax on non-superannuation investment returns. I have been deducting contributions tax from contributions for employer super inside the "other income" category but all the tax paid on the SMSF, which includes contributions tax, has been relegated to "tax credit". Similarly, all tax paid on non-super investment returns has been in "Other income" but all tax paid on superannuation earnings is in "tax credit".

I think the solution is to deduct all the tax actually paid by the SMSF from other income, while leaving the tax credits received by the SMSF in "tax credit" obviously, but also all the imputed tax on employer super investment earnings will stay in tax credit because we never actually receive that money. The accounts above employ this new approach. This will give us a better picture of how we are performing relative to the 4% rule.

Other income includes Moominmama's salary and employer superannuation contributions but also the tax paid by the SMSF, which was AUD 16k this month.. It was a low spending month at AUD 6k, which is about the same as we spent in March. This number does not include our mortgage payments, which are regarded here as saving and investment costs. Dissaving amounted to AUD 18k, mainly because of the SMSF tax. This is still within the 4% rule limit of AUD 23k. We gained AUD 30k investing, all of which was in retirement accounts. We received a dividend from WAM Capital in the SMSF with associated franking credits this month. We also paid a lot of tax to the ATO from the SMSF. As a result of all this, net worth rose by AUD 6k to AUD 8.231 million. This is net worth is lower than that reported last month due to a fall in the estimated value of our house, where I use the same value for all months of the year.

* 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. Other income is non-investment income including salaries, employer superannuation contributions, net tax returns 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. 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. 

April 2026 Report

Markets rebounded this month, but they rebounded a lot less in Australia than in the rest of the world. This was partly because of a strong rebound in the Australian Dollar from USD 0.6880 to USD 0.7179. Gold fell a little in USD terms and quite a lot in AUD terms. Here is the performance of our benchmarks (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): 10.21%

S&P 500: 10.49%

HFRI Hedge Fund Index (forecast): 2.71%

Australian Dollar Benchmarks

ASX 200: 2.19%

Target Portfolio (forecast): 1.97%

Australian 60/40 benchmark: 2.44%

In Australian Dollar terms we gained 2.88% and in US Dollar terms we gained 7.35%. So we outperformed all AUD benchmarks and HFRI but underperformed relative to the two USD stock indices. Our SMSF gained 4.62%. Unisuper gained 4.49% and PSS(AP) 2.34%. So, we outperformed one of our superannuation benchmarks.

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 do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. Gold and Australian small cap lost money but all other asset classes gained. Futures were the best performer while hedge funds made the greatest contribution. 

Things that worked well this month:

• Nine investments gained more than AUD 10k: L1 Global Long-Short (GLS.AX, 42k), Unisuper (35k), Australian Dollar Futures (35k), Pershing Square Holdings (PSH.L, 19k), Acadian Global Long-Short (19k), PSS(AP) (15k), Pengana Private Equity (PE1.AX, 15k),  CREF Social Choice (11k), and Hearts and Minds (HM1.AX, 11k).

What really didn't work:

• Only three investments lost money with gold losing 28k.

We moved towards our target allocation. Our actual allocation currently looks like this:

Almost 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. We also make monthly concessional contributions to Moominmama's superannuation to reach the annual cap on contributions. 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 5,150 per month. I was again less active in the market, making the following investment and trade moves this month:

• I reinvested a distribution at Masterworks and invested USD 2k in another startup at Unpopular Ventures on Angellist. We are no longer subscribing to their rolling fund but will invest a little in promising startups that they syndicate.
• I sold 1,000 shares of PMGOLD.AX (10 ounces) and then bought back in again at a lower price, but not low enough, as the price has fallen more.
• I bought another 10k shares in WAM Alternatives (WMA.AX).

Here are the income and spending accounts * for this month:

Other income includes Moominmama's salary and employer superannuation contributions and totalled AUD 4k as usual. It was a big spending month at AUD 19k due to school fees. This number does not include our mortgage payments, which are regarded here as saving and investment costs. Dissaving amounted to AUD 15k, within the 4% rule limit of AUD 23k. We gained AUD 193k investing, 2/3 of which were was in retirement accounts. They performed better both on the way down and the way up from the March correction than our non-retirement accounts and are now higher than in February. We received lots of dividends with associated franking credits this month. As a result of all this, net worth rose by AUD 162k to AUD 8.309 million. We are about AUD 100k above the beginning of the year, but this is mainly due to the increase in the value of our house.

