‘In God we trust; all others bring data.‘
W. Edwards Deming Statistician/Consultant (1900–1993)
Slack Investor likes to measure things, especially long-term results. In the world markets, for FY 2025, the FTSE 100 Total Return Index was up 10.8% (FY 2024 up 11.8%). Dividends helped the Australian Accumulation Index to be up 9.0% for the financial year (FY 2024 +12.2%). The S&P 500 Total Return Index is again the top performer – and was up 15.2% (FY 2024 +24.2%). All of these Total Return Indices include any accumulated dividends.
Slack Investor has stuck to his strategy of mostly investing with growing companies that are profitable (Return on Equity >15%), have an established earnings record and, not too expensive (forward P/E ratios <50). He expects a bit of volatility in his growth oriented investment portfolio. He is reassured that, despite the odd negative year in the Slack Fund, the dividends and his separate Stable Income portfolio are doing what they should – keeping Slack Investor with enough cash to ‘keep the wheels on’ the Slack lifestyle – should the stock market sour.
Slack Portfolio Results FY 2025
All Performance results are before tax. The Slack Portfolio is Slack Investor’s investment portfolio. He is glad to report an annual FY 2025 performance of +18.1%. Full yearly results with Australian benchmarks are shown in the table below. Slack Investor realises that only long-term results really count.
For property values, Slack Investor is using the Home Price Index supplied by PropTrack. The Index uses median values for each city – I would have preferred calculations that include the net rental yield, but this will have to do. Of course, the real estate industry avoids true measurement of real estate performance by collecting figures only on gross price changes – they ignore the significant transfer costs involved (Stamp Duty, Conveyancing, Bank Fees, etc) and, the costs of any home improvements and renovations.
For FY 2025, the Australian Share market Total Return Index (ASX200 Acc) was up 9.0%. The Vanguard Diversified Growth ETF (VDGR), comprising International shares (42%) and Australian Shares (28%), increased by 12.7%. Inflation is now within the Reserve Bank target – with the CPI at +2.1%.
The Cash rate of 4.3% is above inflation. Cash is important – but not a way to grow your wealth. The average readily available cash rate of return since 2010 is 2.6% and, for cpi measured inflation, it is 2.7%.
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, PropTrack Home Price Index in both Brisbane and Melbourne, and Cash (Australian Super Cash Fund) and Consumer Price Index (CPI). AV. YEARLY is the annual mean of all the data since 2010.
5-yr Average Annual Performance
Although Slack Investor collects 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 a close second is Brisbane Residential real estate over a five-year period.
10-year compound annual rate of return
The Slack Fund has been around a while and 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. For FY 2025, a 10-year annual rate of return of over 17% – Go Slack Fund! The 10-yr data is shown below in table and chart form.
It is useful to note that, the 10-yr rates of return for the Median Balanced Fund, Vanguard Growth fund, ASX200, and residential property in Brisbane and Melbourne are also good long-term investments. These appreciating assets generate a 10-yr compound annual rate of return in the region of 6-9% p.a.
The Slack Fund average 10-yr compound yearly return vs BENCHMARKS in table form. Prior to 2022, 10-yr Vanguard Growth fund figures were not available. AV. YEARLY is the annual mean of all the data since 2019.
Although Cash is necessary to add stability and flexibility to a portfolio. From the chart below, Cash as a long-term investment vehicle, is a poor choice.
15-year compound annual rate of return
Perhaps because Slack Investor is showing signs of age, he notices that there is enough accumulated data for rolling 15-yr rates of return. Happy to report solid long-term results.
The Slack Fund average 15-yr compound yearly return vs BENCHMARKS in table form.
Growth of a $10 000 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 $10 000.
The 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.
