Managed Funds Macquarie Managed Investment Fund

Discussion in 'Shares & Funds' started by Ace1, 4th Nov, 2008.

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  1. Ace1

    Ace1 Member

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    I've been putting off kicking off my investments for a couple of months now (just kept delaying and delaying as the markets got more unstable). I'm a 21 year old with $20K to invest and hold for the long term (7+ years), I'm unsure of:

    -whether this fund is any good/ reputable
    -whether now is the right time to invest

    Like I said I'm willing to look past short term up and downs and my ultimate goal is to grow my fund and not touch the capital at all. The unit price has fallen from the $1.50 mark I was initially considering to the $1.00 a couple of weeks ago to the $0.90 so I can certainly build up a healthy holding with $10K initial and $1000 every month.
    I'm doing this through Commsec and was looking for a diversified fund, aggressive in nature and this one had a low MER and a five star Morningstar Rating (but only $198 million in total investments- not a lot?)

    Any help much appreciated.
     
    Ace1, 4th Nov, 2008
    #1
  2. Simon Hampel

    Simon Hampel Founder Staff Member

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    Which fund are you looking at - Macqurie have quite a few ? Does it have an APIR code ?
     
    Simon Hampel, 4th Nov, 2008
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  3. Ace1

    Ace1 Member

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    Sorry- it's the Macquarie Managed Growth Fund. Not sure of the APIR code though.

    Cheers
     
    Ace1, 4th Nov, 2008
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  4. Ace1

    Ace1 Member

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    The other fund I was thinking of was CFS FC Inv - FirstChoice High Growth (APIR code: FSF0263AU). It's not as well diversifed as Macquarie's one, but has more potential for growth with 50% int. shares, 40% Aust. and 10% cash. Cheap unit price of $0.59 and similar MER to Macquarie but only two star Morningstar Rating. How do I decide?!
     
    Ace1, 4th Nov, 2008
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  5. Simon Hampel

    Simon Hampel Founder Staff Member

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    Simon Hampel, 4th Nov, 2008
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  6. Ace1

    Ace1 Member

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    Well sorry to harp on here then, how do you do proper research? All the reading I've done is that past performance is no indication of future performance. The reasons I'm thinking of Macquarie though was reputable manager, low MER, good unit price and personally I like their levels of diversification.
     
    Ace1, 4th Nov, 2008
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  7. Simon Hampel

    Simon Hampel Founder Staff Member

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    Unit price has nothing to do with it - ignore the unit price, it is merely a "relative" measure and is affected by distributions as well as by growth ... so you can't compare unit prices between funds, only within the one fund over a period of time (and you must also take distributions into account).

    You want a good manager and you want a consistent fund that is going to meet your goals.

    Yes, past performance is no indication of future performance, but a poorly performing fund is not automatically going to be a great performing fund in the future. It can be useful to benchmark a fund against a known quantity, such as an index. Make sure you are comparing like with like though ... comparing a global fund against the ASX200 index (as in the link in my previous post) is not terribly relevant - you should ideally have some form of global index to compare it agains (but unfortunately I don't have data for things like that at the moment).

    I look for how a fund has responded to key influences in the past, and I look at volatility - an overly volatile fund can be too risky, a fund with extremely low volatility can be too risk-free (ie not enough potential).

    I'm not suggesting the funds you have mentioned would not be good investments - I've never really researched them.

    In general I prefer to invest in a range of funds for my diversification than in one single diversified fund ... it makes is much easier to compare each fund to a relevant benchmark. Of course, this means more effort and more paperwork ... so if you are after convenience, then a diversified fund might be a good way to go.
     
    Simon Hampel, 4th Nov, 2008
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  8. Ace1

    Ace1 Member

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    Excellent! I've pretty much made my decision, just a general question now. I notice that figures on a fund are presented in 'income' and 'growth. Now income would be the distributions correct? And I'd be choosing to reinvest any I get back into the fund (based on my long term strategy). So any increase in growth would increase the unit price, and I would only have a paper profit until I realise and sell my units, like shares? Hope you can clear it up for me.

    Cheers
     
    Ace1, 5th Nov, 2008
    #8
  9. AsxBroker

    AsxBroker Well-Known Member

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    Hi Ace,

    Re-investment in a fund is like Dividend Re-investment Plans (DRP) for shares. Any income you have will add to that year's taxable income and pay any tax due, the company/fund buys additional units automatically rather than paying you a cheque or direct crediting to your bank account.

    For a long term growth strategy, growth in the fund is more desirable as you only crystalise the gains when you sell units (and if you hold the asset for longer than 12 months you only have to add 50% of the gain to your tax).

    Cheers,

    Dan

    PS This is general information before making a tax decision speak to your accountant or tax adviser.
     
    AsxBroker, 6th Nov, 2008
    #9