* 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. Other income is non-investment income including salaries, employer superannuation contributions, and net tax returns. Investment income is shown pre-tax. Tax credits include franking credits on Australian Dividends and imputed tax on industry superannuation returns and and actual SMSF tax. 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. 

Performance Update

I stopped reporting these five year performance figures in my monthly reports, but I'm still tracking them, and I've added the target portfolio to the list of benchmarks.

The top panel in the table shows our portfolio performance over five years of monthly data in AUD and USD terms. Due to the fall in the AUD over this timeframe, the AUD performance is better. Also, AUD performance is far less volatile, which is part of our portfolio design.

The middle panel shows our performance relative to the five benchmarks and the bottom panel the performance of the five benchmarks. The benchmarks are the MSCI All Country Index (Gross, USD), the ASX 200 Index (including estimated franking credits), the HFRI hedge fund index (fund weighted), a monthly rebalanced portfolio of two Vanguard ETFs - VDBA and VDGR, and the Target Portfolio. Alpha and beta are estimated in regressions of our excess returns relative to either the US Fed or the RBA interest rate on the excess returns of the benchmark. The MSCI and HFRI benchmarks are in USD and the other three in AUD.

Of course the two equity indices are more volatile. The typical hedge fund is very conservative actually with very low volatility. In risk adjusted terms hedge funds return more than the other benchmarks, which is shown by the information ratio. 

We have positive alpha and lower "downside capture" relative to the three AUD benchmarks. Relative to the Target Portfolio we have a beta or almost one - meaning that a 1% increase in the excess return of the Target Portfolio is typically associated with a 0.97% increase in the excess return of our portfolio. But we also actually have a positive alpha, which shows that active management beyond tracking the target adds value. 1.5% p.a. is worth around AUD 100k per year. Actually, given the composition of the Target Portfolio, it is impossible to track it passively, as there aren't hedge fund or private equity ETFs. You need to pick specific funds. 

March 2026 Report

This was a down month across most assets as the Iran War intensified. On the final day of the month, US markets and gold rallied, causing a timing issue that makes our portfolio performance look relatively worse. Our overall portfolio did not perform as designed and fell as much or more than the markets generally. However, our superannuation accounts did perform relatively well. As a a result I am fairly relaxed as we continue to receive pensions from superannuation and dividends from non-superannuation investments as well as having large cash buffers. The Australian Dollar fell from USD 0.7116 to USD 0.6880 meaning that USD investment returns are worse than AUD investment returns. Here is the performance of our benchmarks (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): -7.13%

S&P 500: -4.98%

HFRI Hedge Fund Index (forecast): -1.68%

Australian Dollar Benchmarks

ASX 200: -6.87%

Target Portfolio (forecast): -2.58%

Australian 60/40 benchmark: -4.64%

In Australian Dollar terms we lost 6.28% and in US Dollar terms we lost 9.39%. So we narrowly beat the ASX 200 but underperformed all other benchmarks. In dollar terms it was our worst month ever. We lost AUD 448k. The previous worst month was March 2020 when we were down AUD 316k. In USD terms we were down 476k vs. 331k during the COVID crash. The USD number is larger than the AUD in both cases because the Australian Dollar fell.

On the other hand, our SMSF lost 2.94%. Unisuper lost 2.68% and PSS(AP) 3.16%. So, we outperformed one of our superannuation benchmarks.

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 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 lost money. Hedge funds were the worst performer and the greatest detractor. Real assets performed least bad and detracted the least.

Things that worked well this month:

• Only six investments gained money with the Winton Global Alpha fund gaining the most at AUD 5k.

What really didn't work:

• Twelve investments lost more than AUD 10k and four lost more than AUD 50k! These were the L1 Global Long-Short Fund (GLS.AX), Tribeca Global Resources (TGF.AX), 3i (III.L), and gold.

We moved a little towards our target allocation. Our actual allocation currently looks like this:

 

Almost 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. We also make monthly concessional contributions to Moominmama's superannuation to reach the annual cap on contributions. 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 5,150 per month. I was less active than recently in the market, making the following investment and trade moves this month:

• I transferred USD 5,000 to Masterworks to buy shares of paintings on the secondary market just before they decided to shut down that market in its current form.
• I bought 5,000 shares of each of CD3.AX and MOT.AX in our SMSF.
• I bought 5,000 shares of Cadence Opportunities (CDO.AX) and 1,000 shares of the ASX 200 ETF, IOZ.AX in Moominmama's account. 
• I bought 1,000 shares of the gold ETF, PMGOLD.AX, in my account. 

