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Macquarie reFleXion Funds - from 4.95% interest, 100% finance, etc

Discussion in 'Managed Funds & Index Funds' started by -T-, 18th May, 2006.

  1. -T-

    -T- Well-Known Member

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    As per the subject, I found an ad in the AFR for this fund.

    Looks interesting, access to Japan, BRIC countries, etc. The interest rates are country-based (from 4.95%) and they provide 100% finance. Also a loan for the interest is available.

    www.macquarie.com.au/reflexion
     
  2. -T-

    -T- Well-Known Member

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    I forgot to mention capital protection too...

    Ok, I jumped the gun a bit. It is actually a suite of funds, each one concentrates on a country or group of countries. The Japan Fund has an interest rate of 4.95% (that's what I'm talking about :) ) and the others are all around 6 and 7%.

    I still have to read the PDS and do DD, but I like the idea of a low rate, 100% finance, cap protection, loan for first interest payment and access to Japan, BRIC, etc.

    Much more my cup of tea (at first glance) than the Freeman Fox sponsered fund! :cool:
     
    Last edited by a moderator: 18th May, 2006
  3. Glebe

    Glebe Well-Known Member

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    Careful of currency fluctuations. I haven't read the PDS yet but the cheap interest rates could turn out to be a nightmare if the crossrates +/- 10%.
     
  4. -T-

    -T- Well-Known Member

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    Good thinking 99. I'm reading the PDS now and it does mention the exposure to the foreign currency. If Japanese rates are expected to rise, then I assume that's a big deal? I'll keep reading and post what I find.
     
  5. Glebe

    Glebe Well-Known Member

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    By the way T, thanks for pointing these funds out. I think I'm going to throw $100k at Macquarie (100% borrowed), I might do $50k on the Newton Multi Strategy and $10k each on these 5 reflexions. I have no idea about which fund will perform better so I figure its better to spread the risk around. But I also need to read into the interest rate risk via currency fluctuations. The capital protection is provided in $AUD.
     
  6. -T-

    -T- Well-Known Member

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    It's all good. As for the rate and currency risks, take the Japan fund for example. They have all sorts of tables in the PDS showing what will happen to the interest rate if certain things occur (specifically Japanese rate and currency movements). But from my limited knowledge, I don't think Japanese rates are going anywhere but up, so this seems like the obvious catch to the 4.95%. Sure the currency could move in the opposite direction and negate the rate move, but I wouldn't bet on it.

    However, a move isn't such a huge issue. In retrospect there would have had to be some catch on that low rate. Risk and uncertainty are the name of the game, so just more DD needed on my part.

    One last thing on the back of my mind, all of these markets have been doing very well. Is it wise to think they could keep going? Then you think that maturity is 2013, so that's a long time to get through a full cycle, but I think Japan et al haven't always played by these rules. I realise there's always risk, but I'm justing thinking aloud again. :)

    I too think I'll be going for a mix of these.
     
  7. KevinH

    KevinH Well-Known Member

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    Interesting that if you call Mac and enquire about the Freeman Fox enhanced income product, they steer you towards their own Newton Multi Strategy product.
    Invest direct via Mac and no broker fees ...

    Iwent for both the Reflexion as well as the Netwon Multi series 2 fund.

    Thanks for the tip -T-

    Kevin
     
  8. -T-

    -T- Well-Known Member

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    Hi KevinH

    Good to know someone else is going for these too. Even on Freeman Fox's latest Octane Asia fund, you can save $2k on $100k by just going through someone that rebates some of the fee.

    P Spann said at the Cash Flow seimnar that the only reason he wants his clients to get on board is because he needs 100M worth of funds to make it viable with Macquarie. He said he thinks it's such a good fund that he's willing to share it with us for this reason (lucky us). I think he forgot to mention that on 100M he would probably receive 3M alone from referral fees!!! Not that it's so wrong for a business to make money, but I'm more concerned about my own situation, hence not paying so much in fees.

    Anyway, if anything he should praise your resourcefulness and ability to save money! :D

    I will be decided by tonight, but I think I'm going into Reflexion (Japan, Emerging & maybe China) and an income fund. I'm going to spend a few hours tonight working out the best balance between growth and me not having to pay too much in interest from my own pocket for funds that don't distribute. I'll probably write calls on a selection of stock to also contribute to the interest payments.


    :cool:
     
  9. KevinH

    KevinH Well-Known Member

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    I jumped in yesterday with a weighting of 30% Japan, 25% China, 25% Emerging Markets, and 20% Commodities, and then noticed that the Japan fund will not pay a dividend ! bugger...

    I guess the Multi strategy series 2 should make up for it.

    I am aiming to generate cashflow so I can give up the day job at the end of this year.

    Just in the process of refinancing three properties to use the equity towards more managed/income funds.

    fundbroker.com.au seem to have pretty good rebates if you go through tehm.

    Kevin
     
  10. jscott

    jscott Well-Known Member

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    Have you guys considered how you are going to invest in these funds... or any funds for that matter? One question that I'm trying to work out for myself is just how much to invest via superannuation and how much to invest outside of super.
    The tax efficiencies of inside super are fantastic (especially if the budget goes thru) but you gotta wait a long time before you can touch the money. And who knows - the government could gradually keep creeping up the age at which you can access super till your dead before you get it!
     
  11. -T-

    -T- Well-Known Member

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    I'm jealous!



    Thanks for the tip.
     
  12. -T-

    -T- Well-Known Member

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    Hey jscott

    I'll be applying for these funds through a trust. The discretionary distributions will really come in handy (full-time student girlfriend, travelling income-less sister).

    Access to super is a long way off for me, so I'm not too comfortable with locking the money away for that long. Also, I would probably rather looking at ways to reduce my assessable income opposed to locking it away in super.

    I wish I knew a bit more about super and the changes though, so I could advise my parents properly.
     
  13. KevinH

    KevinH Well-Known Member

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    I agree, and am just putting them in the trust as well.

    Despite the perceived benefits of investing in super and the added benefits of the 'zero' exit tax after June 2007, getting access to it is too far away to worry about.
    Rules could change before I can access it as well.

    One possible way to reduce your assessable income is to salary sacrifice into things such as super, if your employer will allow it.
    Of course, if you are self employed, then its even easier..

    But from 1st July with the new tax rates, do you really need to reduce your taxable ?

    Kevin
     
  14. KevinH

    KevinH Well-Known Member

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    I guess if you can set up your own fund, then whatever you are required to put towards super, you can at least choose which funds you would like to include.

    I would do both, some in the super fund and some outside.

    Will have to make that choice myself soon, as my work super has just elected to close down their fund and are giving each person the choice to go their own way or flip over to a generic super fund that they choose.
     
  15. jscott

    jscott Well-Known Member

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    Unless you've got $200k to $300k plus in super I don't think SMSF is the best way to go, but there are some cheap wrap products such as Macquarie's and Credit Suisse that have huge fund selection lists.
    I'm planning on investing both in super and outside of it and at this stage will probably invest a little bit more than the minimum via super and the rest via the HDT.
     
  16. hawd69

    hawd69 Member

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    Hi, I am looking to speak with anyone who invested in Macquarie reflexion.
    Please message me if you did as I have some really interesting news about this product.
    Thanks,
    Hawd69
     
  17. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Wasn't this one of the funds which got hit hard during the GFC?

    I know there were a few funds which had major issues and caused a lot of trouble for people.
     
  18. hawd69

    hawd69 Member

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    HI Simon,

    Yep - this one did get hit by the GFC, however I think that the GFC was the least of the problems that hit this product. This is why Im wanting to speak to Anyone and everyone who was in it...