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Confused about results numbers

Discussion in 'Managed Funds & Index Funds' started by islandgirl, 12th Nov, 2006.

  1. islandgirl

    islandgirl Well-Known Member

    Joined:
    18th Sep, 2006
    Posts:
    118
    Location:
    Middle of beautiful Moreton Bay, Qld
    I'm confused about results. I am trying to research funds that would suit my needs. From reading on the forums I have a dozen good candidates. Basicially I am working on income generated in preference for growth.

    What I have been trying to do is spreadsheet out the results for each year for comparison as well as work out the distributions each year so I can see which ones will give me the result I need.

    However when I go onto the fund website I get different results from tradingroom.com.au - why? and tradingroom does not have the distributions. I'm assuming the results are distributions and captial growth combined.

    Can someone point me in the right direction!:confused:
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,623
    Location:
    Sydney, Australia
    Many sites like tradingroom.com.au show a combined return figure working backwards from today (or the beginning of the previous month or quarter).

    The standard method of calculating return is to simulate an investment of $10,000 at the inception of the fund and reinvest all dividends, taking into account management fees and entry fees and such. You would then work backwards and calculate the percentage change between the value today and what it was this time last year (or 3 years ago, 5 years ago, etc).

    If the other sites you are using to compare use a different method, or a different period of time, you will get different results.

    If you are only interested in the distributions from each fund, you cannot use the standard performance measurements to get an accurate comparison.

    Comparing distribution figures isn't easy either.

    Distribution is quoted as a cents-per-unit figure, and often represented as a percentage. This percentage is based on the unit price at the end of the distribution period. It tells you that if you invested on the last day of the distribution period, you would receive X% of your investment back in distribution. But you aren't likely to always invest on the last day of the investment period, so you'd want to take into account the distribution you got from an investment at some point before the end of the period. But then, you'd need to know the unit price at the time you invested ... it all starts to get very complicated.

    Perhaps a good way of comparing would be to look at each financial years figures, calculate how many units you would get for a $10,000 investment at the beginning of the financial year, and work out what the total distribution payout for the year would be based on that number of units. You need to do it on a yearly basis rather than quarterly to accurately account for funds that distribute quarterly versus semi-annually versus annually.
     
  3. islandgirl

    islandgirl Well-Known Member

    Joined:
    18th Sep, 2006
    Posts:
    118
    Location:
    Middle of beautiful Moreton Bay, Qld
    Thanks Sim
    I appreciate the info. I just wish I had more time to sit down and work thru this.