Here are the income and spending accounts * for this month:

Other income includes Moominmama's salary and employer superannuation contributions and totalled AUD 4k. Spending was down to AUD 8k, which is what I'd expect in months without school fees. This number does not include our mortgage payments, which are regarded here as saving and investment costs. Dissaving amounted to AUD 4k, well within the 4% rule limit. However, we lost AUD 438k investing. As I noted a week ago, most of this was in non-retirement accounts: -358k, with "only" AUD 80k lost in retirement accounts. As a result of all this, net worth decreased by AUD 440k to AUD 8.152 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. Other income is non-investment income including salaries, employer superannuation contributions, and net tax returns. Investment income is shown pre-tax. Tax credits include franking credits on Australian Dividends and imputed tax on industry superannuation returns and and actual SMSF tax. 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. 

Intra-Month Portfolio Update

Currently our portfolio is down about 6.5% this month compared to the ASX 200 down 7.5%. The 60/40 benchmark is down 4.5% and the target portfolio only 3.1%. I am not too worried, as our SMSF is down only 2.4% and Unisuper 1.9%. These are the retirement accounts we are drawing a pension from. We have just over a year's worth of pension in cash in the SMSF and near two year's worth of spending in cash in our offset account.

The losses are concentrated in our non-retirement accounts, which are down 9.6%. Within those, gold is down sharply and the discount to NAV at several closed end funds has increased sharply, with Tribeca Global Resources (TGF.AX) "leading" the way.

February 2026 Report

The Australian Dollar rose from USD 0.6989 to USD 0.7116 meaning that USD investment returns are better than AUD investment returns. Stock markets mostly rose (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): 1.31%

S&P 500: -0.76%

HFRI Hedge Fund Index: 1.92%

Australian Dollar Benchmarks

ASX 200: 4.33%

Target Portfolio: 0.16%

Australian 60/40 benchmark: 1.27%

In currency neutral terms we gained 1.31%. But in Australian Dollar terms we lost 0.33% and in US Dollar terms we gained 1.48%. So we beat the USD stock index benchmarks but underperformed the AUD benchmarks and HFRI. Hedge funds are having a good performance patch. It was the first down month for the S&P 500 since April 2025! February is a seasonally negative month for both the S&P 500 and our own portfolio.

The target portfolio has been flat for several months now as the rise in the Australian Dollar and.a fall in venture capital offset gains in other asset classes:

The SMSF underperformed, losing 1.83%. Unisuper  returned 0.92% and PSS(AP) 1.37%. 

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 do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. Performance was very mixed with a huge rate of return for futures. Hedge funds slightly edged futures out in terms of contribution. Gold had the worst rate of return and detracted the most.

Things that worked well this month:

• Four investments made more than AUD 10k: L1 Global Long Short (GLS.AX, 26k), Tribeca Global Resources (TGF.AX, 22k), Australian Dollar Futures (14k), Winton Global Alpha (11k). Eleven investments hit new high profit marks including GLS, TGF, and Winton. For TGF the previous peak was in 2022. Cadence Opportunities hit a new peak, with the previous peak in 2021!

What really didn't work:

• Three investments lost more than AUD 10k: Pershing Square Holdings (PSH.L, 24k), gold (15k), and Regal Investment Fund (RF1.AX, 15k). Because of timing issues, the price of the PMGOLD gold ETF fell, while the price of gold rose in US Dollar terms for the month. This wasn't because of the rise in the Australian Dollar. The USD price of gold when converted into AUD rose from AUD 7,000 to AUD 7,413! Ratherm there was a 9% fall in the USD price of gold on the last day of January. But the ASX closed before that happened.

We moved towards our target allocation. Our actual allocation currently looks like this:

 

About 68% 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. We also make monthly concessional contributions to Moominmama's superannuation to reach the annual cap on contributions. 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 5,150 per month. I made non-concessional contributions of AUD 30k Unisuper and AUD 20k to our SMSF. I am thinking to max out the total possible contributions before I probably hit the transfer balance cap at the end of this financial year and can't make any further non-concessional contributions. There is a twist that complicates things. The transfer balance cap is expected to be raised by AUD 100k next year. I was very active in the market, making the following investment and trade moves this month:

• I bought 5k shares of Regal Partners (RPL.AX) on a dip.
• I bought 10k shares of Hearts and Minds (HM1.AX) on the same dip in the market. 
• I bought 4k shares of WAM Capital (WAM.AX) to round out our position to 110k. This was funded really from the gain in our Australian Dollar Futures. When futures rise, the cash in your account increases and vice versa...
• I bought 10k more shares of Cadence Opportunities (CDO.AX). 
• I did two profitable trades in gold and used the proceeds to buy 5k shares of Wilson Alternative Assets (WMA.AX). This should help rebalance our portfolio a little towards real assets. Then I did an unprofitable trade in gold...
• I sold 50 shares of Berkshire Hathaway (BRK/B). I'm a bit disappointed that it is below where I bought it in last year's market correction. This helped rebalance our portfolio a little away from US stocks. 
• I sold 1,000 shares of the ASX 200 ETF, IOZ.AX. This helped rebalance our portfolio towards the target portfolio and together with the BRK/B sale fund the following: 
• I bought 2000 shares of ZIM. I was planning on this being a longer term trade, but I ended up getting out after one day!
• So, instead I bought 500 additional shares of Pershing Square Holdings (PSH.L). 
• I sold more than 23k shares of Regal Investment Fund (RF1.AX). The market price was near the NAV now.
• I then bought 350k shares of the US Residential Property Fund, URF.AX. They now say that they will try to sell all property by the end of the year. This should close the gap between NAV and the market price. Risk is that the Australian Dollar rises a lot in the interim reducing NAV. This also helped rebalance the porfolio.
• I also bought just over 10k shares of the Cordish-Dixon Private Equity Fund III (CD3.AX). I liked the recent presentation on fund performance and think it is really undervalued. 
• I invested USD 3,750 in another start up with Unpopular Ventures.
• I made a new investment in 500 shares of the Alerian MLP ETF. This also helped rebalance towards real assets.

Here are the income and spending accounts * for this month:

Other income includes Moominmama's salary, a refund Moominpapa received and employer superannuation contributions. There was a larger than normal transfer into superannuation as I made the non-concessional contributions mentioned above. Spending was almost AUD 30k. This was the highest monthly spend since January 2015 when we bought our house and paid stamp duty! This was a high month due to school fees and a big "professional" expenditure by Moominpapa. As a result dissaving was AUD 23k for the month, which is just at the 4% rule limit. Because we lost AUD 24k investing, net income was AUD -18k. As a result of all this, net worth decreased by AUD 49k to AUD 8.608 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. Other income is non-investment income including salaries, employer superannuation contributions, and net tax returns. Investment income is shown pre-tax. Tax credits include franking credits on Australian Dividends and imputed tax on industry superannuation returns and and actual SMSF tax. 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. 

Bad Timing Switching Funds

In May last year, I switched from the Aspect Diversified Futures Fund to the Acadian Global Long Short Fund in our SMSF.* Since then Aspect has done very well:

I sold almost right at the bottom. It has gained more than 25% since then! What has Acadian done? It has risen a bit and then fallen:

Maybe a 3% gain :( The longer term performance has been really good though. If I had stuck to our target allocation, I would have kept Aspect and done better. I'm not going to switch back now. It's just as likely that Aspect falls again and Acadian continues its long term trajectory.

* The linked post talks about switching from Generation Global to Acadian. That was in another account. We switched to Acadian in two accounts. Generation rose about 12% after the switch but has now nose-dived to be down about 4%. So, that switch made sense.

Local Auction Boosts Our Estimated Net Worth

I went to the auction of a townhouse within my data catchment that I use to estimate the value of our home:

 

It sold for AUD 920k with two serious bidders. When I plug the number into my model, it boosts the value of our house by around AUD 250k, which seems crazy! As more data rolls in for this year, I think the estimated price will go down.

This was a popular TV show when I was in primary school:

 

That was worth a lot more back then.😀

More Good Venture Capital News

I recently reported that my investment in the Aura VF2 fund was now in profit. Now, our Angellist investments through Unpopular Ventures have swung into profitability too:

 

There is a 3 month lag in reporting values. We invest in their Rolling Fund as well as individual firms. One of those firms is now reporting that it is worth 9.5x the value I invested at. On the other hand, two companies I invested in have effectively gone to zero. While I am excited to not be losing money any more, our overall IRR on our Angellist investments is only 2.76% so far. 

But this is an AUD 60k bump in value that makes a substantive change to our numbers for 2025. It pushes up our 2025 rate of return to 9.68% in AUD terms or 18.14% in USD terms. That puts us just ahead of the S&P 500 for the year:

The "retirement number" rises to AUD 7.011 million. Total net worth at the end of the year Was AUD 8.252 million, which is comfortably ahead of the base case net worth projection of AUD 8.2 million. Also, the private equity return for the year roses to 9.3% from 4.7%! The annual contribution to total return from private equity was 1.8% instead of 0.9%. Unpopular Ventures returned AUD 40,118 for the year, making it our 8th best investment.

