Managed Funds Navra FUM to hit $200 million

With the close today, Navra should be at $200 million Funds Under Management when it updates on Monday. Today, at yesterday's close, it is at $198.36 million.

 

sounds like time to sell..

big funds are big titanics

 

why?

(insert 10 characters)

 

So if some people sell it will then perform better for the others that are left?

As for me, I'm doing my bit to push FUM up and will soon acquire some additional units

 

BIG fund? Hardly.

A quick look on Morningstar shows that excluding the huge cash management trusts Navrainvest is still a tiddler...but GROWING FAST!

For example:

Platinum International has approx $9.5 billion i.e. about 47.5 times bigger
Perpetual's Wholesale Industrial fund $5.3 billion
UBS Australian Share Fund $4.3 billion

etc Morningstar Toolbox Results

Like Glebe I'd say "why"? Or to quote that more (in)famous redhead "please explain"

 

Are you a taxi driver ????

 

$200M is still considered a small fund! However, you're right in that evidence shows that as a fund gets bigger it becomes harder to deliver the same returns. What I know of Navra's strategy however, I don't think they are anywhere near that point yet (I dont invest in navra).

 

To what has already been said, I would add that the size of the Navra fund would not affect it's performance as much as other funds due to its trading strategy.

Remember, it only trades in large companies that are very liquid, and it purchases when the price is going down (in other words there are more sellers than buyers). It also sells when prices are going up (more buyers than sellers). It should therefore be able to continue with its trading irrespective (within reason) of the amount of funds under management.

Cheers,

Steve

 

Yep.......this should work fine Steve. For this Fund the Supply and Demand should always be there. When most are Selling, Navra is Buying and hence no lack of Supply. When everyone else is Buying, Navra is Selling. Again, plenty of 'customers'. Finally, the scale of the Buy/Sells with such large companies would still be relatively small.

I've recently had two main concerns with the Fund and I'm happy to say it looks like both of these concerns have either been addressed or have not come to fruition.

Firstly, the Company not making a sustainable level of income was a concern.

This has now been addressed, and even though the removal of the preformance component was a shame in some ways, the fact that the company is now on a much stronger financial footing removes this concern for me.

Secondly, whether FUM would fall dramatically with such a large change of direction in Fee Structure was an issue to me.

Again, from the FUM of the last few weeks, it would appear this may not be as big a concern to many Unit Holders as may have been the case.

Personally, after a couple of other property issues are dealt with, I'm happy to start adding to FUM again.

 

Total Funds under Management: $ 200.09 million Welcome to NavraInvest Limited - Funds Management

YAY!!!!!

And with holdings in BHP and RIO ...hopefully a big kicker from today's efforts!

 

ps. I was speaking to Steve briefly this afternoon and he mentioned that it will be a record distribution for this quarter...already.

 

Hope my extra investment is picking up the growth then; chq was cashed in Monday

 

Is NavraInvest out performing the index at the moment for this qtr?

MJK

 

MJK,

Don't think so, but they're tracking closely as per the attached chart. Still, 6% odd for a month and a bit is a pretty good return don't you reckon!

OK, I'm now REALLY glad I bought back in and stretched my leverage at the same time. In fact, the growth in the last month and a bit is about $50K in my instance. Which goes a fair way to cover my full annual interest bill of about $65K. It obviously more than covers my monthly bill of about $5,500. For the month I've made about a $40K+ profit. Obviously, this takes the edge off the bitter pill of missing out on $20K odd growth in the back end of March when I changed the ownership structure of my units.

Nice work Navra. Or maybe I should say, nice work ASX200. Go BHP go!

Cheers,
Michael.

 

Michael

Well done on the profit so far.

A query on some of the numbers. I cannot recall your exact entry and exit prices, but assume you were back in at $1.16 in the new entity. Unit price now $1.20ish, and assume we are now at the end of the quarter and the distribution is 8c. (may be more, lets hope so) therefore:

1 million units at $1.16
distribution 8c. = $80K (units at $1.20)
units drop back to $1.12 after distribution so you are sitting on a paper loss of 4c. per unit ($40K after distribution).

