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Macquarie Newton and Asia Funds

Discussion in 'Managed Funds & Index Funds' started by crc_error, 2nd May, 2007.

  1. crc_error

    crc_error The Rule of 72

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    Hello All,

    12 months ago I attended a Freeman Fox investor update, and our good friend Peter Spann was doing cart wheels on the stage and telling us to Mortguage the Kitties and get into this 'once in a lifetime' investment called Macquarie Newton. So I went in with the min of $50k.

    However this fund has performed really bad, only 5% return for the last 12 months. I also got into the Asia fund. Both have returned 5%, so effictivly losing as interest is 7.5%

    Has anyone else here got into these funds? and/or bailed?

    Any comments on the quality of FF recommendations?

    Cheers,

    crc_error
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

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    :D
    Maybe the answer is to do as Peter DOES and HAS DONE rather than as he says? :eek: ;)

    I.e. initially buy resi property and value add
    cash flow it by writing covered calls or other strategies
    then build up a great business
    finally sit back, automate it and drive "beautiful friends" around in your ferrari

    ...hmmm doesn't sound too bad does it? :D
     
  3. handyandy

    handyandy Well-Known Member

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    Unfortunately I have to hold up my very unhappy hand.:(:eek:

    I love (not) the way they distributed capital as income and then still retained some as a compulsory reinvestment.

    At least I moved my investment to investsmart so that I get a slightly higher return by getting some of the trailing com back.

    Cheers
     
  4. Insight

    Insight Brisbane Buyers Agent

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    Well with the wind of hindsight behind me I must say I'm not surprised by this.

    I had a close look at these products and seriously considered my investing choices at the time 1) resi property in Brisbane or 2) Some of the FF Donut products, and I believe I have made a decent choice with the property.

    The Donut just leave me scared, I don't trust them. That's likely an irrational fear I admit. As a derivatives trader I have no idea how they can do such deals and then sell them as low risk to the punter. It's possible they can, just that it's beyond my understanding. My view on the world of derivates deals is that they are truly WMD for the financial system just like Buffet says. I am a very risk adverse person these days... Comes from battling with futures on a daily basis... trust nobody.. Like I said it could be an irrational fear.

    One concern I have with these Donut 0% down cap guarantee products, is that the risk burden is wonderfully disguised. As the punter you wear it, and for the Donut (MacQuarie) these products are just brilliantly sweet.

    Capital guarantee... No sorry, don't buy it, don't like it. It's a claytons guarantee anyway, get you capital back after the end of X years and Y interest payments and in deflated dollars, what sort of a guarantee is that? Robust trading methodologies contain capital risk, sorry but that's just life, some of the best hedge funds will give you a bumpy ride and the risk of capital loss, because.. that's the way the markets work.

    I am aware of uber funds that aren't even available to the punting public such as Toby Crabel's and a few others where these rules don't appear to apply... But... And this is a very important point... You and I likely can't invest in these and most certainly aren't marketed to about investing in them... and there is a life lesson in there I think.

    There is nothing so fragile as a new idea... or a new fund.

    Also after reading one PDS I came away believing that the disclaimers were just too sweet. At Macquaries discretion they can lock away your funds to ensure your 'capital guarantee' which means your funds will no longer be exposed to gaining higher returns. Again the burden of risk is on the punter first and foremost, as a Macquarie shareholder or promoter then the view is much nicer.

    I welcome being corrected. The PDS's were hardly light reading matter and I no doubt have missed much.
     
  5. Insight

    Insight Brisbane Buyers Agent

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    I enjoy learning from Peter, thought I would mention this up front.

    Well said Nigel! Spot on I think :)
     
  6. Nigel Ward

    Nigel Ward Team InvestEd

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    I don't think you've missed much - I think you're spot on. The more "structured" a product is the more it will cost you.

    I reckon that if you feel the need for a capital gtee then you don't have enough faith in the underlying assets/investment methodology...and of course you're going to pay for it. Capital guarantees, like the rental guarantees some developers offer, are prozac for the masses so they can sleep at night but I think will be cold comfort if the @#$% hits the fan...

    Cheers
    N.
     
  7. gazza

    gazza Well-Known Member

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    I did put money in , both in the Macquarie Newton fund and the one Peter Spann was heavily promoting namely the Macquarie Equity Enhanced Income Fund. Given this fund is modelled on Peter's own favourite buy/write strategy, he said he would be investing a vast amount , as much as Macquarie would lend him but it would be a seven figure amount.

    I would love someone attending his current investor updates to ask him how he is feeling about his investment at the moment especially as he is now heavily promoting another Macquarie fund he has developed with them. This is also using the buy/write strategy but with the ability to invest in a few other Mac funds. Given those funds form part of the Newton collection of funds which are performing even worse than the equity enhanced fund, I can't see how it will be a good investment epecially given the interest rate is now over one percent higher if you borrow the funds from Mac.