Annual Report 2025: Long-term Graphs

After looking over some of my previous annual report posts, I realised that I haven't posted long-term graphs of net worth in recent annual reports. I focused more and more on just the year under consideration. So, here is some longer term context that I used to include.

Here is net worth since 1996 and a breakdown into home equity, retirement accounts, and everything else: 

 

The big jump in 2018 is the inheritance. Non-retirement accounts have not increased that much since then as we moved money into home equity and retirement accounts. The next graph shows a breakdown of savings:

 

This graph is rather messy, which is maybe why I stopped posting it :) Retirement and non-retirement accounts are each split into savings and investment earnings. Non-retirement savings are negative because we moved money into home equity and retirement accounts. There was a jump this year when I received the redundancy payment. On the other hand, non-retirement profits are the largest component. This year saw a fall in home value and slow progress in retirement accounts as discussed in the first post in this series. But there were strong non-retirement earnings. Retirement accounts value is roughly 50/50 contributions and earnings at this point.

 

Annual Report 2025: Individual Investments

As promised, here are the individual investment results for 2025 (Australian Dollars):

Other costs and benefits like interest and fees and exchange rate gains and losses are not included here. I also don't go down to the level of the very small individual investments inside the Masterworks, Unpopular Ventures, and Domacom investments boxes.  

I also make no attempt to compute individual rates of return. My goal is to have twice as many winners as losers and to make at least twice as much on winners as I lose on losers. So, position sizing is part of the story. Based on that goal, I had more than enough winners, but only won slightly more on each winner as I lost on each loser. Without the two worst losers, I only lost $9.9k per loser. In the long term, my winning positions have gained more than five times as much as losing positions have lost. Of course, both Bitcoin and Defi Technologies gained more in the previous year than they lost in 2025. In the long run, these were winning investments.

Gold was the top performer this year, after coming in second last year. It was followed by two listed hedge funds and then the Aura Venture Capital Fund 2. Next came our two employer superannuation funds, each of which is 8-12% of our portfolio. The diversified Regal Investment Fund put in a good showing at 7th position. WAM Capital is a new investment I made during the April Tariff Tantrum. Australian Dollar Futures are paying off this year after being the worst performer last year. Finally in the top 10, CREF Social Choice is a balanced fund in my US retirement account (403b).

Annual Report 2025

All $ signs in this report indicate Australian Dollars. I'll do a separate report on individual investments. I do a report breaking down spending after the end of the financial year.

Overview 

Investment returns were positive and net worth again increased. My base case net worth projection was $8.2 million and we reached $8.192 million. In December we again travelled to China and this time Vietnam for the first time. I did some short business trips to Sydney and Brisbane during the year as well. My 61st birthday was in December and at the end of November I took a redundancy package from my employer and retired.

Investment Return

In Australian Dollar terms we gained 8.7% for the year while in USD terms we gained 17.1%. The big gap is because the Australian Dollar rose. The MSCI gained 22.9% and the S&P 500 17.9% in USD terms while the ASX 200 gained 11.9% in AUD terms. The HFRI hedge fund index gained 12.7% in USD terms. Our target portfolio gained 7.3% in AUD terms and the Vanguard 60/40 AUD benchmark returned 9.8%. So, we under-performed all benchmarks apart from the target portfolio and HFRI. But we didn't do that badly compared to the S&P 500 given we target a much lower volatility. The poor performance of the target portfolio was also due to the rise in the Australian Dollar.

This chart compares our portfolio to the benchmarks in Australian Dollar terms over the year:

 

It was actually a smoother ride in USD terms:

This was unusual as the Australian Dollar usually falls during stock market crises.

  

Here are annualized returns over various timeframes:

 

We beat the HFRI, the target portfolio, and the 60/40 portfolio over the last 5 and 10 years. Our performance over 20 years is still very weak, though it matches the HFRI.

 

Here are the investment returns and contributions of each asset class in 2025 in currency neutral and unlevered terms:

The contributions to return from each asset class sum to the total portfolio return. The portfolio shares are at the beginning of the year. Rest of the world stocks did worst, because of the performance of Defi Technologies, followed by futures, which includes bitcoin. Gold was the best performer followed by hedge funds and each made similar large contributions to the total return. Private equity was disappointing, in large part due to the fall in 3i near the end of the year, the shutdown of Kyte, and a disappointing earn out at IPS. A good result from Aura VF2 saved the day.