$80,000 distribution
less
$12,000 tax at 15% = $68,000
less $40K drop in price = $28,000
less $16500 interest bill for quarter = $11,500.
less $20,000 in foregone profit due to earlier change over = -$8,500.

Admittedly the price may recover again, and probably will, but would you be better to sell at today's price and retain your paper profit to date, and buy back in after the distribution!!! Just one way of looking at it.

 

Hi Redrover,

Nope, those numbers are a bit off. Let me spell it out just for clarity of return, not in any way meant to be a "look at me" post, so apologies for showing this much detail for those offended by such.

OK...

I sold out at 1.1624
I bought back in at 1.1884 with $800K on 29/3

That represents lost growth potential of 2.6c x 680,000 units = $17,700 (or $20K ish)

Navra distributed 4.5c at the end of March taking the opening unit price for the quarter to 1.1390 on the 2/4. Note, this represents a 1.1840 position relative my buy price of 1.1884 if you add the 4.5c distribution back to the post-distribution unit price. So at the end of the last quarter I was pretty much where I bought in.

Return for the quarter:

Open 1.1390
Close 1.2095 (as at 8/5)
Return 6.18% (1.2095/1.1390-1)

For me that return for a month and a bit represents 6.18% * $800K = $50,074. But I work it out based on my buy in price and the very slight dip from 1.1884 to 1.1840 means my actual return since buying back in is $45K not $50K.

My interest cost for the period (since I bought back in on 29/3) is actually $7200. i.e. 40 days out of 360 is 11% of my total interest bill. That annual bill is $800K * 8% (average cost of capital) = $64,000pa.

So my net profit since buying back in is actually $45K - $7.2K = $38K before tax.

If I start the calculations from the 2/4 to represent the return for the quarter thus far then my profits exceed the $40K mark as I posted. (i.e. $50K - $6.5K = $43.5K)

I think the biggest issue with your numbers is you assume a distribution is a paper loss. It isn't. In fact, as I stated above, you should add back distributions to get a running cumulative return from your original buy in position. If I add back the distribution, then the fund is currerntly at 1.2545 relative my buy back in at 1.1884. That's the 6% odd return we're talking about.

Cheers,
Michael.

PS I don't expect Navra to return 6% a month forever. Just noting as Steve did to Nigel, this is going to be a bumper quarter by the looks of it. Navra trades, so its "profits" are locked in regardless of where the unit price ends up at the end of the quarter. So if Steve says its going to be a record distribution, then take this as gospel. Even if the market crashed tomorrow, those trading profits would still be distributed.

 

And this is one of the benefits of the way this managed fund operates. If the fund did not trade the shares, and simply held on to them for long-term growth, a major correction would wipe away most of the unrealised profits for the period.

Cheers,

Steve

 

Although the Fund seems to have been tracking the ASX fairly closely from Michael's Chart, it would be interesting to see a direct comparison of how some actual shares have performed, in and out of the Fund, from a ROI point of view.

I think it was mentioned previously that the Fund has a relatively large amount of cash at the moment. Therefore, for the Fund to be almost keeping up with the ASX, with such a large cash holding, would tend to indicate that the individual performances must be pretty good too wouldn't it? NB. I realise this may be a bit academic as bottom line performance is most important, but with the sharemarket at such highs at the moment, personally I don't mind the Fund having some cash up their sleeves as well.

 

An interesting Stat, the property trusts sector has out performed both the ASX 200 and 300 thus far in the quarter... (however colliers has underperformed the index by over 6%)

Only marginally by 0.05% but still there. However wouldnt we love to be in the telecommunications from the 27th April.. 7% in about 14 Days....

If anyone wants any other indicies compared just let me know, im tracking and charting them all at the moment...

Since the opening of the Quarter, the ASX 200 is trading at an annualised return of 70.9%..

 

Unless you reinvest your realised profits into further units like myself in which case you're just as exposed