Managed Funds Navra Unit Price

Discussion in 'Shares & Funds' started by ActiveTrade, 13th Jun, 2008.

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  1. 24724

    24724 Well-Known Member

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    Last edited by a moderator: 9th Jul, 2008
  2. ActiveTrade

    ActiveTrade Well-Known Member

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    I am still trying to figure out the maths on 10%. Isn't 8.70% as per website ?

    I am sure I have missed something. :confused:

    Good to see strong interest in this thread.
     
  3. Chris.R_WA

    Chris.R_WA Well-Known Member

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    I remember Steve saying that the accounting/reporting regulations state that the distribution has to be quoted as a percentage of the unit price at the start of the FY (not at any particular point in time). ie The unit price on the 1st July 2007 would have been around 1.12ish.

    Unit price is now 0.8539!!:eek:
     
  4. Nigel Ward

    Nigel Ward Well-Known Member

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    Australian
    Retail Fund
    (cents/unit)%Australian
    Wholesale Fund
    (cents/unit)%American
    Fund
    (cents/unit)%
    [​IMG] Year to Date8.20008.70%8.20008.62%3.50003.78%
    Sep 2007 2.80002.50%2.80002.50%2.50002.55%Dec 2007 3.40003.00%3.40003.01%1.00001.06%Mar 2008 2.00001.85%2.00001.85%0.00000.00%Is what I found at the website...which seems not to include the June 2008 distribution.

    Cheers
    N.

    Edit: ooops that formatting doesn't work...but you get the drift...
     
  5. Simon Hampel

    Simon Hampel Founder Staff Member

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    CFS W/S Geared Share fund unit price peaked at 8.6107 at the beginning of November last year and is currently at 3.5412 :eek: :eek:
     
  6. Alan__

    Alan__ Well-Known Member

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    Another little advantage not mentioned is hopefully the Return will also include a 4 or 5% Franking Credit. :)

    On a separate issue, and I'm sure this is simply a time/processing issue that NavraInvest can't get around, it would probably be advantageous to some if Distributions were actually paid within the same notification period that NavraInvest informs the Margin Lenders of the new(lower) Unit Price. As I said, probably not possible.

    The point is that, under some circumstances, some may be forced into a Margin Call situation once the Distribution is paid and then a few days later the Distribution arrives which could have been used to prevent the Call in the first place. To make things worse, the Margin Call will often not just be enough to push you back below the Call amount but will usually be the 10+ percent to get you back to the start of your buffer. :eek:

    Anyway, I guess this shouldn't happen if we keep a close eye on our affairs.....
     
  7. Simon Hampel

    Simon Hampel Founder Staff Member

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    You should generally be able to hold the lender off for a bit if you know a distribution is coming and you will be depositing the proceeds into the margin loan.
     
  8. 24724

    24724 Well-Known Member

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    Hi, Nigel,
    Reference my previous post, the Navra website, at that time, showed distribution fourth-quarter figures as per your earlier posted figures, with the only exception being that the American fund showed nil distribution.
    Since then, these figures have been removed for some reason.
    But they will return 'in the fullness of time'. :D
    Cheers
    Jayar
     
  9. TryHard

    TryHard Well-Known Member

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    Right, that's enough for even risk-averse me to buy in ... fingers crossed ... :p
     
  10. MJK__

    MJK__ Well-Known Member

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    Well done for waiting as long as you have I think.:D

    MJK
     
  11. TryHard

    TryHard Well-Known Member

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    To be fair, it's because I couldn't raise any more money ( :) ) , a situation with Great Guru Rolf Latham just remedied. Not only do I recommend ASAP Financial Services as a mortgage broker, they are super-human ! ;-)
     
  12. lorrimer

    lorrimer Well-Known Member

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    Does anyone know if margin lenders take into account that fact that someone has capitalised and paid interest in advance when determining whether to give you a margin call ?
    My thinking is that even though you have paid the interest up front, that interest hasn't yet accrued against the loan, and can significantly raise the LVR.
     
  13. Simon Hampel

    Simon Hampel Founder Staff Member

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    I'm pretty sure they don't ... your LVR is still your LVR - they have to manage their risk and if the market crashes, they still have to recover their capital.

    It's not as if they have a liability to you if you pay down your loan early - they won't refund your pre-paid interest!
     
  14. Andrew Allen

    Andrew Allen Well-Known Member Business Member

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    TryHard what risk are you avoiding by buying at a lower unit price?

    At what point does the loss of unit value stop becoming lower risk is another point of view?
     
  15. 24724

    24724 Well-Known Member

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    Price today is .8415. :eek::eek:

    Jayar
     
  16. lorrimer

    lorrimer Well-Known Member

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    What happens if the bear market continues for years. Distributions continue to be paid but the unit price reaches zero. Is that it, is the fund wound up? Is is there any discretion as to whether distributions can be withheld in order to preserve the unit price and keep the fund afloat. Obviously I hope the situation doesn't arise but some of the listed property funds are getting close to this situation at the moment.
     
  17. TechMan

    TechMan Well-Known Member

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    Was the unit price released today by Navra? I thought they were witholding it until Monday.
     
  18. 24724

    24724 Well-Known Member

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    Leandro,
    I logged into my account with Investorserve and saw this unit price as at 11 July 2008. Nothing on the Navra site as yet.
    And why would they be withholding it until Monday? Anything to do with possible margin calls, perhaps?
    Jayar
     
  19. Simon Hampel

    Simon Hampel Founder Staff Member

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    I think you misunderstand how managed funds work.

    The unit price is simply a calculation of the value of all net assets held by the fund divided by the number of units on offer. Applications and redemptions of units don't change the asset value (since both the asset value and unit price change in proportion to any new applications/redemptions).

    The distributions only come out of realised profits. In order for a distribution to be paid, the profit must first be earned. For a profit to be earned, the value of the assets must go up. If the value of the assets goes up, the unit price also goes up. If a distribution is paid, the unit price goes back down again, but only ever by as much as the distribution.

    A distribution can never cause the unit price to drop from year to year, in order for their to be a distribution, the unit price had to go up first.

    If the unit price after the distribution is subsequently lower, that is as a result of the value of the underlying assets dropping in value, not as a result of the distribution.

    Thus, paying distributions has no impact on unit price overall ... and can never cause the unit price to drop to zero.

    The only way for the unit price to drop to zero is if the net asset value of the shares held all dropped to zero. That is extremely unlikely to happen.

    All profits from a managed fund (or any unit trust) must be paid out in full by the end of the financial year, the fund has no discretion to withhold distributions from year to year ... but as I said, that doesn't matter anyway, since it is not the distributions which cause a drop in unit price.
     
  20. TryHard

    TryHard Well-Known Member

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    Hi Insight

    The risk I am considering is paying more than I need to per unit when I can wait and perhaps do better, most likely to occurif we are nowhere near the bottom of the market yet. Hence the 'fingers crossed' bit.

    But I am motivated, and the other risk is doing nothing.

    The operation of the fund and its results I'm fairly comfortable with when I compare it to any of the available options I (vaguely) understand. I know NI only hold blue chips that meet pretty stringent criteria, so they'll probably survive as long or longer than most, and there is no impact of internal gearing etc.

    I realise there are no guarantees, but for someone like me who wants to take advantage of a buying opportunity, if this is indeed a time to buy in the market, my preference is to do it with NI for now, and I can't see how unit prices in the $0.80's with the market as it is, could be bad. But of course, time will tell.
     

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