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International Shares Fund Suggestions?

Discussion in 'Managed Funds & Index Funds' started by crc_error, 6th Aug, 2008.

  1. crc_error

    crc_error The Rule of 72

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    I'm looking at investing into a international shares managed fund.

    Originally I was interested in the Platinum funds, like the brands fund or the straight international fund. I like the scope of the straight fund, but I feel the fund is to big to be able to benifit from above average potential gains. The brands one is smaller, hence more to my liking, but the scope of the fund seems to be big branded names.

    I am investing into the hunter hall global ethical fund to get small cap OS coverage, so looking for a value large cap unhedged fund.

    Any suggestions on some funds I can consider? Since our dollar is likely to start to fall, OS shares will benefit from the dropping dollar.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    How about the Platinum Unhedged Fund? Similar investment strategy to the Platinum International Fund (but not exactly the same), is unhedged and has a much smaller FUM (around $55m according to TradingRoom).
     
  3. crc_error

    crc_error The Rule of 72

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    Thats a idea, so that fund is a seperate fund to the main one? Why are they seperate anyway, whats the difference between the two?

    I looked through those slides on how to choose a managed fund, and points made in there were good.

    I like the fund manager to be run by the owner, rather than a big bank, this way the top people don't get poached. Even better, the crew will most likely have their own money invested there as well.

    Plus I like the idea of value, as suggested. Plus I don't want a big titanic fund, I want the scope for flexability within the fund.

    There doesn't seem to be to many decent international fund managers out there!!
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yes, a completely separate fund that they started a couple of years back.

    There are two main differences - unliked the Platinum International fund which holds both long and short positions and hedges currency exposure, the Platinum Unhedged fund is a long only fund and does not attempt to provide risk protection from currency either.

    Their main argument in favour of the fund is that hedging is not a guarantee of returns - and can actually work against you (eg shorting a stock that subsequently goes up in value).

    They share largely the same strategy for stock selection, and I believe there is some cross-over in portfolio holdings, but since the Unhedged fund has a goal to maximise returns in AUD without hedging, it will tend to approach things a little differently when it comes to assessing the potential currency impact on an investment.

    Probably because it is really really hard to get it right. There are literally thousands of companies listed on stock exchanges worldwide - and you can't possibly be an expert on every country and every stock!

    It tends to cost more to run such a fund, due to the amount of extra effort required to do all the due-diligence.

    Specialist sector and/or region funds tend to be seen as better investments because you will get a hot sector or region (eg Australia has been hot over the past few years, as are resource stocks worldwide) ... and thus these specialist funds tend to get all the exposure and interest (at least while things are going well!)

    I think broad funds like those from Platinum tend to be more conservative overall and will under-perform over shorter periods compared to the various hot sectors/regions, but should (in theory) still do consistently well over a longer period.
     
  5. crc_error

    crc_error The Rule of 72

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    Hi Sim, thanks for that. I don't want to specific sector fund, as I don't want to have to decide which sector is hot at present. Hopefully the fund manager should tilt the portfolio in the direction of a booming economy/sector.

    Are you invested in any international funds? or are you looking at any in the near future? I think from a diversification point of view, its a good idea to hold someone OS, cause our economy primarly relies on resources, and should the resource sector cool, so will our stock market.

    But I do think hedging is simply a additional cost which may work in favor during a time like recently when our dollar goes up, but will work against when the dollar goes down.. hedging would also suggest that our dollar will always be strong, but in the past, our dollar was very low ie 45c and in this case, why hedge your self to a weak currency.
     
  6. Jess

    Jess Member

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    Hi

    Why don't you use something like the InvestSMART 'top performing funds' or 'find a fund' facility to bring up a list of international funds, you will be able to see the historical returns from 7 years down to 1 month, plus the star ratings from Moning Star and Standard and Poors.

    Cheers

    Jess
    InvestSMART
     
  7. crc_error

    crc_error The Rule of 72

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    I do use investsmart, and have selected my other funds using this method. With international funds, all have not performed very well due to our raising dollar.

    The Platinum fund range seems to have been performing quite well before the crash, so I have selected the platinum brands fund.

    I have found that using those ratings dont mean much.. they seem to rate top performing funds with higher stars, but that doesn't mean they will continue their good performance the following year.
     
  8. Jess

    Jess Member

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    Yes unfortunately at the moment no one really seems to know where the market is going, everyone including the economists, seem to have different opinions.

    I hope that Platinum Brands fund provides you with good a return.

    Cheers

    Jess
     
  9. crc_error

    crc_error The Rule of 72

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    hence my reason to diversfy.. I have about 6 different funds I'm in, all in different sectors.
     
  10. Jess

    Jess Member

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    I attended a talk last week by HFA. They provided some great information on also including Alpha or Alternative investments in your portfolio if you haven't already.

    They won't generally do as well as growth assets or the index in a bull market, but should preserve your capital in a bear market.

    There are a lot of people now recommending about 10-20% of your portfolio in Alpha/Alternative assets.

    Cheers
     
  11. AsxBroker

    AsxBroker Well-Known Member

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    Hi Jess,

    Alpha is "a common measure of assessing an active manager's performance as it is the return in excess of a benchmark index." Alpha (investment) - Wikipedia, the free encyclopedia

    The markets alpha is 1, if a fund managers alpha is 0.90 it's relative return in a bull market would be less than the market return. In a bear market, a lower alpha would probably be more desirable.

    On the flipside, if a fund managers alpha is 1.1, it's relative return in a bull market would be more than the market return. In a bear market, a higher alpha would be less desirable.

    The majority of fund managers are stock pickers, hence, being active fund managers. The main passive fund manager I am aware of is Vanguard who use indexing for investing. This means that the majority of peoples portfolio's are 100% active fund managers.

    Depending on the risk of the investments of the alternative asset fund manager, ie, investing in gold would be less risky than investing in gold derivatives (from a commodity side of investing). Saying that, term deposits could also be used as a good alternative asset (I know it sounds so boring compared to investing in commodities, derviatives, absolute return strategies and private equity).

    As HFA blend alternate investment fund managers through over 50 fund managers (for the Diversified Investment Fund).

    IMHO, paying a MER/ICR of 3.34% for wholesale investments with a return of around 8% pa (for the last 5 years) is expensive (HFA Asset Management – Development, distribution and management of absolute return investment funds – Investments - HFA Diversified Investments Fund). For those returns I'd rather have a term deposit with no volatility of capital.

    The irony of investing purely in a Vanguard High Growth Index Fund is that it returned 9% (for the last 5 years) and paying almost one-tenth of the cost, ie, 0.37% MER/ICR.

    Cheers,

    Dan

    PS This is general information and not investment advice. Before making an investment decision speak to an FPA registered Financial Planner.
     
  12. crc_error

    crc_error The Rule of 72

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    I have some money in a global infrustrure fund and I have some money in a direct property trust with 1/4ly interest paid. These two funds will not run alongside the sharemarket.

    As you said, they will smooth out the ride.