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CFS Property Funds

Discussion in 'Managed Funds & Index Funds' started by Compleks, 31st Aug, 2007.

  1. Compleks

    Compleks Well-Known Member

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    Hey guys.
    I just recently got into investing, and currently have a small amount of money in the CFS 452 geared Australian share fund.

    I wan't to expand my portfolio and have been thinking of investing in a property fund as my next step. I've been looking at the various CFS propery funds, and there are quite a few of them.
    I'm just wondering if you have any opinions/suggestions on the various funds. They all appear fairly similar, in performance and MER's.

    I've been looking at another CFS fund out of convenience, basically. I would be happy to invest in a fund which isn't managed by colonial, if it's appropriate.

    Thanks for reading.
     
  2. MJK

    MJK Well-Known Member

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    I like APN 2 property. It weathered the correction nicely and is showing 3.5% for the month.

    PS. I pay my finacial Advisor trailers for these recomendations and give them to you for free. Does that make me a fool or just a nice guy?:eek: :rolleyes:

    MJK:D
     
  3. Simon

    Simon Well-Known Member

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    The latter.

    Why did he recommend them? Just for property exposure or is there something specific about this managent team?

    Are they a growth or income fund?

    Simon
     
  4. voigtstr

    voigtstr Well-Known Member

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    I wonder if Colonial First State Ws Prop Sec Fund will pick up now?
     
  5. Compleks

    Compleks Well-Known Member

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    Thanks for the replies so far.

    I had a quick look at the APN 2 property fund. I'm still new to this, but it seems like a decent option.

    Does anyone here know if I can manage non CFS funds through my CFS account? How would I go about getting them into my CFS account/portfolio?

    Take care.
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'm not sure if you can ... CFS isn't strictly a "portfolio" service - they are a fund manager in their own right ... they have their own range of funds, and they also "resell" a selection of other funds under the CFS branding (as opposed to allowing you to invest directly into a 3rd party fund).

    Many of their funds are also multi-manager funds where they outsource the management to a selection of 3rd party fund managers. Naturally, you pay more for these funds (they all want a cut of the fees!), but then, you'd also pay for a portfolio service too.
     
  7. Compleks

    Compleks Well-Known Member

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    Thanks Sim.

    How do you guys manage all your funds? Do you find it difficult if you have invested in a number of different managers?
    I like the convenience of Colonial, and their online features. But I don't want to limit myself to their products just because it's easier to manage.
     
  8. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    What is it you are trying to "manage" ? Are you just wanting to track the current value of the funds ? Excel will probably do the job for you.

    I currently use an excel spreadsheet myself, although it has become too complex to post here.

    I am currently building a website which will allow you to track your own portfolio online - basically an online version of my spreadsheet, including the ability to track margin loans, generate capital gains reports and also generate all sorts of statistics and graphs showing the performance of your portfolio. Hopefully it will be ready by the end of this year :(
     
  9. voigtstr

    voigtstr Well-Known Member

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    Puts hand up to be a beta tester!
     
  10. Redwing

    Redwing Well-Known Member

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    Here's Wesfarmers Chart, nothing to write home about...I tend to look for a share in a sustained uptrend which has been difficult of late :D

    With the SMSF i looked at the ASX top 50 (By Market Cap) a Month or two ago and found it hard even then
     

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  11. Compleks

    Compleks Well-Known Member

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    That sounds cool. Good luck with the program.

    Is there anything I need to know in terms of income (property) funds? Most of the property funds, especially the top performing ones, seem to be income producing funds.
    What's the difference between income and growth? Is it just the frequency at which they pay distributions? I plan to re-invest all dividends at this point anyway, so would it make a difference?

    I've heard that income funds may have some tax implications? Does that apply if I re-invest the dividends?

    Thanks guys.
     
  12. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yes, funds which produce higher levels of distributed income are not as tax effective (in some situations) as funds which produce mostly unrealised capital gains (growth).

    Even if you reinvest the distributions, you will need to pay tax on them.

