Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 172

A message from Chris Cuffe on charity win-win

Dear Readers

My personal thanks for your interest in Cuffelinks. As we approach 20,000 subscribers and almost two million pageviews, I am using the Cuffelinks contact list to reach as many of our readers as possible, for a win-win cause.

This exception to our usual newsletter format highlights three recent milestones for my charitable venture, the Third Link Growth Fund, which invests in Australian equities via other fund managers (it’s a ‘fund-of-funds’).

I started Third Link in 2008 with a unique idea. What if I established a fund where all the fees received for managing the investments, net of some tiny expenses, were donated to charities. After a long career in wealth management, I felt I had an ability to select good fund managers who could outperform over time. If I could convince the managers and administrators to provide their services for free for a worthy cause, everyone could win.

The results speak for themselves. Over the last four years (we used a different structure and benchmark in the first few years), the Fund has delivered 18% per annum and outperformed the S&P/ASX 300 Accumulation Index by 6.3% per annum.

The above figures are to 31 July 2016, after fees. Of course, this is not an indication of future returns.

There are three milestones I want to mention.

First, the Fund’s assets recently exceeded $100 million. Many of you may think this is a relatively modest amount for a fund with strong long-term performance. You’re right! Other funds employ sales staff and marketing resources to promote their businesses to financial advisers and the media, but Third Link does not employ anyone. Neither myself nor my fellow director, Ashley Owen, receive any payments from the Fund. We want as much money to go to charities as possible. We do not pay commissions or salaries to brokers, advisers or sales staff, and this means we have no distribution channels or support other than word-of-mouth and a bit of media.

Second, we recently passed $5 million in donations to charities, which are listed here. Despite our low profile, I’m proud that we now generate over $100,000 each month to support children and young adults under the Third Link THRIVE programme.

Third, we have just launched our new website, with more information presented in a fresher and more useful way. Please visit thirdlink.com.au and learn more.

When I started Third Link, I said the Fund would close to new investors at $150 million. Today, I confirm I will honour this undertaking. With this amount, Third Link will have about $2 million to give to charities each year. Also, many of the fund managers have given me a specific allocation and I feel more confident we can continue to perform with this amount.

And here’s a little secret. It is often cheaper to access these top fund managers via Third Link than directly to the managers, as they also waive their performance fees. My thanks to all the fund managers and service providers for their generosity in offering their skills without payment.

I have no idea how long it will take to raise the final $50 million. Inflows have improved since this recent report by Zenith Investment Partners, a leading independent investment researcher. Managing Partner David Wright, said:

“The Third Link Growth Fund has provided investors with exceptional returns as an Australian equity large cap fund since its conversion to a single asset class fund in February 2012. The Fund’s four-year annual performance to 30 June 2016 of 16.90% p.a. ranks it in the top quartile of the Australian Equity Large cap sector (which consists of 119 funds) easily outperforming the S&P/ASX 300 Accumulation Index return of 11.08% p.a. and median manager return of 11.54% p.a.

The Fund has generated this excellent outperformance with significantly lower volatility (9.91% p.a.) than the benchmark (11.93% p.a.) and the median manager in the category of 11.92% p.a. This and the fact the Fund has a history of monthly excess returns in falling markets of 94.12% also demonstrates its capital protection qualities.”

If you would like to invest, please see the Product Disclosure Statement here. At this point, most funds say something about not repeating past performance, and of course, I cannot give any guarantees. But I believe the money is in the hands of some of the best fund managers I know.

Thanks, Chris Cuffe

 

10 Comments
Chris Cuffe
October 08, 2016

Yes.

Jeff
October 07, 2016

Hi Chris, When the fund finally closes, will existing investors be able to continue investing capital into the fund? Jeff

Phil Brady
September 08, 2016

At the risk of being howled down given the social benefits of the fund, and I'm not saying don't invest, I'm just saying make sure you know what you're investing in. The Fund has a mid-small cap bias. The benchmark is arguably not the correct one given the ASX20 covers a not immaterial % of the ASX300. So the outperformance may just look a bit better then if you use the Small Industrials or the MidCap 50 or a blend to actually mirror the actual portfolio. Either way the absolute performance is good and its a great outcome for charities and a great endeavor by the founders. Also, plenty of research around currently suggesting valuation dispersion between some of the above sectors and value and larger caps are at all time highs, but as always do your own homework.

