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Challenger China Fund - Lost $1k

Discussion in 'Managed Funds & Index Funds' started by archangelsupreme, 9th Nov, 2007.

  1. archangelsupreme

    archangelsupreme Well-Known Member

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    Ok, not a good experience so far with Challenger China share....entered in mid-December, and it hit an all new low today for me....loosing almost $1k from initial start of $8k.

    Ouch what's wrong with the market recently....:mad::mad:
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    It's called volatility, and it's pretty normal.

    The markets we've seen over the past 3 years have shown abnormally low volatility. We're just returning to more normal levels now.

    It's not nice - but it's nothing to be overly worried about for a long term investor.

    This chart might look a little scary to the new investor:

    [chart=CF;HBC0027AU;last3;perc;20071109]Challenger China Share Fund[/chart]

    ... but to put it in some context, let's add moving averages:

    [chart=CF;HBC0027AU;last3;mav;20071109]Challenger China Share Fund[/chart]

    ... and you see that it's only just below the 50 day MAV ... which is not anything to be concerned about just yet. Let's add more context:

    [chart=CF;HBC0027AU;lasty;mav;20071109]Challenger China Share Fund[/chart]

    It's down 25% from its peak, which is not nice ... but funds growing as rapidly as the Challenger China Share fund often show high volatility (which works in both directions - both up and down).

    Such is the "Challenge" of investing in a highly performing fund ... you can't be sure if it is at the top until after the event.

    If something fundamental has changed in China to cause the fund to no longer be viable, then it's time to think carefully about it ... otherwise, just hang on and enjoy (?) the ride!
     
  3. crc_error

    crc_error The Rule of 72

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    sorry to say but what do you expect from a fund up 105% in the last 12 months! if it can go up so much, it can also come down to the same extent..

    thats why diversification is important.. investing in different sectory..

    like Sim said, your view should be 5y+ so you need not worry..
     
  4. vandalic

    vandalic Active Member

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    As long as you are still holding, it's only a paper-loss.

    If you are comfortable with the fund you are in, and remember why you initially bought into the fund, you should focus on those goals rather than the daily movements.
     
  5. DaveA

    DaveA Well-Known Member

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    sim...

    from memory didnt your strategy about exiting funds something like once it drops below the 20 and 50 day but above the 100 day you jump out? (not a hard and fast rule i know)... i just remember something along that line...

    You can pm me the answer if you are worried about liability or something...
     
  6. Tropo

    Tropo Well-Known Member

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    "then it's time to think carefully about it ... otherwise, just hang on and enjoy (?) the ride!
    __________________
    Sim'"


    Do I see a double bottom on the 1 chart ?:eek:
     
  7. archangelsupreme

    archangelsupreme Well-Known Member

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    Type, should've been mid-October...LOL

    I'm not going to exit, just want to flag my experience so far....this is definately the worst hit i've taken so far. The Macquarie Small Companies Growth Trust started out about -$500 for me, but is now more than $1k up for me. Started in mid-September.

    Do you think the interest rates had something to do with it recently....though for a China Share Fund, why would Australian conditions affect China so muhc.....it was down from $2.7-$2.8 per unit about a week ago and dropped to about $2.5 yesterday....pretty large drop.
     
  8. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    No, it had to be trending down below the 100 day line to avoid selling too early ... but it was never really finalised as a strategy - still in development. I'm not entirely happy with it really ... works okay for drifting markets, but not for corrections.

    I'm rethinking my strategy at the moment - there's a couple of aspects I haven't quite figured out the best approach to for funds (might work okay for shares, but not for funds).
     
  9. Compleks

    Compleks Well-Known Member

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    That's nothing, you should take a ride on the 'Colliers Geared Global Property Securities' roller coaster.
    Now that is intense.
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    mmm ... was very bad timing to launch a geared global property fund - in retrospect!

    [chart=CF;FSF0877AU;lasty;mav;20071110]Colonial First State Colliers Geared Global Property Securities[/chart]

    Will be interesting to see if the fund can recover ... as of end of June there's only $1.76m directly invested in that fund ... so it would have very high internal transaction costs at this point - especially with the gearing.
     
  11. Compleks

    Compleks Well-Known Member

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    Oh well, live and learn.

    I'm going to stick with it, as it's a long term investment. Maybe I'm just naive, but I still think it will turn around (eventually).

    If only I didn't check the figures so often. I've been taking a bit of a beating lately with two property funds making up a large part of my portfolio.
    I should have enough now to get into an international share fund, but I'm not sure if I want to enter the Platinum Fund anymore.

    Time to do some thinking/research I guess.
     
  12. samaka

    samaka Well-Known Member

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    Why not an international share ETF?
     
  13. crc_error

    crc_error The Rule of 72

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    I would wait till the australian dollar stabilizes.. its our raising dollar kiling the returns of most/all unhedged international funds..

    but if your regularly investing, it doesn't matter.. you average out your entry points anyway over the longer term..
     
  14. coopranos

    coopranos Well-Known Member

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    On 4 Oct and 8 Nov (assuming nov is at bottom!)?
     
  15. Insight

    Insight Brisbane Buyers Agent

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    It's a loss and very real, whatever you call it.
     
  16. archangelsupreme

    archangelsupreme Well-Known Member

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    I think I might use this opportunity to pump some extra money into both the Challenger China and Geared Share Fund....you know, capitalise on these low prices.

    Just read an article yesterday in Herald Sun....and the People are expecting this downturn to continue for a couple of weeks yet (probably up until the election)...before making a recovery up to Christmas.
     
  17. pinkeye

    pinkeye Active Member

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    I was about to send off an application with a cheque to buy in to this fund today. :eek: But now I am wondering if I should wait for it to start trending upwards again before I send the application. :confused:

    But I suppose nobody knows when the trend will change anyway. If you were in my position, would you send in the application today?
     
  18. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    What would it mean to you if the fund dropped 10% tomorrow ?

    What would it mean to you if the fund dropped 20% tomorrow and then rose 50% the day after ?

    Do you think the fundamentals in China have changed such that there is little growth left in their markets ?

    What is your timeframe for the investment ? 1 week ? 1 year ? 10 years ?

    These are mostly rhetorical questions - I'm not expecting an answer ... you just need to think about your reasons for investing.

    Personally, I would wait to see that the downtrend has reversed ... but that doesn't mean waiting for the bottom ... that means waiting PAST the bottom of the market and seeing a definite uptrend again ... which of course also means leaving possibly 10%+ of your gains on the table!

    Others may be more inclined to dollar-cost-average your way in over several smaller investments to smooth out the entry point just in case ... that's a reasonable way to do it as well I think.

    Who knows what will happen ? I don't!
     
  19. crc_error

    crc_error The Rule of 72

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    Since a managed fund can take 1 week to setup, I hardly think one can time the entry well into a managed fund! even if you do watch it, and it turns around, it can move very quickly.. but the time you pick this up, send off your application, new account setup etc..

    If one is worried about getting in at the wrong time, I like your idea of averaging in your entry.. say 1 entry point every 4 weeks etc..

    Since the fund has fallen, you can be happy to know that you ARE getting in at a discount, than say 1 month ago..

    since your time frame should be 5 years plus for this fund.. in 5 years time this little glitch wont matter..
     
  20. pinkeye

    pinkeye Active Member

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    For better or for worse, I just sent in the application. I am investing the minimum amount ($5000) so further drops (or gains) won't have a big impact either way. Thanks for your advice :D. This will be an interesting experiment / learning experience.