Join our investing community

Anyone Invest in Macq. Reflexions?

Discussion in 'Managed Funds & Index Funds' started by Young Gun, 12th Nov, 2008.

  1. Young Gun

    Young Gun Guest

    Just had a peak at the performance for the june 2008, out of curiousity for those that did and what an ugly sight it is!

    performance

    Threshold Management has reduced exposure to many of the underlying investments to between the ranges of 0% - 27%. With falls in capital value of between -21% to -49%, these funds are never going to make their money back!

    Capital protection is great but thresehold management in the current climate of high volatility is absolutely the wrong way to go. I prefer the OM-IP stlye of protection where from day one they put $0.70 away in a bond and go nuts on whats left.

    Just use this as a warning if your thinking of using a capital protected product, look closely and see how they are protected.
     
  2. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Young Gun,

    Ouch - That'll leave a sour taste with some investors...

    Personally I prefer the AXA North platform, you get your high quality funds and you can protect yourself from the downside just like buying car insurance and you can turn it on or off when you want! Without selling into cash...Take funds out when you want! etc...

    Cheers,

    Dan

    PS This is general information. Before making an investment decision speak to your FPA registered Financial Planner.
     
  3. hawd69

    hawd69 Member

    Joined:
    24th Nov, 2015
    Posts:
    13
    Location:
    Australia
    hi!
    I am looking to speak with anyone who was actually invested in reflexion.

    Please message me if you read this as I have really interesting news regarding this product!
    Thanks,
    hawd69
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,661
    Location:
    Sydney, Australia
    FWIW, Perpetual Protected Investments had exactly the same problem. The markets fell far enough that they reached their threshold, ended up 100% in cash to ensure they could meet their capital guarantee obligations and would never make any money.

    The catch is (and this was only mentioned in passing in the PDS!) was that in order for the capital guarantee to kick in, you had to pay any remaining interest on the loans - so in the PPI case, when in year 2 they went to 100% cash, you still had 5 years worth of interest to pay just to get your capital back.

    When you're sitting on a 30% capital loss, but the alternative is to pay 42% in interest (100% loan * 8.4% * 5 years) ... you're kind of screwed either way.

    Capital guarantees don't come for free and you have zero flexibility with many of these products.

    Needless to say, they kind of went out of fashion after about 2008/2009.