TiP Group Newsletter, April 2024

TIP Group News

Insights from Howard Coleman, founding member of Teaminvest

Discover how Teaminvest's unique approach to investing prioritises in-depth company analysis, collective insights, and a keen evaluation of management's quality - competence, motivation, and trustworthiness. These pillars support our mission to partner with businesses that value and maximise shareholder investment.

Dive deeper into our comprehensive strategy: Read the Full Letter

Retail Advisory

Breaking Free from the Work-Life Hamster Wheel in Your 40s and 50s

A Shift in Perspective

The post-pandemic era has ushered in profound changes, particularly for those of us in our 40s and 50s.

We're increasingly aware that life is fleeting. Our kids are getting older.

Our parents' version of success, living to work and tirelessly paying off a house, no longer appeals to us.

It's time to step off the work-life hamster wheel and start working smarter, not harder.

A Wake-Up Call

At 40, I'm reminded that the average Australian retires at 56, not at 65 or 67 as many believe.

This realization is a wake-up call. We have less time than we think to plan for a future where we're not just surviving but thriving.

Debt Recycling: A Path to Financial Liberation

Debt recycling is a strategy long used by the financially savvy, and it's high time more of us tapped into it. It's not just about making money work harder; it's about using the tax system to our advantage, much like the rich do. This approach is accessible and can be a game-changer for those willing to learn and apply its principles.

The Tree Analogy Revisited

Imagine your mortgage as a large, dormant tree in your backyard. It's stable and secure, but it's not contributing much else. Now, imagine transforming parts of this tree into fruit-bearing branches. This is what debt recycling does to your mortgage – turning a static, non-productive entity into an active, wealth-generating asset.

Case Study: Emily and David

Emily and David, a couple in their late 40s, chose to use their home equity to invest. This investment generated income and tax benefits. Instead of splurging, they used this income to reduce their mortgage. Over time, they not only decreased their mortgage but also built a substantial investment portfolio. By their mid-50s, they had achieved a balance that allowed them to step off the traditional work-life hamster wheel.

Why This Matters

• Efficient Wealth Growth: Emily and David transformed their mortgage into a wealth-building tool.

• Escape the Work-Life Cycle: They moved away from the traditional path of working full-time just to pay off a house.

A Balanced Approach

While debt recycling can be transformative, it's not without risks and requires a balanced, informed approach. It's crucial to get professional advice to understand if this strategy aligns with your financial situation and goals.

Is This Your Path to Financial Freedom?

If you're seeking to escape the traditional work-life cycle and make your financial resources work more effectively for you, debt recycling might be the strategy you need.

Contact our Retail Advisory Team: Retail Advisory

Mortgage Broking

Interest Rates Australia

There is a lot of discussion around interest rates with economists and others split as to whether the RBA will increase or cut rates in the near term.

In the recent RBA minutes, the central bank pondered whether a rate hike was needed due to “upside risks of inflation” but decided to hold rates steady.

As mentioned above, the Q2 inflation rate will affect the August interest rate decision. Together with recent retail sales growth and stubborn inflation this combination further strengthens the case for a hike this year and possibly in August.

Economic Update

Market Update and Economic Outlook – 31 March 2024

Equity Markets

The ASX 200 rose 0.85% in June following a rise of 0.49% in May. For financial year the ASX 200 rose 7.83%

· The S&P500 rose 3.47% in June following a rise of 4.8% in May. For the financial year the S&P500 rose 22.69%. A significant portion of this rise can be attributed to a select number of stocks including NVDA, AAPL, MSFT, GOOGLE & AVGO.

Inflation

The figures released by the Australian Bureau of Statistics show that the monthly Consumer Proce Index (CPI) indicator rose 4.0% in the 12 months to May 2024, up from 3.6% in April.

The most significant contributors to the annual rise to May were Housing (+5.2 per cent), Food and non-alcoholic beverages (+3.3 per cent), Transport (+4.9 per cent), and Alcohol and tobacco (+6.7 per cent).

The June inflation and QoQ number will be pivotal to the RBA decision on rates at their August meeting. If the Q2 rate is 1% or more, we might see another insurance rate rise.

Economy

There are many moving parts to the economy, and they change regularly.

Some slightly better news in Australia with retail sales came in higher than expected for May, growing 0.6% against a forecast of a 0.3% increase, after a rise of 0.1% in April. The YoY figure came in at 1.7%.

There was also a lift in building approvals for May – refer ABS release 3 July. Information can be found via the following link. Building Approvals, Australia | Australian Bureau of Statistics (abs.gov.au)

Trade balance down.

The big question is how frustrated is the RBA with how slow inflation is falling?

US

· Low-income consumers are feeling the brunt of higher inflation.

· Middle income earners are now starting to pull back on discretionary spending.

· There is an expectation that the Fed will cut rates over 2024 and 2025.

· Lower mortgage rates will be needed to turnaround the housing downturn.

· Median mortgage payment as a share of household income has risen from 19% in 2019 to 28% as of 2024.

· Wages growth at 4.4% year on year over Q1 2024.

· Employment up 1.8% year on year over Q1 2024.