    As part of a structured portfolio, high income producing funds can be useful (tax becomes less of an issue if you have negative cashflow investments to offset the income against) - but on their own, you end up losing some of your returns each year (as opposed to a growth fund, where you only lose the returns to tax once you sell in the future).

    You also need to take into account the nature of the income being distributed.

    If you are investing in your own name, this is not as important, but in a trust - if you have negative cashflow investments (eg real estate), and you are looking for income to offset that ... a fund which distributes high levels of realised capital gains is not going to help you much, since capital gains are distributed separately to income from a trust (ie. you cannot use realised capital gains to offset an income loss). {EDIT: this is not actually correct - see comments from NickM later in this thread}
     
    Last edited: 7th Sep, 2007
  13. Compleks

    Compleks Well-Known Member

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    Thanks Sim, you're very helpful.

    What's the easiest way to tell if a property fund is income or growth? Does it just depend on the frequency of distributions?
    Some of the funds seem unclear to me .
     
  14. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    You need to find out what the historic distributions have been - there are several sites you can get this information from ... if the information isn't available on the fund manager website, try tradingrooom.com.au or directaccess.com.au - there are others too.

    The thing is that a fund may be growth oriented, yet still distribute high levels of income (usually as realised capital gains), so there is no "black & white" definition of income vs growth - it's more about the way they approach investing and how they generate their returns.
     
  15. MJK

    MJK Well-Known Member

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    Mainly income & property exposure. I prefered income based funds when we where setting things up so I went with a mix of property and Australian Shares. Actually I didn't ask about the management team. I just went with the recomendation at face value.

    MJK:D
     
  16. Venger

    Venger Member

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    Hi Sim,
    I'm scratching my head over this one as it differs from my (investor only, I'm not a tax professional) understanding of trust distributions (family/unit/hybrid not a commercial widely held trust).

    If my family trust distributes, it can determine which types of trust income
    (ordinary, franked, tax deferred, capital gains etc) available to the trust are distributed and to which beneficiaries.

    If my hypothetical trust contained a rental property, with

    Rental property Net loss of $20,000
    Navra Net Income of $10,000
    Net Capital Gain (held >12mths) of $40,000

    Then would I not be distributing $30,000 to benificiaries, assigned for tax purposes as -20Krental+10Knavra+0.5*40kcg = 10k of distributions in the form of net capital gains (although it may as well distribute the navra income as at this point the 50%CGT discount has already been applied by the trust and it has the same tax impact for the beneficiary)

    I know of no reason why capital gains in a trust can't be used to offset net rental property losses, but please advise if you think I'm wrong and I'll follow up with the ATO for a definitive answer if necessary.
     
  17. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I suggest you do check on this - I was always lead to believe that capital gains from a trust are distributed separately to income, and thus income losses within a trust cannot be offset by capital gains from that trust.

    I'll get Nick to confirm if my understanding is correct.
     
  18. Compleks

    Compleks Well-Known Member

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    Haha, when you guys start talking like that it makes me realise just how much I have to learn.

    Could someone help me work out whether this fund is for growth or income? I know it says both, but will I be paying tax on all the dividends, or only when I exit the fund?
    Fund Profile

    I checked the PDS, but I couldn't really find any mention of it. The only thing that caught my eye was the distributions, which appear to be quarterly.

    Help?

    Thanks again.
     
  19. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    You always pay tax on both - dividends when you earn them and then capital gains when you exit the fund. It's just that an income focussed fund will see you pay more now and less later, while a growth focussed fund will see you pay less now and more later ... and most funds are somewhere in between!!

    Fund Details - CFS MIF - Property Securities Fund - Colonial First State Investments Limited - Direct Access Australia

    1 year total return: 18.99%
    Income return: 14.72%
    Growth return: 5.4%

    ... so as you can see, it pays more income than growth - thus I would move it more towards the "income" category.
     
  20. Compleks

    Compleks Well-Known Member

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