Chris Cuffe
September 09, 2016

Hi there Phil,

I note your comments but wanted to clarify a few things about why I think the benchmark is actually appropriate:
* The Fund can, and does, invest in other funds which are not restricted in the size of stocks they invest in. I am pretty sure that if you 'looked through' my fund you would find quite a number of top 100 stocks
* As stated in the PDS, Third Link has no set requirement to be in any part of the market. It is free to invest in stocks of any size
* Zenith, who research the Fund and know it very well, insist it be ranked in the large cap part of its surveys
* The Fund has been invested for many years, including during periods when small/mid caps have been out of favour compared to large caps

Benchmarks are never perfect as you know. I'm pretty sure if the Fund was judged against other benchmarks (ASX100, 200) it would also come up looking pretty good.

Regards
Chris Cuffe

Phil Brady
September 12, 2016

No problem and thanks for the reply. As always it might be in the labeling of funds managers which is problematic anyway. In the fund report I can see 3 to 5 Funds with the label 'Small Cap' or Mid Cap or Emerging Companies, or no definition at all meaning they can drift. But the mere name Small Cap tends to mean outside the ASX 100, 200 or 300 for that matter. Currently, 21% of the fund is invested there, hence my comment.

John
September 06, 2016

Hi, I'd like to invest $1m in the fund. Please send me required documents for my superfund (wholesale investor).

Cheers, John.

(We have replied directly to John).

Dennis
September 06, 2016

Congratulations on such a great concept. That’s why private enterprise thrives. Great result and keep up the good work to support these charitable organizations that need independent business support for their continued work and success.

Great Job!!

Phil
September 06, 2016

Chris

Well done.

I will be applying for $100k of units this month.

Thank you for your charity work.

Phil

Peter
September 06, 2016

As an adviser, how could I access the fund both personally and for my clients? And can I say you guys are killing it with the newsletter. A great read!

(We have replied directly to Peter).

Richard
September 06, 2016

this is great work. i am just in the process of thinking about placing some capital with a third party manager and what a great way to do this. as i am in the final stages of a theology degree its a very good example of capitalism serving a social purpose.

 

Leave a Comment:

RELATED ARTICLES

Third Link Growth Fund’s 10th anniversary

banner

Most viewed in recent weeks

16 ASX stocks to buy and hold forever, updated

This time last year, I highlighted 16 ASX stocks that investors could own indefinitely. One year on, I look at whether there should be any changes to the list of stocks as well as which companies are worth buying now. 

UniSuper’s boss flags a potential correction ahead

The CIO of Australia’s fourth largest super fund by assets, John Pearce, suggests the odds favour a flat year for markets, with the possibility of a correction of 10% or more. However, he’ll use any dip as a buying opportunity.

2025-26 super thresholds – key changes and implications

The ABS recently released figures which are used to determine key superannuation rates and thresholds that will apply from 1 July 2025. This outlines the rates and thresholds that are changing and those that aren’t.  

Is Gen X ready for retirement?

With the arrival of the new year, the first members of ‘Generation X’ turned 60, marking the start of the MTV generation’s collective journey towards retirement. Are Gen Xers and our retirement system ready for the transition?

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

What Warren Buffett isn’t saying speaks volumes

Warren Buffett's annual shareholder letter has been fixture for avid investors for decades. In his latest letter, Buffett is reticent on many key topics, but his actions rather than words are sending clear signals to investors.

Latest Updates

Investing

Designing a life, with money to spare

Are you living your life by default or by design? It strikes me that many people are doing the former and living according to others’ expectations of them, leading to poor choices including with their finances.

Investment strategies

A closer look at defensive assets for turbulent times

After the recent market slump, it's a good time to brush up on the defensive asset classes – what they are, why hold them, and how they can both deliver on your goals and increase the reliability of your desired outcomes.

Financial planning

Are lifetime income streams the answer or just the easy way out?

Lately, there's been a push by Government for lifetime income streams as a solution to retirement income challenges. We run the numbers on these products to see whether they deliver on what they promise.

Shares

Is it time to buy the Big Four banks?

The stellar run of the major ASX banks last year left many investors scratching their heads. After a recent share price pullback, has value emerged in these banks, or is it best to steer clear of them?

Investment strategies

The useful role that subordinated debt can play in your portfolio

If you’re struggling to replace the hybrid exposure in your portfolio, you’re not alone. Subordinated debt is an option, and here is a guide on what it is and how it can fit into your investment mix.

Shares

Europe is back and small caps there offer significant opportunities

Trump’s moves on tariffs, defence, and Ukraine, have awoken European Governments after a decade of lethargy. European small cap manager, Alantra Asset Management, says it could herald a new era for the continent.

Shares

Lessons from the rise and fall of founder-led companies

Founder-led companies often attract investors due to leaders' personal stakes and long-term vision. But founder presence alone does not guarantee success, and the challenge is to identify which ones will succeed in the long term.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.