Managed Funds Big fund names disappoint

Discussion in 'Shares & Funds' started by dkmc, 31st Aug, 2007.

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  1. dkmc

    dkmc Well-Known Member

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    dkmc, 31st Aug, 2007
    #1
  2. Tropo

    Tropo Well-Known Member

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    Tropo, 31st Aug, 2007
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  3. Simon Hampel

    Simon Hampel Founder Staff Member

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    This approach they take in regards to high levels of distributions being bad does not tell the whole story and does not consider that managed funds might be part of a structured portfolio of investments as opposed to a stand-alone investment.

    ... and that last paragraph is very presumptive - high levels of trading might actually be adding value ... I think it is wrong to automatically write off all funds which "trade" as ineffective.
     
    Simon Hampel, 31st Aug, 2007
    #3
  4. Rob G

    Rob G Well-Known Member

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    I guess in a way income funds have replaced the annuity providers of old (I don't mean pensions).

    They can fulfil a need for a regular income stream.

    The main difference is that an income oriented managed fund would give better returns because the investor bears some risk to allow the provider to make higher yield market based investments. Don't forget these must be realised on a regular basis to actually return the income to the investors (doh!).

    An annuity provider who is locked into a contracted rate and had to return any capital at the end would make conservative investments at about the cash rate.

    Comparing to accumulation funds does not serve any useful purpose as they are effectively different asset classes, except maybe to generate controversy to sell a story.

    You need to invest asset different asset classes according to your financial objectives - assuming you have one.

    Cheers,

    Rob
     
    Rob G, 31st Aug, 2007
    #4
  5. Simon Hampel

    Simon Hampel Founder Staff Member

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    We also need to be careful to differentiate between what we call "income funds" - investing in mortgages or commercial property and other traditional income based investments, versus the newer type of fund (eg Navra) which aims to generate income by actively trading some aspect of the market.

    These are again very different beasts with very different risk profiles.
     
    Simon Hampel, 31st Aug, 2007
    #5
  6. Nigel Ward

    Nigel Ward Well-Known Member

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    Perhaps you should write to Alan and Scott point out the false assumptions in his article?

    N
     
    Nigel Ward, 31st Aug, 2007
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  7. Simon Hampel

    Simon Hampel Founder Staff Member

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    I don't think it would be worth the effort - he's preaching to the mums and dads - they aren't necessarily looking at structured portfolios and just want something simple.
     
    Simon Hampel, 31st Aug, 2007
    #7