Managed Funds Any thoughts on these please?

Does anyone have any experience with these funds? Or thoughts?

ING Tax Effective Income Trust - Wholesale Units - 39%
I was looking at the retail version and then saw this wholesale version that is very close in asset breakup etc. Excactly the same on DirectAccess but on the ING site it gives more detail and there are slight differences. It's MER is lower at 0.95 than the retail at 1.80. The retail version has 5 star MS rating, no rating for the WS. The reason I looked at it in the first place is because of the name with "income" in it and since I am needing an income... but the ING site lists it as a growth fund....and I wondered about the risk but it has a reasonably low volatility at 1.64 last year. I seem to keep coming back to this one for some reason.

Vanguard LifeStrategy Balanced Fund - 39%
Not wanting to put all my eggs into one manager, I looked at Vanguard for another reasonably low volatility fund. I like Vanguard because of lower fees. The MER starts at 0.9 and lowers down to 0.35 for amounts over 100K. I like also that this one has a different asset breakup than the ING...more diversifed as well as more cash and fixed interest. Volatility is low 1's.

Macquarie Master - Property Securities - 11%
I was also looking at Australian Unity for property securities but the volatility of it puts my off (ranges in the 4's). This one is in the high 2's. It's MER is good at 0.72. This fund has been around over 10 years. MS rating 4 stars.


Prime Value Imputation Fund - 11%
The reason I looked at this one was because I found a couple of emails my husband had sent to them last year with questions on their Growth Fund. I think he was looking at putting his super with them (or maybe mine, I don't know). Anyway, I looked at the fund and the imputation fund suited me better with the need for an income. This one has a higher MER than the others at 1.44. MS rating is 5 stars and they have won a few S & P's awards. Voliatility is in low to mid 2's.


So of the cash I have to invest I would put 39% each in the first two and 11% each in the bottom two. I wanted a mixture of classes and risk but I've put most into those with the lower volaliliy.

Portfolio Asset Allocation would be as follows (thanks to InvestSmart for calculating these figures)

Domestic Shares 35.46%
International Shares 6.71%
Fixed Interest 18.95%
Cash 12.99%
Property 25.67%
Other 0.23%


Any thoughts? Bearing in mind that this is just my Managed Funds. I do have other shares but I'm not relying on them for income, just letting them sit and grow at this point (BHP and WOW and OMIP Funds).

So if there is anyone who could offer any comments, experiences etc that would be appreciated.


Thanks
Sharon

 

Hi Sharon, My thoughts would be that you're a bit light on international. Considering that australia only makes up roughly 2% of world market capitalisation it might be worth you increasing your international weighting. You know you can easiliy and cheaply get into global property securities as well with vanguard. Also, if its income you're after don't forget you can easily sell down units, you don't have to rely on "income" from the fund. In fact it can work out more tax effective that way...

 

Thanks for the feedback jscott.

I had also been looking at the CFS Colliers International Property Securities, having seen it mentioned here and it is a "Fund in Focus" on InvestSmart. I also thought I should have more international weighing but put it aside...why?....because I was/am confused about international investments and their risk, are they more complex with the Aussie dollar having an impact too? Am I making it more complicated than I should? Should I just make sure they meet my own critria like the others?

I had a look at Vanguard and couldn't see a global properties fund?

Is this because you then only sell down excactly what you need and pay CGT on that instead of paying income tax on all distributions whether needed or not? Is that how it would be more tax effective?

Thanks
Sharon

 

the vanguard international property securities fund is a wholesale fund, so you won't see it on their website unless you click the fin.dvisors link instead of the retail link.
There is a hedged version if you're concerned about currency risk. You can invest into this fund via a number of low-cost wrap accounts such as Macquarie wrap. When you combine the MER and the wrap account fee its still cheaper than investing in the retail funds.

Re: selling units - its because if those units have been held for more than 12months you get the 50% CGT discount that makes it tak effective.

Rgds,
Jason.