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Challenger Funds?

Discussion in 'Managed Funds & Index Funds' started by sharejunky, 19th Oct, 2007.

  1. sharejunky

    sharejunky Well-Known Member

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    My Challenger China w/sale fund is up about 125% (!) in the last year and I was considering diversifying into another Challenger fund (probably the Asian fund.) Anyone think this is a good idea, or are there compelling reasons to go for some other fund? (Or just leave it all in the China Fund and shoot for the moon? :) )
     
  2. perky

    perky Well-Known Member

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    Challenger does look compelling.
    Checking on my BT margin lending though - they only offer 45% lend for the China Fund.
    So looking for the best lend compared to rate of return, the Challenger Greencape High Conviction fund at 19.9% return for last 6 months AND a 75% lend (same as Navra) looks quite good to me.
     
  3. sharejunky

    sharejunky Well-Known Member

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    Hmm - I don't borrow to buy into funds, I just pay cash. Do you get
    a good interest rate?
     
  4. AsxBroker

    AsxBroker Well-Known Member

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    Hi ShareJunky,

    That is not diversification. Diversification is spreading your risk by putting your assets in several categories of investments. There is probably a very high correlation between the China and Asian fund. Hence this is not diversification.

    I would strongly suggest you find out how much of the Asian fund is invested in China...

    If you wanted to diversify you might want to diversify geographically. Whether this be Australian, European or US you would have to mull over it.

    Cheers,

    Dan

    This is general information, before making an investment decision speak to your FPA registered financial planner, accountant or tax adviser.
     
  5. sharejunky

    sharejunky Well-Known Member

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    Actually I was thinking of maybe leaving 1/3 in the China Fund and putting the rest into the Asia Fund (I've checked, they have very low exposure to China.) I'm already in a few other funds: Platinum Asia and Japan, Hunter Hall VGT, AXA w/sale Global EV Fund and Advance Asia Fund. Maybe I've got too many eggs in the Asian basket?
     
  6. samaka

    samaka Well-Known Member

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    Yeah I thats what AsxBroker is getting at. You haven't said how much you have invested in other areas though, so no one can answer that question for sure.
     
  7. Simon

    Simon Well-Known Member

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    Some people feel that diversification is a patrh to mediocre returns, diluting your best performers with mediocre ones.

    Of course we all understand the argument for diversifying but why not consider the potential of not doing so?
     
  8. sharejunky

    sharejunky Well-Known Member

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    True, I could have put it all (about 600k) in the China Fund and done far better. I could also have put it all in the Japan Fund and be doing far worse. Until I find a good reliable crystal ball I'll stick with the diversification option :)
    Actually I'll probably be borrowing to invest a lot more, which is something I'm currently researching.
     
  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Profile: Challenger - Greencape Wholesale High Conviction Fund (HOW0035AU) is a wholesale fund (no retail equivalent that I can see), with a minimum $50K investment. It has also only been operating since Sept 2006 (just over 12 months), so not a long time to get a picture of comparative performance.

    That being said, for an ASX200 based fund that doesn't gear (although it does use derivatives), it's done pretty well so far.

    LevEq offer 70% LVR on this fund, which they don't often do for newer funds, so they must think it is okay.