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Navra Fund Performance - Happy Days

Discussion in 'Managed Funds & Index Funds' started by MichaelWhyte, 2nd Mar, 2006.

  1. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Guys,

    Thought I'd post a brief analysis of the recent strong performance of the NavTrade Retail fund for the benefit of unitholders as well as Navra shareholders.

    I've attached a chart of fund performance over the last 4.5 months. If you open this chart you'll see I've added a few trendlines and numbered these for analysis below.

    What is of most interest to me is the fact that the trend of under-performance to the ASX200 index (3), has been reversed over the last few weeks (4). This makes intuitive sense, as the ASX has had a minor drop then a subsequent recovery. It bottomed out recently on the 17-Feb-2006 at around 4800 (5). As it fell, the index continued to beat the fund, suggesting the unit price of the fund fell faster. I can't readily think of a reason for this but would assume it is to do with NavTrade's methodology whereby they started buying and holding on the way down, thereby increasing their weighting in the market and away from cash.

    However, as it bottomed (5) and turned back up, Navra started to beat the index. This makes sense, as it would now be selling out of those shares it bought on the way down and making trading profits on the way up. The net effect of this is that the ASX has trended downwards (1) from the 01-Feb-2006 to present but the NavTrade Unit Price has not trended downwards as much (2). I anticipate that as the ASX returns to its previous highs, and NavTrade sells out of its "final third" of trading, we can expect to see it finish well above its unit price of 01-Feb-2006 whilst the ASX will have finished level.

    If that happens, then we can expect to see that current under/over-performance trendline continue to point south. i.e. NavTrade will continue to outperform the index. Hopefully, once the ASX tops its previous high we can continue to see this trend of over-performance, and not have it return to its historic correlation of under-performance in a rising market.

    Regards,
    Michael.
     

    Attached Files:

  2. dkmc

    dkmc Well-Known Member

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    Michael you are comparing navra fund and its distributions to the XJO - as far as I know its not a cummulative index so you are missing out on distributions of close to 4-5% per yr.
    The asx 200 accumulative index or total return would be better to compare to
    but I cant find figures for that freely available online - there are some subscription services to access it
    Maybe compare to vanguard aussie index might be better - and download their figures / distributions
    When you add in distributsion its underperformed even more
    and according to tradingroom.com.au - its -9% compared with vanguard aus index over the last 1yr.
    cheers
     
  3. Glebe

    Glebe Well-Known Member

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    I don't think he's including distributions so I think Navra vs XJO is fine. Both XJO and Navra include non-distributed profits.

    Navra holdings with distributions reinvested = Accumulation index.

    Or so I would have thought?

    Michael, thanks for your efforts, it's appreciated.
     
  4. Glebe

    Glebe Well-Known Member

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    Actually I think Michael is including distributions, in which case I think it's an unfair comparison. Michael?
     
  5. Ol School Skata

    Ol School Skata Well-Known Member

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  6. dkmc

    dkmc Well-Known Member

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    you cant actually get to the data
    'are no longer available in this section of the Standard & Poor’s website.'
    You have to subscribe to an index watch service
    Cant find anything else on the net
    Thats why the performance of an index fund might be the best alternative
     
  7. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Guys,

    We've covered that point off before. Because of Steve's trading methodology he seldom holds stock long enough to qualify for dividend payments from them. As such, 90% of his "growth" is from capital gains through trading. As such, I don't benchmark against the accumulation index as this would be an unfair comparison as this index includes re-invested dividends.

    Steve's "dividend" is really just a selling down of units and profiting from the capital gains from trading. I add this back in my calculations so I can see the gross capital gains and not the un-distributed capital gains.

    So, I think the XJO as a baseline makes sense. Either way, in the recent past NavTrade has been under-performing but has shown some health in the last month or so as posted in this thread.

    Cheers,
    Michael.
     
  8. Sean

    Sean Member

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    Nice work Michael!

    I am always keen to see stats on the retail fund.

