Managed Funds Is now a good time to buy Navra?

I noticed recently that the Navra retail fund is now back in the market with about 45% and the unit price is steadily improving, currently at about 75 cents.

Do people think the current conditions of the stock market make this a good fund to re-enter into? is there enough upside and volatility to recommend it as a good fund?

I held units in the retail fund from inception but sold them for 89 cents in September 2008 to meet other committments. I am now looking at income producing funds and have narrowed down my choices to:

1) Navra retail fund
2) BlackRock Asset Allocation Alpha Fund (Class D)
3) Platinum International fund

Any feedback appreciated.

 

Hi Sim, yes i would also consider Platinum International to be a growth fund but it looks like they have been distributing a lot of income in the last 12mths.

Platinum International Fund - Managed Fund Profile

1mth 3mths 6mths 1yr
Growth Return 2.00 -10.86 -2.37 -1.64
Income Return 0.00 19.60 21.46 21.62

Here's some info on the BlackRock Asset Allocation Alpha Fund (Class D).

BlackRock Asset Allocation Alpha Fund (Class D) - Managed Fund Profile

Yes i guess that investing in both Platinum International and Navra would be a good combination to have exposure to Australia and International markets.
My main aim is to find a solid income fund that i can leverage into at a fairly conservative 30-40%.

 

I to am looking for solid income funds that I can use to complement Navra. However my requirements are that the fund pays distributions either quarterly or monthly - hence wouldn't consider the BlackRock or Platinum funds (which have six monthly or annual distributions).

Regards,

Jason

 

Hi Jason,

As an income producing fund have you checked out Zurich Equity Income Fund? 60% beta of the market, invests in ASX top 50, income about 10% pa paid on a monthly basis.

Cheers,

Dan

PS This is general information, before making an investment decision speak to an FPA registered Financial Planner.

 

Dan,

Thanks for that. I have seem the Zurich one and am extremely interested in it. Especially like that it pays monthly (will make cashflow a lot easier). Thinking of maybe using a 50/50 combination of Navra and the Zurich fund.

Are many of your clients using the Zurich fund?

Thanks,

Jason

 

Hi JRC,

It is a popular fund for clients who are defensive. Many clients hold it either direct or through platformed services.

Cheers,

Dan

PS Before making an investment decision speak to your FPA registered Financial Planner.

 

If you have the expectation that markets will increase and want to capitalise on it I wouldn't invest into the Navra fund. With less than 50% actually invested in the market and no indication as to when that will be increased to 100% this fund will underperform should the market continue to recover.

It has already underperformed simply by not being invested 100%. This fund had a competitive advantage by being 100% cash just before the bottom back in March but the managers haven't capitalised on this and they have underperformed their peers since and will continue to do so until it gets back to 100%.

 

yes but Navra fund is only 50% investment as a risk managment strategy.. it depends on how the investor feels.

if the markets dip or turn it will be seen as a materfull managment move..

p.

 

It's only a risk management startegy because most of their clients hold warrants and would be wiped out completely if the market had another correction of 10-15%.

if the market doesn't have another sizeable correction soon this will not be see as a masterfull management move.

The manager of this fund would be dying to get back into the market, but has to hold back because of the risk to warrant holders. I bet they'd spin it another way but in my opinion this is the way it is.

A cheaper way to emulate the fund would be to go out and put 50% into a pure Australian share fund and 50% into a bank account/term deposit. other wise your paying almost 2% in fees to hold 50% in cash.

You could even dollar cost average the money held into your fund back into Aussie shares over time, to reduce your risk.

If I was you I'd compare the performance of this fund to a generic Australian share fund from say Sept 08 to now and see if this fund has added value to its investors by going 100% cash then slowly building back their positions. I think you'll find alot of underperformance. Think about this if the market goes up 10% this fund has to squeeze 20% out of its share's to compete. It might have the best trading system in the world but consistantly beating the market by more than 100% is extremely difficult.