Managed Funds Additional Un-margined Navra Fund

Hi, I have some Navra Funds with a 50% BT Margin loan and had to complete the paperwork to transfer the units over to BT when they set up the loan. I'd like to buy some more units (un-margined) to acumulate extra funds as a buffer. When I apply for these additional units will it be a new application to Navra or do I quote my existing account details? I'm guessing the margined units are now in a separate account held by BT Margin Lending so I would be opening a new Navra account - is this right?

 

OLI,

If you want to have a completely different group of units that are in no way connected to any margin loan, then yes you'd need to open a new investment.

Mark

 

Thanks for confirming that Mark.

Regards,
OLI.

 

Couldn't you keep them in the same grouping, with the new addition reducing your LVR? ie just because you're putting more of your own money or units in, doesn't mean you have to also borrow more money. Unless I'm missing something this way you don't double up on paperwork.

 

I may be wrong but wouldn't this mean the lender then has extra security because they are added to the units already held by BT Margin lending? I'm new to margin loans so not 100% sure on the paperwork side of things.

 

If the value of the portfolio dropped enough, some of the units could be sold off, yes. But the value would have to drop further than it would currently as your LVR would be lower if you added the extra funds.

I did say 'If you want to have a completely different group of units that are in no way connected to any margin loan, then yes you'd need to open a new investment.' for a reason.

Mark

 

If you want them as a buffer which I guess means to avoid a margin call, then you simply deposit the funds into your BT account and send the completed prospectus to BT asking they cut a cheque for the purchase.

Your LVR will drop and there is the buffer.

 

Hi Simon. I didn't explain the buffer very well but I want it for any unexpected property expenses such as loss of tenant, loss of job and repairs etc - not so much as a buffer to avoid a margin call. I'm happy with a 50% LVR on my margin loan and would be very worried if the value of the fund dropped as low as that.