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Additional Un-margined Navra Fund

Discussion in 'Managed Funds & Index Funds' started by OLI, 19th Apr, 2006.

  1. OLI

    OLI Well-Known Member

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    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?
     
  2. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    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
     
  3. OLI

    OLI Well-Known Member

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    Thanks for confirming that Mark.

    Regards,
    OLI.
     
  4. Glebe

    Glebe Well-Known Member

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    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.
     
  5. OLI

    OLI Well-Known Member

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    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.
     
  6. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    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
     
  7. Simon

    Simon Well-Known Member

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    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.
     
  8. OLI

    OLI Well-Known Member

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    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.