· US unemployment rose from 4% to 4.1% in June and there is an expectation from some analysts that this could go higher next year.

Stock Highlight

James Hardie Industries (ASX: JHX; NYSE: JHX)

James Hardie Industries plc is a global building materials company and the largest global manufacturer of fibre cement and fibre gypsum products. Headquartered in Ireland, it is a dual-listed company, being listed on the Australian and New York Stock Exchanges. Its management team currently sits in Chicago, Illinois, United States. Current primary geographic markets include North America, Europe, Australia, New Zealand and the Philippines.

JHX employ approximately 5,200 employees across operations in North America, Europe, Australia, New Zealand, and the Philippines, and generated more than USD $3.9 billion in net sales during the 2024 financial year.

Shareholder updates

GLT

GLT is thrilled to announce a major milestone in their journey. Recently, they've upgraded to a new location at 2/39 Silica St, Carole Park, QLD 4300, signaling not just a change of scenery, but a significant leap in their production capabilities. 

This move is all about meeting the increasing demand for their renowned high-quality trailers more efficiently and swiftly. It symbolises their commitment to excellence and the continuous evolution in serving their customers better. 

Join us in celebrating this exciting new chapter for GLT, as they set new industry standards from their advanced new home.  

Support the new venture here

Teaminvest Access Fund

Unit Pricing

The unit prices for March 2024: 

Fund Information

TIP Group is looking forward to the upcoming 3-6 months which may prove turbulent for the Equities markets.  The Equities portfolio that we have curated for the Fund has been designed so that the businesses we are invested in have a higher than normal chance of performing under unstable conditions.  As investors we look forward to further investment opportunities at great prices in the coming months and generating better long-term results.

Fund / ASX Comparison Example

The TeamInvest Access Fund has shown growth over the past year:

An investment of $10,000 at 31 March 2023 would show your current value as:

• Teaminvest Access Fund would be $11,203.09.
• ASX -200 would be $11,001.84

Stock Holdings

A few changes to the top 5 performing stocks for March:

Statements 

Quarterly Statements for the period 01 January 2024 to 28 March 2024 were emailed on 08 April 2024.  If you have not received the Quarterly Statement, please check your email Spam folder.  The Statements are also located within your Investor Portal.

Should you have any questions regarding your statement please contact our Funds Administration Team.

Investor Portal 

You can access your investor portal at any time using the following link:  https://investors.tipgroup.com.au/py/sys.pyc  

OR

You can now access your Investor Portal via the TIP Website:

Financial Services | TIP Group 

AND clicking on Investor Portal in the headings section

Contact Us 

Our Funds Administration Team are here to assist. 

(P): 1300 160 803 

(E): funds@tipgroup.com.au 

*Past performance is not indicative of future performance

Private Equity Fund

Unlocking Australia’s $50 Billion Economic Boost: The Private Equity-Led Manufacturing Renewal

In the post-COVID-19 landscape, Australia’s manufacturing sector stands on the brink of a pivotal resurgence. Traditionally viewed as just another economic component, manufacturing has emerged as the backbone of innovation and self-sufficiency—especially as the pandemic underscored the critical nature of domestic production capabilities. With Australia ranking last in manufacturing self-sufficiency among OECD countries, the call for a strategic overhaul is loud and clear. This is where private equity steps in, poised to play a transformative role.

Private equity offers the financial muscle and strategic acumen necessary to rejuvenate Australia’s manufacturing base. By infusing capital and expertise into this sector, private equity promises not only to revitalise operations and facilitate technological advancements but also to steer firms towards high-value production and global competitiveness. The potential economic boost is staggering, with a forecasted $50 billion uplift that spells jobs, innovation, and resilience.

The manufacturing sector isn’t merely another industry; it’s a rich tapestry of opportunities for high-quality, full-time employment and a linchpin of global trade. As Australia navigates its post-pandemic recovery, private equity stands ready to fuel this manufacturing revival, championing a future of economic strength and innovation.

This investment isn’t just about profit—it’s a strategic move towards securing Australia’s economic future, making the private equity-led manufacturing renewal a cornerstone of Australia’s roadmap to recovery and prosperity.

Learn more about our Private Equity Fund 

*Past performance is not indicative of future performance

Learn more about our Future Property Fund here.

​

Corinthian Balanced Fund

February 2024 Update

• The CBF growth assets account for approximately 43% of the total portfolio and defensive assets of approximately 56.42%
•  For March there were no investments into equities and circa $1.1mil increase into commercial debt opportunities 
• Stock markets rose again with the ASX200 rising 1.95% and the S&P500 rising 3.1%.
  

Unit Price

The Unit price is calculated in accordance with the Constitution and is based on the value of the underlying assets of the Fund with an adjustment for any relevant Transaction Costs. 

• The financial year starting unit price for the CBF was $1.00166 (ex-distribution price). 
• As of 31 March 2024, the unit price of the CBF was $1.0755
• The performance for the month of March after all fees was 0.42% 
• Financial YTD performance is 7.37% (for 9 months to 31 March 2024)
  

*Past performance is not indicative of future performance

Corinthian Balanced Fund

February 2024 Update

• The CBF growth assets account for approximately 43% of the total portfolio and defensive assets of approximately 56.42%
•  For March there were no investments into equities and circa $1.1mil increase into commercial debt opportunities 
• Stock markets rose again with the ASX200 rising 1.95% and the S&P500 rising 3.1%.
  