    Not happy Jan or should that be Peter :)
     
  8. bundy1964

    bundy1964 Well-Known Member

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    As a Macquarie shareholder I am over the moon with them :D As an investor I like simple things that rise in price, can be leveraged and pay out dividends.
     
  9. Nigel Ward

    Nigel Ward Team InvestEd

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    Amen to that! :D
     
  10. Glebe

    Glebe Well-Known Member

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    Well I went to Peter's Investor Updates this time last year, read the Macquarie Newton PDS's on multiple occasions, and never truly understood how they worked. I couldn't get my head around all the fees! :eek: So I decided not to speculate.
     
  11. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Same here ... I couldn't explain exactly how the fees would work, nor could I predict how the fund would perform based on the markets (too many variables) ... so I didn't invest.

    Simply put - it didn't pass the "wife filter". (ie. if I can't explain it to my wife in such a way that she can accurately explain it back to me ... then I won't invest in it).
     
  12. gazza

    gazza Well-Known Member

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    I worked on the principle that despite the high fees and complexity, the fact that I was using OPM and there was capital protection, meant that all that was at risk was my interest payments. I thought that given the success of Macquarie as a company, their fund managers should be able to achieve net returns of 7.75% pa ie cover my interest payments. So far their results have been a bit underwhelming :(
     
    Last edited by a moderator: 3rd May, 2007
  13. Nigel Ward

    Nigel Ward Team InvestEd

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    If I go to the Wealth Magic session in August I will do my best to ask this question. Perhaps Leandro could give it a go as well? :eek:

    Cheers
    N.
     
    Last edited: 3rd May, 2007
  14. crc_error

    crc_error The Rule of 72

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    BRIC

    What about that BRIC investment he was flogging a few months back, didn't get into that one.. Once bitten twice shy!

    Did anyone look at those products?
     
  15. Glebe

    Glebe Well-Known Member

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    In Macquarie's defence (cough), one year out of a six or so year timeframe isn't a big deal...
     
  16. willy1111

    willy1111 Well-Known Member

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    I regularly attend the investor updates - but haven't invested in any of the funds he has recommended.

    He seems to recommend a new fund/product at every update. And he pretty much always says that he is putting money into the fund - as if it is good enough for him to put his money in then it should be good enough for his clients to put money in.

    He will sometimes say he is putting $500K in, or $1M, I think when he was promoting one fund he said he was putting in $2M and went on to say that if he was prepared to put $2M in it was a fund he felt very good about.

    I sit there thinking - the guy touts that he is worth $50-60M - so $2M is didly squat to him - and then if he is borrowing the money - it really is pocket change for him.

    He says that out of the 39 funds they have recommended there are only 3 not performing to expectations and makes commical comment about everyone whinging to him about the 3 that aren't performing instead of patting him on the back for the other 36 that are performing.

    Something just doesn't feel right about taking his recommendations when he keeps coming up with the next 'you beaut' fund at every update.

    Don't get me wrong - I love his presentations/strategy/style and that is why I continue to go.

    And I believe he no longer has a ferrari anymore - replaced it with a Bentley GT.

    Cheers

    Tim
     
  17. gazza

    gazza Well-Known Member

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    Tim

    I guess even if he does indeed invest as much in each fund he recommends as he says he does and that fund then underperforms , it is small change compared to the amount he makes in commission from all of his clients investing in these funds.

    Gazza
     
  18. willy1111

    willy1111 Well-Known Member

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    Quite true.

    And I believe this is why he has massively discounted his wealth magic course (which is talked about in another thread). Because he expects or hopes to make bucket loads in commissions from being a Financial Planner.

    Then on the other hand. . .

    if people are continually unhappy with the performance of his recommended funds - I am sure they will talk with their feet and take their business elsewhere.

    So there is quite a bit riding on it for him afterall.

    He continually says (in more recent updates) that he is all about optimising and automating his investing - he can't be bothered with implenting his own stragegies (eg: writing covered calls) when he can give his money to the 'best managers or experts' in Australia.

    Then on the other hand . . .

    he has just listed Fox Invest on the stock exchange - which is like an LIC managed by Freeman Fox.
     
  19. Triu

    Triu Well-Known Member

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    peter spann wealth creation club

    Hi has anyone joined the Ruby, sapphire or Platinum clubs for wealth creation with FreemanFox it is being run by Peter Spann.
     
  20. gazza

    gazza Well-Known Member

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    exactly and that it why he supposedly developed these enhanced equity funds with Macquarie using his buy/write strategy - to buy him time as he put it (and a heap in commision of course :) )