Managed Funds Exiting Macquarie Funds

I currently have units in 2 Mac Funds:

Equity Enhanced Income Fund (heavily promoted by Peter Spann)
Multi Strategy Capital Protected Series 2 Fund


As at end of April, the income fund is performing at 8.33% while the multi strategy fund is at a woeful 4.44% as at end of March.

Given I am paying around 7.5% on the Macquarie loan I used to purchase these units, I have decided to exit the Multi strategy fund especially given I would have to prepay next years interest before 30 June.

I found it quite interesting when I asked Macquarie that I assumed I would not have to pay the interest given I was redeeming all my units prior to 30 June (redemptions are only allowed once a month, at the end of the month and your request has to be in 10 business day prior to that).

Their response was that they would have to check with the legal department because this was not normal practice. Surely I am not the first person to do this??

As it turns out they got sign off and I will not have to prepay the interest.

Any other forumites had similar experiences?

 

I to got sucked in by Peter Spanns Magic Macquarie products, however I got into Macquarie Newton and Macquarie Asia.

I put in my total withdrawel in on the 10th of May, you need to be in by 20 May so I would get out end of june (this fin year)

The other thing you will get slugged is a penalty if you have held the funds under 12 months, so be aware of that.

I gave these funds 1.5 years to prove themselves, and found them to be a joke.. All your doing is supporting the Macquarie Fee Factory.

even with your 8.3% return, thats pritty poor, considering you have risk, and only to return .75% above your interest rate is a joke. Essentially your only breaking even.

I however choose to pay quarterly in advance, so I don't have the 12 month problem. In the end you may need to pay it and wait a month before you get the refund..

Funny how all these structured products are crap!!! look at all the Equinox 1-6 funds, 1, 2 ,3 % returns!!

 

Damn!!!!!

On that basis it looks like I have left it to late to exit out of the Newton fund this year.

As mentioned these funds have been an absolute waste of time, and worse flagged a credit record against a fairly clean credit record for absolutely nothing except the Macq fee factory.

Unfortunately (or fortunately) these funds proved their lack of worth very quickly and detered me from entertaining any further investment with them. So something good came out of a not so good thing

I will diarise the required actions for next year.

Cheers

 

Can you imagine a performance of this kind of fund during the BEAR market
Probably .... you'll get broke

 

Perhaps the investment methodology would do better in a bear or flat market? E.g. writing covered calls may enhance returns during a flat market I suppose.

Just some contrary thoughts.

N.

 

crc_error

What sort of penalty did they hit you with?

Given if I put my withdrawal request in now , the units will be withdrawn as at 2 July ie I would have held the units theoretically for 2 days over 12 months, I should not have to pay a penalty but will check.

I have posed a question to Peter Spann on the Somersoft forum about the performance of the Equity Enhanced fund (under the thread called Peter Spann???). Will be interesting to see what, if any, his response is.

Gazza

 

Basically the problem is that if you lose money trading shares than you will probably lose money trading options.
Options are not a substitute for not knowing what you are doing. If you get it wrong, the game is over.
If investment methodology does not work in a bull market (most of the players are making money) what chances are that same or different methodology will work in the bear/flat market (most of the players are losing money).
I would not bet even 1 cent on it.
In the currently bullish market not making money is a very difficult task indeed.

PS - From Peter Spann...

"Unfortunately one of our property funds has not done well so far. It’s down between 30% and 50%. Not a good situation for the investors (or us) at this stage".....

AMEN to this.

 

Meanwhile the Navra fund heads for another 20% year..
But if that was mentioned elsewhere , it would be slammed

My regret is not getting into the Macquarie Property income fund - thats one Mac fund that HAS performed.

 

"Meanwhile the Navra fund heads for another 20% year..
But if that was mentioned elsewhere , it would be slammed"

Yep...and without writing covered calls....would you believe that ??
But still .... somebody might argue that 20% is not enough....

Loss of 50% requires 100% gain to just break even. It sounds like "Mission Impossible 4"

 

Actually it doesn't. The reason the option strategy doesn't work well in a flat market is the the premium for the options dry up. I was trading options back in '99 and after the crash all the premiums dried up as a number of market makers exited the market.

The interest in options would appear to be at it's highest when we are in a bull market.

Cheers

 

I'm with you there, I was all set to go last year, had the forms filled out but decided against it in the end. Now its one of the best performing funds around. Not all is lost though, the Vanguard property securities fund had a ripper of a year.

I was also considering the Equinox products so I'm glad I didn't go ahead.

 

How did you go with Macq? Did you get ny answers re cashing out?

Cheers

 

Handyandy

You wouldnt believe how long it takes to get answers from them. Still waiting for final confirmation.

Gazza

 

Where did you have in mind David

Cliff

 

Unfortunately there is an exit fee. 1/12 of 1% of the exit unit price multiplied by the number of months before the cutoff surrender date multiplied by the number of units. How complicated it that?

The surrender date is 1/7/09 so it will cost me a couple of grand to get out. Given I received a rebate from Investsmartto get in , I'll end up losing a couple of grand but I can't see this fund turning it around. If it couldn't return more than than going interest rate in fantastic conditions, I can't see it improving, so I'll walk away now and put it down to experience.

 

I haven't got all the details of my withdrawel yet, but my understanding is you only pay a exit fee if you get out in the first 12 months. I should charge them a fee for their pathetic result!

Good luck, I'll keep you updated..


Let me know what spann replies to your question! Do you have a link to the thread?

 

Here's the link:

Peter Spann??? - Somersoft Property Investment Forums

GSJ

 

Thanks for the link GSJ.

Peter Spann's answer was along the lines of ' the fund will return around 9.9% this year and given people borrowed money at 7.6% , this is a good result'. He also blamed the other strategy (income timing fund) in the fund for the poor performance saying his strategy (buy/write) had performed really well. Didn't provide any figures to back that up and didn't respond much to the question about the poor performance in such good conditions and how it would therefore perform in bearish conditions.

For what it's worth I will leave my borrowed money in the fund for another year and then reconsider. I will be a couple of grand ahead so will offset the couple of grand loss from the multi strategy fund.

 

yeh I don't know about leaving money in there for another year.. You would be funneling your money into something more solid.

I can't see how most of these funds have returned pathetic returns, considering we are in a bull market.

You can't make money on covered calls in a declining market, nor on dividend chasing, if the stocks are going down. premiums will die in the ass under those situations.

Personally I have bailed on these funds, as the only people profiting from them is the Macquarie Fee Factory Machine TM.

 

Gazza, what other funds do you hold?

CSJ, thanks for the link.. Just shows that Peters strategies really are nothing more than hype. He was just lucky in the past to catch booms in property to make his money, and now he realizes there is more money to make in collecting fees, so he to realizes setting up another Fee Factory (Macquarie TM) is the way to go.