Managed Funds Best Oz wholesale funds?

I'm currently looking at Colonial First State's FirstChoice Wholesale Australian Share Fund - anyone have an opinion, maybe know a superior fund please?

 

I didn't even know there were geared funds
No, I play internet poker for a living and currently have about 600k in
various funds, Platinum Asia and Japan, AXA Wholesale Global Equity Value Fund, Advance Asia Fund and Hunter Hall Value Growth Trust. I've got a few hundred k's more in cash looking for a new home, and the Oz market
is starting to look increasingly attractive. Timeframe is long term

 

Thanks very much Sim! I'll check that one out...

 

I would probably advise against gearing. Gearing can wipe you out in the case of a market correction/crash. ie a 50% fall in shares, = a 100% loss when geared at 50%

Select some quality australian share funds, and invest into them.

It also seems like your investing a large sum of money, you might want to consider some professional advise from a financial planner. They can draw up a plan for you, set goals on where you want to go, and coach you through your investing journey.

Alternatively if you prefer to learn yourself, I suggest going to the investing section of a bookshop and grab some books.

In your case I would suggest a financial plan, as if you make a mistake, then you can loose everything.. the couple thousand dollars a plan may cost you will be well spent.

I think your choice of FirstChoice Wholesale Australian Share Fund is a good one, and you wont go wrong with it over the long term. There are no right or wrong answers in selecting managed funds.

 

I had a few hundred in that fund from 2001 until just recently. The thing that motivated my exit was getting clobbered with tax. CFS churn the portfolio, so at the end of the year you'll get a statement from them saying "your $X is now worth $X+y, congratulations. Oh and by the way, you have to send $60k to the tax man".

The effect of this is not to be underestimated, as the gain is a paper gain, but the tax expense is real cash. I just got so sick and tired of getting big tax assessments that were not related to any profits I'd actually seen -- I don't mind paying tax on shares I've chosen to sell myself, and for which I've received the proceeds -- but the CFS churning feels like an unrealised capital gain but is taxed as a realised one. Sucks big time.

I sold down my CFS Aust Wholesale and bought STW.

 

Waimate01, thats a good point. unfortunatly not many fund managers consider churn as much as they should. This is why I think a more passive fund may be a better choice in some cases.

The other option for the OP is to buy a news letter like the rivkin report.. they have a blue chip portfolio in it currently which is high yielding top 100 companies x 10.

Its a buy and hold stratergy in top australian companies. there is nothing wrong with buying direct shares over managed funds.. at least the MER will be 0%!

 

Does the STW fund churn much or are the distributions pretty much just income with a small amount of franking? Also I would have thought STW would have been fairly tax effective as they would have sold those shares held for more than 12 months in preference when there is a profit to be realised to minimise capital gains.

 

STW is an index fund, so there tends to be very little churn.

Interestingly, CFS has a wholesale index fund, but they manage to churn it. Not as badly as their non-index funds, but still way more than an index fund should.

 

yes well I suppose CFS have to justify their fees don;t they. If they did nothing but sit on the portfolio (as they should in an index fund) then there would be no need for a fee. I like the STW set up though especially since I can control what price I buy the units at so there are no surprises.

 

Actually I like the sound of CFS's internally geared fund - anyone know if much churning happens in that one?

Re the Rivkin Report, I thought Rene topped himself - who is
running that now?

 

"Re the Rivkin Report, I thought Rene topped himself ...."

Sad end for Rene Rivkin - Business - www.smh.com.au

 

STW and ARG what are the differences pls ?

Can someone please educate me ?

Know one is an ETF and the other an LIC ...but in terms of long term performance / returns / capital growth how would these compare or can you not compare as apples with oranges ?

I'm looking to get into the market with a small sum .. say $1000 ...and then regularly feed through ..I would buy either through Commsec or Etrade ..
how would these compare with each other ?

Thanks

 

and amounted to far greater risk and volatility to gain the same result.

If we have a flat period which many suggest, all that gearing will just cost you interest.