Have a situation for those in the know: Let's say an investor puts $136,000 into Navra with a margin of 50%, meaning they got a $136,000 margin loan. So the total amount invested is $272,000. They receive a distribution from Navra of approx. $13,000 which is re-distributed back into the fund. For ease of the example, let’s say the unit price on the day they buy back in is $1.09 and that they bought the original units at $1.18 (just as an example). What I would like to know is: - how many new units would they get at $1.09 if they margined the entire amount to 60%? That is, the original amount of $136,000 plus the $13,000. How is this calculated? Mark

Here's how it works: $136,000 capital + $136,000 margin = $272,000 @ $1.18 = 230,508.4746 units $13,000 distribution @ $1.09 = 11,926.6055 units Total units = 242,435.0801 Current value @ $1.09 = $264,254.24 LVR = 136000 / 264,254.24 = 51.47% Now if you are actually wanting to increase this LVR to 60%, you could purchase an additional $22,552.54 worth of units using the margin loan to take the total loan to $158,552.54 with a fund value of $264,254.24 $22,552.54 @ $1.09 = 20,690.4059 units extra

Sim, I can follow most of what you wrote but you lose me at the end... as i understand it.. if mark buys an extra $22,552.54 worth of units, the loan indeed goes up to $158,552.54 ($136,000 + 22,552.54) but the total fund value will now go up as well from $264,254.24 to $286,806.78 ($264,254.24 + $22,552.54) and the LVR will be 55.28% not 60%. this is how i calculate it (let me know if i'm wrong and where): $264,254.24 (current value of fund) -$136,000.00 (what you owe the margin lender) =$128,254.24 (this is YOUR share of the total value at the current unit price) if you now want to margin this at 60% then: $128,254.24 / 0.4 = $320,635.60 (this is the new total value of money invested) so, $320,635.60 (new total value of fund) -$128,254.24 (YOUR share of this new total value) =$192,381.36 (margin lender's share of new total value) ie you will borrow an extra $56,381.36 (on top of the original $136,000.00) to bring the LVR (at current unit price) to 60%. here it is: $192,381.36 (margin lender's share of new total value) /$320,635.60 (new total value of fund) = 60%

Doh ... you are absolutely right talbashan ... I was working on a spreadsheet, got distracted, when I got back to it I realised I had made a mistake, and then I made another mistake thinking I was fixing the first mistake!! That's what you get for rushing. Sorry Mark ... you could indeed purchase approximately a further 51,725 units @ 1.09 = $56,381 extra.