Our Australian fund has maintained its strong performance since my Q1 report. The returns below are annualised, except year to date (YTD). Frankly I’m a little surprised the Australian market hasn’t done better. Are you guys letting me win on purpose? While Australian investors have on average had poor returns the unhedged returns to international investors have been significantly better, at least on paper.

The first quarter of 2011 brought good returns for both our concentrated Australian fund and our less concentrated less focused upon American fund.
This month I decided to implement a NAV spreadsheet for our Australian fund. Until now I’ve been more focused on the field of play rather than the scorecard (shameless Munger plagiarism) and have been content with knowing year end returns.
While we are index agnostic and target an absolute long run return it is none the less pleasing to show the market a clean set of heals so early …

The Fusion Superannuation Fund is up 14% year to date, thanks in the main to strong performance by M2 Telecommunications and Biota. I have been increasing the funds cash position and now hold 12.4% in cash. Cash is an attractive option in Australia where safe 6% returns are easily available. The sales have predominately been in banks, ANZ was first out the door followed by Westpac.

While the Investometer chart shows large changes in both accounts this month the reality is I increased cash by 9% this month. As I commented the other day I’ve been selling down fairly to overvalued US stocks, notably FDX and II-VI, and buying undervalued Australian shares.

The growing account with regular cash flow is the SMSF I manage. Due to regular personal and employer contributions, the coming capital return from Biota and other dividends I’m happy maintaining a lower cash balance in the SMSF. If the market goes down I’ll have …

Invested levels didn’t change this month, but four calls sold raised cash near the short term peak.
The FI Fund briefly returned to positive territory during October. It was good to pop into the green and lets hope we see more of that soon.

A quick look under out SMSF and a Fusion Portfolio update.

The Fusion Investing Portfolio posted a small gain in August, though was resoundingly thrashed by the S&P/ASX 200 Index. The portfolio relative outperformance decreased from 16.7%, to 13.1%. Since inception the portfolio is down an absolute 9.9%.
The only transaction in August was the sale of STW.AX, the S&P/ASX 200 tracking fund at $40.95. STW.AX has risen since then and closed last night at $42.20. The sale dramatically increased the portfolio cash position, which now sits at 39.6%.

Last Update: Fusion Portfolio’s return to 31 July

The FI Portfolio increased its ASX200 outperformance to 16.7% during July.

The FI Portfolio continues to hold onto it’s outperformance over the ASX200.

Ultra Funds should only be used for short term investments, measured in days. Due to volatility these funds do not return the expected two times performance over longer periods.