For the three months to September 30, 2024, my taxable portfolio rose 7.14% and my SMSF rose 4.43%. My benchmark, the S&P/ASX 200 Franking Credit Adjusted Annual Total Return Index (Tax-Exempt), rose 9.12% over the same period.
During the quarter, I built up a position in Mitachi Sangyo (3321.T), a Japanese trading company focusing on electrical components. I have written up Mitachi on my Substack. In short, Mitachi is a net-net trading at 7x PE with a positive earnings outlook over the coming years.
The major event during the quarter was the closing of the Task Group/PAR merger. This was a very attractive situation and I had a very large position. Thankfully, it closed without issue and with only minor delays. Otherwise, I ended up selling my position in G&M Holdings (6038.HK). While the company is still cheap, the order book is the lowest in years and the operating environment remains difficult. G&M announced a whopping dividend, so I took advantage of the extra liquidity to exit my position.
Heading into Q4, I have a significant cash position in my taxable account of around 19%. The SMSF also has a significant cash position but I have a substantial tax bill due in May. As a result of the purchase of Mitachi and adding to some other Japanese stocks during the recent market volatility, I have a very large exposure to Japan at the moment. My exposure is through three stocks, which are in different industries but all at attractive valuations. As my portfolio's returns are in AUD, I will have significant exposure to the yen. While I don't try to predict forex markets, it seems to me that the Japanese yen is more likely to be undervalued than overvalued.
I'm hoping I can find some interesting ideas heading into Q4, ideally not in Japan. I'm especially looking for ideas that offer attractive returns that aren't correlated to the broader stock market, like the TSK/PAR trade.
August 3, 2017 | September 30, 2024 | Since July 1, 2024 | Since Inception | Annualised | |
G&W Portfolio | 1.0000 | 3.739 | 7.14% | 273.90% | 20.21% |
Benchmark (SPAX2F0) | 61,250.80 | 129,593.72 | 9.12% | 111.58% | 11.03% |
N.B. The returns for my SMSF are unaudited and are calculated net of all expenses and realised taxes (but not unrealised taxes).
August 4, 2021 | June 30, 2024 | Since July 1, 2024 | Since Inception | Annualised | |
G&W SMSF | 1.0000 | 1.8150 | 4.43% | 81.50% | 20.77% |
Benchmark (SPAX2F0) | 98,123.18 | 129,593.72 | 9.12% | 32.07% | 9.21% |
