Discussion in 'Managed Funds & Index Funds' started by Redwing, 22nd Nov, 2006.
Has anyone looked at the Fusion Fund yet from Peter SPANN and Mac Bank?
Read through a bit of it yesterday. It is available through more sources than mentioned, namely I was sent the details by investsmart
InvestSMART.com.au - Newsletter
Reading through the document using the 100% finance there are a few twists. I am in another MQ fund with 100% finance and with the same MQ 'threshold management'.
The long and the short of it is that if the fund is in a loss making situation where the capital is at risk then all monies can be placed in cash deposits and no further distributions will occur. Futher to ensure that the fund stays liquid (capital stays the same) they can (and did ) make a distribution (on which you will pay tax) and then compulsorily reinvest these monies into the fund. In this way maintain the capital to invest.
The problem that I see is if the fund keeps under performing and they continue keeping the distributions then at the end of the investment you get your capital back but part of this is simply the distributions that you have had to pay tax on.
The particular MQ fund that I am in is the Multi strategy fund which in my view is under performing woefully. Entry $1 per unit currently .93 with a 7c distribution of which 2c was reinvested. My view isl that I only received my own money have to pay tax on the all 7c but only receive 5c. This is a working example of 'threshold management'
I'm not sure how the first fund P SPANN mentioned in his Investor Update from MacBank is going either?
I'm interested, but unsure..
Redwing: you'll save $ by going through a broker like above or Investment Australia - Managed Funds - Financial Planning - 2020 DIRECTINVEST.
P Spann is taking higher than usual fees. He's running a business so I don't blame him, but for my own sake I'd rather save money. 2020 is offering an MER of around 0.525% less than Freeman Fox is offering. I'm not sure if that's available to all as I have other business with them, but I'd expect so.
As for the fund itself, I've found it hard to come to a conclusion. On one hand you have 100% gearing (which in itself isn't a fundamental decider) and then you have threshold management (which can be good but can also suck away returns). Check out what TM would have done to the Colonial Wholesale Geared Share fund; it would have cut returns almost in half I believe. You do get the choice of 12 funds and the MER isn't too outrageous. The funds also seem quite good, or at least above par. I like the idea that TM is on a per-underlying fund basis, not on a per-portfolio basis.
Anyway, I’ve put my app in so we’ll see. I’ve been taking with Macquarie and they said I can still change the allocation between funds, so that’s my only real concern at this stage. For me the 100% gearing vs TM debate ends up positive because I'd rather average returns with low volatility at this stage.
Just having a look at Macquarie Geared Equities Investment Plus (offers Capital protection also) though I believe Adelaide Bank may have something similar as well
I'm also chatting to a local FP at the moment regarding options available for Managed Funds and leveraging into these as well as my main purpose of seeing a FP -
a SMSF to enable me to combine and invest both my wife and my super funds; she's not working due to the baby and wont be for a few years so her Super is just languishing or reducing, I see a SMSF as the best OR only way to combine our Super and who knows it may be cheaper than the costs with a Industry Fund
As part of my initial investigations I've looked at the Professional Specialist SMSF advisor Association , called SPAA
SMSF Professionals' Association
I've heard of a few such as SuperOutsource, SuperConcepts and www.nicholasneedham.com.au to do the administration and compliance requirements for a SMSF
Separate names with a comma.