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Macquarie Reflexion

Discussion in 'Introductions' started by aln1001, 18th Jun, 2008.

  1. aln1001

    aln1001 Member

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    Hi I'm new to investEd and am thinking of investing 100K in Reflexion. Has anyone else invested in this or have some advise for me? I'm relatively new to the investment scene. Is it good?
     
  2. jabba_jones

    jabba_jones Well-Known Member

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    Hi,

    I've invested a similar amount into the reFleXion China trust on the Dec 2007 offering, which as at 30/April is about a -5.6% return, however after the direction of the markets in May/June I expect the performance to be a lot worse.

    One thing I recommend you understand carefully is the threshold management (should your trust participate in this) again as at 30/April approx only half of each of the funds where invested into the underlying, so while it aims to protect you from losses, only half the money is getting the benefit of any of the gains. (See section 5.41 in the PDS)

    One thing that does bother me is the time it takes for the monthly performance to come out, 18/June and still waiting for end of May numbers, then again its probably only going to confirm that I've lost more money.


    Might want to read this thread too:

    Capital-protected investments
     
  3. carlosreynolds

    carlosreynolds Active Member

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    Also,

    - 1/3 of the borrowing cost is not deductible (14.60% - 9.45% = 5.15%) - thanks to Kevin Rudd and the announcement on 13 May 2008.
    - currency exposure to Japan, US and Euro depending on the investment option.
    - distributions (if any) will be fully taxable (no franking credits attached).
    - fees (if none are rebated)
    -- admin fee of $1,100 pa or 5.5% pa of a $20,000 investment.
    -- loan establishment fee of 2% payable to Macquarie
    -- upfront adviser commission of 2.2% of the investment amount
    -- trailing commission of 0.55% pa on the invesment amount
    -- upfront adviser commission of 1.1% of the loan amount
    -- trailing commission of 0.22% pa on the loan amount
    -- MER of approximately 1.00% to 1.50% pa plus performance fee where applicable

    The performance fee can increase your fee from 1% up to 4.33% in a year where your investment increases 20%.
     
  4. aln1001

    aln1001 Member

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    mmm .. looks like I'll have to do more research on this one tonight again before I go ahead. Still haven't heard anything really positive on reflexion and I really wish I was more savvy with investments. Appreciate the feedback though - thanks
     
  5. Insight

    Insight Brisbane Buyers Agent

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    Those fees are just amazing, talk about a lucrative game to be in.
     
  6. carlosreynolds

    carlosreynolds Active Member

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    Yep, its ridiculous.

    Just goes to show that Macquarie aren't a benevolent institution - those record profits don't just appear out of thin air.

    But I can see how those sorts of investments (and loans) would appeal to some types of investors. How can you lose with a sexy investment, and a put option???
     
  7. Young Gun

    Young Gun Guest

    I'd suggest you check out the new offering from Man Investments - OM-IP Essentials. I have compared reflextions with this and I believe it to be far more superior in terms of investment returns and they way they provide their capital protection.

    100% investment loans will be available soon. It closes in August.

    Man Investments Australia: Man OM-IP Essential

    This is one I'll be recommending to my clients and myself :)
     
  8. aln1001

    aln1001 Member

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    Now, that's what I call real information I can understand. Thanks I'm pretty sure I have all the info I need now to make a decision. I'm also going to look at Man Investments. Anyone else into this?
     
  9. Young Gun

    Young Gun Guest

    What I like about OM-IP investments is that they have low correlation to shares. It profits during periods of high volatilty so when the market is jumping around like it is now this portfolio makes money.

    A good investment if you think markets will S**t themselves!

    [​IMG]

    you can also buy the AHL shares without the capital protection. one of the few investments that have delivered a >20% return for the last 12 months!
     
  10. carlosreynolds

    carlosreynolds Active Member

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    Here's some more information:

    Seeking protection a capital idea | The Australian

    Interesting to note that in the above graph, not all of your money is exposed to this return. In fact, only 62.5% of your invested money is invested into the above return.

    2/3rds of your total funds are allocated to the capital guarantee, with the remaining 1/3 invested.
     
  11. Insight

    Insight Brisbane Buyers Agent

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    Potentially a case of the manager taking no risk themselves. They take a small portion of the punters funds and lever it up for a shot at the moon and win either way.

    This scenario is all about risk location disguise, allocating all of the risk to another party is a wonderful advantage to take home in any transaction.

    Just a general comment about 'capital guarantees' and not mentioning any product, I don't trust the idea as you can't eliminate risk in the markets, you can slice and dice it and give it to others but it's still there somewhere.
     
  12. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Something people need to understand (as alluded to by Insight) is that these capital protected products are NOT RISK FREE.

    There is a very real risk that due to falling markets, you will end up with 100% of your capital in protected mode, meaning that you will at best receive your capital back at the end of the period, while still having to pay interest costs and fees along the way. In this situation, you also have a huge opportunity cost, being effectively locked into a product which has zero chance of making you money.

    This has already happened to some of the Macquarie products, and many other similar products are struggling right now with falling markets worldwide.

    These products are great when things go well - but only the fund managers make money when things go badly.
     
  13. aln1001

    aln1001 Member

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    Well that's done it for me on this one. Thanks for the feedback, I'm far more informed than I was 3 days ago. So does anyone have some suggestions for someone who is looking for something to invest in but is new to this scene?
     
  14. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    The answer really depends on what you are trying to achieve.

    In general, I'd suggest you start simple and learn from experience.

    Pick an ordinary managed fund or exchange traded fund and invest some money into it. Once you understand how it all works, you'll be much more prepared for future investments.
     
  15. carlosreynolds

    carlosreynolds Active Member

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    Mate, a good place to start to get some ideas:

    Travis Morien's Investment FAQ - Investment in one lesson
     
  16. crc_error

    crc_error The Rule of 72

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    I recommend staying well clear of these investments.

    I got ripped off when investing in other capital protected products via macquarie.

    1) it can take up to 6 months to process a withdrawel.
    2) during this 6 months then will take that month unit price, and then still charge you interest right up until the day they pay out.. so what happened with me was I put in a withdrawel in feb last year, ended up getting June unit price,but they kept on charging interest right up until September.. plus the funds had nill return, even though the market was going gang busters at that time.
    3)they made about 3 calculation errors, all against me. the latest one was 12 months after the initial withdrawel request, they sent me a bill for $1000 saying they made a interest calculation error in my withdrawel processing.
    4) not to forget all the fee's, entry fees, exit fees, loan break penality, management fees, and charged interest when withdraw; and not getting benefit of future gains, so expec to pay a extra 3 months interest after you get your unit price locked in.

    basically Maquarie is not a good company to get involved in.. everything they touch goes bad..

    Look at Macquarie airports? used to be a $4.20 stock, now its a $2 stock...

    they put a lots of smoke and mirrors with highly leveraged and fee products so no one can understand what is actually going on!

    My advise from personal experiance, STAY AWAY!
     
    Last edited by a moderator: 26th Jun, 2008
  17. crc_error

    crc_error The Rule of 72

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    If your new, I would choose a quality managed fund.. like a balanced fund from colonial. Select something from this menu which suits your risk profile:

    Colonial First State: Find a fund