Unit Price

The Unit price is calculated in accordance with the Constitution and is based on the value of the underlying assets of the Fund with an adjustment for any relevant Transaction Costs. 

• The financial year starting unit price for the CBF was $1.00166 (ex-distribution price). 
• As of 31 March 2024, the unit price of the CBF was $1.0755
• The performance for the month of March after all fees was 0.42% 
• Financial YTD performance is 7.37% (for 9 months to 31 March 2024)
  

*Past performance is not indicative of future performance

Corinthian Balanced Fund

February 2024 Update

• The CBF growth assets account for approximately 43% of the total portfolio and defensive assets of approximately 56.42%
•  For March there were no investments into equities and circa $1.1mil increase into commercial debt opportunities 
• Stock markets rose again with the ASX200 rising 1.95% and the S&P500 rising 3.1%.
  

Unit Price

The Unit price is calculated in accordance with the Constitution and is based on the value of the underlying assets of the Fund with an adjustment for any relevant Transaction Costs. 

• The financial year starting unit price for the CBF was $1.00166 (ex-distribution price). 
• As of 31 March 2024, the unit price of the CBF was $1.0755
• The performance for the month of March after all fees was 0.42% 
• Financial YTD performance is 7.37% (for 9 months to 31 March 2024)
  

*Past performance is not indicative of future performance

Corinthian Balanced Fund

February 2024 Update

• The CBF growth assets account for approximately 43% of the total portfolio and defensive assets of approximately 56.42%
•  For March there were no investments into equities and circa $1.1mil increase into commercial debt opportunities 
• Stock markets rose again with the ASX200 rising 1.95% and the S&P500 rising 3.1%.
  

Unit Price

The Unit price is calculated in accordance with the Constitution and is based on the value of the underlying assets of the Fund with an adjustment for any relevant Transaction Costs. 

• The financial year starting unit price for the CBF was $1.00166 (ex-distribution price). 
• As of 31 March 2024, the unit price of the CBF was $1.0755
• The performance for the month of March after all fees was 0.42% 
• Financial YTD performance is 7.37% (for 9 months to 31 March 2024)
  

*Past performance is not indicative of future performance

Corinthian Balanced Fund

February 2024 Update

• The CBF growth assets account for approximately 43% of the total portfolio and defensive assets of approximately 56.42%
•  For March there were no investments into equities and circa $1.1mil increase into commercial debt opportunities 
• Stock markets rose again with the ASX200 rising 1.95% and the S&P500 rising 3.1%.
  

Unit Price

The Unit price is calculated in accordance with the Constitution and is based on the value of the underlying assets of the Fund with an adjustment for any relevant Transaction Costs. 

• The financial year starting unit price for the CBF was $1.00166 (ex-distribution price). 
• As of 31 March 2024, the unit price of the CBF was $1.0755
• The performance for the month of March after all fees was 0.42% 
• Financial YTD performance is 7.37% (for 9 months to 31 March 2024)
  

*Past performance is not indicative of future performance

Corinthian Balanced Fund

February 2024 Update

• The CBF growth assets account for approximately 43% of the total portfolio and defensive assets of approximately 56.42%
•  For March there were no investments into equities and circa $1.1mil increase into commercial debt opportunities 
• Stock markets rose again with the ASX200 rising 1.95% and the S&P500 rising 3.1%.
  

Unit Price

The Unit price is calculated in accordance with the Constitution and is based on the value of the underlying assets of the Fund with an adjustment for any relevant Transaction Costs. 

• The financial year starting unit price for the CBF was $1.00166 (ex-distribution price). 
• As of 31 March 2024, the unit price of the CBF was $1.0755
• The performance for the month of March after all fees was 0.42% 
• Financial YTD performance is 7.37% (for 9 months to 31 March 2024)
  

*Past performance is not indicative of future performance

Conscious Investor Fund

Welcome to the interim Letter for members of the Conscious Investor Fund, families and friends:

Over the past 12 months the performance of the Fund was 16.29%. Since inception, the investments of our early Members have tripled in value since they were first deposited. (You can see this in the growth chart in the Report.)

The Letter also takes a deep dive into Alphabet (Google) one of our largest holdings: what drives it with the sort of success that makes it likely we will want it to be a key holding for many years to come. Since 2015 the Fund has purchased 22 parcels of Alphabet shares for a current holding of 52,000 shares for a total value of AUD$11.6 million. This means an average annual return of 23.18% since the first purchase.  

We also look at some of the penetrating remarks and quips by Charlie Munger, Warren Buffett’s late friend and partner, who passed away in December last year at age 99 years.

Read the full letter here

We wish health and wealth for you and your family for 2024. Let us know if you have any questions.

From John Price and Members of the Capital Allocation Team.

Dr John Price

Conscious Investor Fund

Conscious Investor Fund

Conscious Investor Fund