“… nearly all the grandest discoveries of science have been but the rewards of accurate measurement and patient long-continued labour in the minute sifting of numerical results.”
Lord Kelvin (a.k.a. William Thompson) – Eminent 19th Century Scientist
Like Lord Kelvin, Slack Investor likes to measure things. FY 2024 was another good year for share owners. In the world markets, the FTSE 100 Total Return Index was up 11.4% (last FY up 7.8%). Dividends helped the Australian Accumulation Index to be up 12.2% for the financial year (last FY +10.6%). The S&P 500 Total Return Index is again the top performer – and was up 24.2% (last FY +19.7%) for the same period. All of these Total Return Indices include any accumulated dividends.
Slack Investor has stuck to his strategy of investing with growing companies that have an established earnings record and forward P/E ratios <50 (Mostly!). I expect a bit of volatility in my (mostly “growth”) investment portfolio and I am reassured that, despite the odd negative year in the Slack Investment Portfolio , the dividends and the Stable Income portfolio are doing what they should and keeping Slack Investor with enough cash to “keep the wheels on” the Slack lifestyle.
Slack Portfolio Results FY 2024
All Performance results are before tax. The Slack Portfolio is Slack Investor’s investment portfolio and, due to some lucky stock selections (e.g. ALU and PME both doubled in value FY2024), this was my “best ever” year. I’m glad to report an annual FY 2024 performance of +39.4%. Full yearly results with Australian benchmarks are shown in the table below. However, the portfolio performance in the first 6 weeks of this new FY has brought me back to Earth. Slack Investor realises that only long term results really count.
For property values, Slack Investor is using the Total Return values supplied by CoreLogic. The Total Return is calculated from value change as well as the gross rental yield. I would have preferred calculations that include the net rental yield, but this will have to do. The Total Return is a more realistic figure when comparing real estate returns to stock market total returns, as it treats both asset classes as investments with income coming from rent/dividends.
Although it is hard to match US market growth this year (+24.2%). The Australian Share market Total Return Index (ASX200 Acc) was up 12.2%. The Vanguard Diversified Growth ETF (VDGR), comprising International shares (42%) and Australian Shares (28%), increasing by 11.4%. Inflation is again above Reserve Bank target – with the CPI at +3.8%. The readily available Cash rate of 4.0% has edged above inflation for the first time in 4 years. Cash is important but not a way to grow your investments.
Yearly Performance (%) results since 2010
The Slack Fund yearly Internal Rate of Return (IRR) vs BENCHMARKS. The Median Balanced Fund (41-60% Growth Assets), Vanguard Growth Fund, ASX 200 Accumulation Index, Corelogic Residential Property Home Value (Total Return) Index in both Brisbane and Melbourne, and Cash (Australian Super Cash Fund) and Consumer Price Index (CPI)
5-yr Average Annual Performance
Although I collect yearly figures, the 5 and 10-year compound annual performance gives me a much better idea about how things are really going. Long term results will smooth out any dud (or remarkable!) yearly figures. The Slack Fund is still ahead of most Benchmarks – but running “neck and neck” with Brisbane Residential real estate over a five-year period.
Growth of a $10000 Investment Since 2009
The beauty of compounding with a succession of good performance results can be seen in the chart below showing the growth of an initial investment in June 2009 of $10000.
Slack Fund has exceeded my expectations. Also, the chart shows that investing in either shares or residential property has been a solid way of growing your money over the long term.
10-year compound annual rate of return
The Slack Fund has been around a while and, I am generating some good long term data (10-year compound “rolling” annual rate of return). Over this time frame, the Slack Fund has been performing very well. A 10-year annual rate of return of over 15% – Go Slack Fund! The 10-yr data is shown below in chart and table form.
It is useful to note that, the 10-yr rates of return of the Median Balanced Fund, Vanguard Growth fund, ASX200, and residential property in Brisbane and Melbourne are also great long term investments. These appreciating assets generate a 10-year compound annual rate of return of 6-9% p.a.
From the figures below, although Cash can add stability to a portfolio, Cash as a long term investment, is a poor choice.
| YEAR | SLACK FUND | MEDIAN BAL | VGARD GROWTH | ASX200Acc | RES BRIS | RES MELB | CASH |
|---|---|---|---|---|---|---|---|
| 2019 | 15.6 | 8.0 | n/a | 10.0 | 5.8 | 8.5 | 2.9 |
| 2020 | 15.9 | 7.0 | n/a | 7.8 | 5.5 | 7.3 | 2.6 |
| 2021 | 17.9 | 7.4 | n/a | 9.3 | 7.5 | 8.3 | 2.2 |
| 2022 | 15.2 | 7.1 | 8.1 | 9.3 | 9.9 | 8.7 | 1.8 |
| 2023 | 14.4 | 6.4 | 7.4 | 8.2 | 8.6 | 7.6 | 1.7 |
| 2024 | 15.7 | 5.8 | 7.2 | 7.7 | 9.0 | 6.4 | 1.8 |
The Slack Fund average 10-yr compound yearly return vs BENCHMARKS in table form.