Investment Allocation

There were significant changes in asset allocation over the year:

 

We reduced exposure to futures = crypto (-12.8% of portfolio), RoW stocks = Defi Technologies (-4.3%), and real assets (-4.2%) over the year and increased exposure to all other asset classes and hedge funds, in particular (+7.7%).

Accounts

Here are our annual accounts in Australian Dollars: 

 

Percentage changes are for the total numbers. There are lots of quirks in the way I compute the accounts, which have gradually evolved over time. There is an explanation at the end of this post. 

We earned $440k after tax in salary etc. This grew massively due to the redundancy payment. Total non-investment earnings including retirement contributions were $473k, up 97% on 2024.

 

We gained (pre-tax including unrealized capital gains) $507k on non-retirement account investments. The rise in the Australian Dollar reduced those gains by $43k. We gained only $30k in retirement accounts with $32k in employer retirement contributions. Gold and hedge funds contributed strongly to non-retirement funds and retirement funds suffered from the crypto theme.

 

The value of our house is estimated to have fallen by $64k. As a result, investment gains totaled $472k and total income $945k.

 

Total spending (doesn't include mortgage payments, life insurance, margin interest etc.) of $158k was down 7% on last year.

 

$21k of the current pre-tax investment income was tax credits – we don't actually get that money directly so we need to deduct it to get to the change in net worth. We do receive some refund of franking credits in our annual tax returns, which count towards "Other income". We saved $289k from salaries etc. before making contributions of $74k to superannuation. I also record a $7k "inheritance", which is a gift we received on our trip to China. Current net worth increased by $701k.

Taxes on superannuation returns are just estimated because, though we know the tax paid by the SMSF, our employer superannuation funds only report after tax returns. I estimate the tax these funds paid to make retirement and non-retirement investment returns comparable. The total estimated tax on superannuation was $29k. Net worth of retirement accounts increased by $108k after the transfer from current savings. With the gain in the value of our house, total net worth increased by $745k.

Projections

Last year my base case scenario for 2025 was for an increase in net worth of $800k to $8.2 million, which we hit. For this year, my best case scenario is for an increase of $900k to $9 million. My bear case is for a decline to $7.5 million, which is roughly what we would expect if stock markets fell 20% assuming a beta of 0.5 and alpha of 5%. The Australian Dollar would likely fall in that scenario, boosting the Australian Dollar value of foreign investments.

Notes to the Accounts

Current account includes everything that is not related to retirement accounts and housing account income and spending. Then the other two are fairly self-explanatory. However, property taxes etc. are included in the current account. Since we notionally converted the mortgage to an investment loan, mortgage interest is counted in current investment costs. So, the only item in the housing account now is increases or decreases in the value of our house. This simplified the accounts a lot but I still keep a lot of cells in the spreadsheet that might again be used in the future.

 

Current other income is reported after tax, while investment income is reported pre-tax. Net tax on investment income then gets subtracted from current income as our annual tax refund or extra payment gets included there. Retirement investment income gets reported pre-tax too while retirement contributions are after tax. For retirement accounts, "tax credits" is the imputed tax on investment earnings which is used to compute pre-tax earnings from the actual received amounts. For non-retirement accounts, "tax credits" are actual franking credits received on Australian dividends and the tax withheld on foreign investment income. Both of these are included in the pre-tax earning but are not actually received month to month as cash.... 

 

"Saving" is the difference between "other income" net of transfers to other columns and spending in that column, while "change in net worth" also includes the investment income.

Where the Money Came From

I just updated this graph, which breaks net worth down into savings, inheritance, and investment profits. 

Savings are from salaries etc and tax returns as well as employer superannuation returns. Inheritance is self explanatory. Investment returns include franking credits and an estimate of the taxes paid by industry and public sector superannuation funds. Here I also include the increase in the value of our house. To get actual net worth, we need to subtract from the total tax paid by the SMSF, franking credits received by non-superannuation investments, and taxes paid by those large superannuation funds. These taxes currently sum to AUD 400k.'

Roughly one quarter of net worth is from savings, one quarter from inheritance, and half from investment returns. You can see the recent effect of the redundancy payment on savings on the bottom right.

It would make more sense to place profits as the bottom layer on the graph as they were negative during the dot-com crash and the GFC. But I think it is more instructive to see the steady rise in savings over time. Now of course, I expect it to go slowly down again as we dissave.