A Stronger Step Forward
Between July and August, the portfolio showed both resilience and acceleration. In July, the portfolio closed at $620,049 with total income of $13,740, while by the end of August it had climbed to $642,257 with income of $24,100. That’s a meaningful month-on-month lift — a mix of steady dividends and market-driven capital gains.
Key highlights between the two months:
- Direct shares surged from a modest 2.06% return in July to a standout 8.24% in August, with several holdings delivering double-digit gains.
- Credit funds, the bedrock of income stability, slowed from 2.69% in July to 0.65% in August, reflecting a quieter period in distributions.
- Income-focused ETFs and LICs bounced back, rising from 1.56% in July to 3.74% in August, aided by a stronger reporting season.
Performance at a Glance
Here’s how the main asset classes stacked up month-on-month:
| Asset Type | July Return | August Return | July Income | August Income | Notes |
|---|---|---|---|---|---|
| Passive ETFs | 2.65% | 3.12% | $2,454 | $0 | Small caps (VSO) were August’s big winner at +7.7%. |
| Direct Shares | 2.06% | 8.24% | $157 | $1,275 | Eagers Automotive (+40.9%) and Nick Scali (+26.3%) stole the show. |
| Income Funds | 1.56% | 3.74% | $1,923 | $1,690 | WH Soul Pattinson (+9.9%) drove gains. |
| Credit Funds | 2.69% | 0.65% | $609 | $631 | Steady distributions, but subdued capital growth. |
| Total | $5,143 | $3,596 | Monthly income received across asset classes. |
Income Flow: Steady Paycheques
Income remained the portfolio’s north star. July delivered $13.7k, while August topped it with $24.1k. The jump reflected:
- Larger distributions from VHY (Vanguard High Yield ETF) and WH Soul Pattinson.
- Ongoing reliability from MOT and MRE, the Metrics credit funds.
- A steady drip from peer-to-peer (P2P) lending allocations.
This reinforces why diversified sources of income — shares, LICs, ETFs, and credit funds — provide a smoother ride than relying on one stream alone.
Standout Contributors
- Direct Shares: Retail and automotive stocks surged. Eagers Automotive (APE) gained over 40% in August alone, while Harvey Norman (HVN) and Nick Scali (NCK) also delivered double-digit growth.
- Income Funds: WH Soul Pattinson (SOL) returned nearly 10% in August, showing why diversified investment companies still deserve a place in income portfolios.
- Credit Funds: While overall growth was modest, distributions continued to land in investors’ accounts, proving their value as income anchors.
Market Context: Tailwinds and Headwinds
- Credit Funds: The RBA’s steady cash rate and softer inflation outlook have kept private credit yields attractive, but capital growth has levelled off as markets price in fewer rate hikes.
- Dividend Stocks: Reporting season boosted confidence, especially in consumer-facing sectors. Companies like Eagers and Nick Scali benefitted from resilient spending despite higher living costs.
- ETFs: The small-cap rally (VSO +7.7% in August) highlighted renewed investor appetite for growth pockets in an otherwise cautious market.
Actionable Takeaways
- Stay Diversified: Direct shares delivered the fireworks in August, but July’s softer equity returns remind us why credit funds and ETFs remain essential.
- Don’t Ignore the “Steady Eddies”: MOT, MRE, and La Trobe may not deliver headline-grabbing growth, but they keep the monthly income flowing.
- Look Beyond the Headlines: Retail and automotive names surprised to the upside, reminding investors that opportunities often lie where sentiment is cautious.
Outlook
Looking ahead, the portfolio remains well-positioned for both income and growth. With the September quarter set to bring another round of dividends and credit distributions, income stability should continue. At the same time, volatility in equity markets could offer fresh buying opportunities.
For readers: this is a good time to review your own portfolio’s balance. Ask yourself — are you overly reliant on one asset class, or do you have a mix that can weather both quieter months and growth spurts?
Steady paycheques don’t come from chance, they come from structure.