    It doesn't concern me too much if I see the fund losing ground when compared to other funds or the ASX. I believe it just means that the fund is buying value and the further the ASX slides the better the value. Then we can look forward to greater gain when the ASX bounces back. Correct me if i'm wrong.
     
  9. TakeStock

    TakeStock Well-Known Member

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    I don't think there is any fund that hasn't at some stage underperformed other funds or a market index. In the very short time period that the Navra fund has been operating it has given a good solid income return. It really is not necessary to get overexcited and check the performance on a daily basis.

    The basic premise of the fund is very sound - buy well managed companies with good earnings records at lower prices than you sell them. It must be remembered that when volatility is discussed it is important to keep in mind the timespan. It is not just daily or even weekly volatility that is important for some companies - it may be months. Check the graphs of many companies and this will become very evident.

    I don't expect the Navra fund to ever be the best or worst performing fund available, however, I do expect that it will generally give a solid performance in most markets with less risk than a lot of funds that try to predict the future or wish to tackle currency risks.
     
  10. Tropo

    Tropo Well-Known Member

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    Spot on !!!
    :cool:
     
  11. perky

    perky Well-Known Member

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    Michael, it must be getting close to "fee-charging" territory now?
    The wholesale fund went up .92% yesterday (when the asx200 went up around .45% or so)....how does it look?
     
  12. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Perky,

    Hehehe.... I was thinking about posting an update to this thread today given its recent performance. Its looking good. The worm has well and truly turned and we are now tracking better than the index. This might have something to do with the rally in finance and industrials and the softening in commodities. I note that the current stock held by the fund include the big banks that have done well recently with more legs left in them.

    Attached is the latest view of the world.

    You'll note that the yellow line is heading further South every day as the "under-performance" is headed back to zero. So, its now only 2.74% in performance adrift the index, where it had been out to 5.73% adrift. Remember, this is for my specific investment timeframe from the 14/10/05, so for others the result might be different. Either way, its been outperforming the index since the 09/02/06. So, that's over a month now of consistent over-performance.

    The peak-to-peak analysis should be interesting when the ASX200 tops its previous high close. I expect Navra to have significantly out-performed it during that dip phase. Lines 1 and 2 show the current relationship through the dip.

    Cheers,
    Michael.
     

    Attached Files:

  13. Alan

    Alan Well-Known Member

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    I hope you're right Perky. :)

    I'd love nothing more than to see the 'full program' delivered and personally I think a core part of that is to maintain a Performance Fee based Fund. The problem is the Company can't continue forever without receiving some fees. :eek:

    In one way I know it may be strange to be looking forward to some more fees, but in another way it would mean the bigger picture is coming to fruition and even as a tiny shareholder that would be very gratifying.

    Hope those trendlines cross very soon Michael. :D
     
  14. Glebe

    Glebe Well-Known Member

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    happy days. and what's more important is the recovery in unit price of navra. good schtuff!
     
  15. Alan

    Alan Well-Known Member

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  16. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Alan,

    I reckon you could be right! I spotted a front page article in the AFR today about Toll and Patricks talking again, or at least Toll upping their offer or some such. Won't take much to turn that stock price around and give the fund a nice little kick.

    Looking forward to seeing how it plays out today.

    Cheers,
    Michael.
     
  17. Tropo

    Tropo Well-Known Member

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    Do not worry about TOL.......
    It's tightly held stock and there are not many shares on issue.
    I suspect ;) that TOL was sold short (for some reason), but few ' men in black' are still buying back right now...
    :cool:
     
  18. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Yes, and driving the share price up 10% on opening! Its back to around its previous highs of $14.30, up from $13.00 overnight.

    That's gotta help Steve's fund!!

    And the ASX has opened strongly across the board. Up 36 points to 4924. Back in record high territory. Might reach it this week.

    Very very happy days! :D

    :cool:
    Michael.
     
  19. Tropo

    Tropo Well-Known Member

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    My new numbers = 4975/78/83 ...
    That's gotta help Steve's fund!!". = Spot On !!!!!!!! :D
    :cool:
     
  20. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yup, Alan Kohler interviewed the head of the ACCC on Inside Business on Sunday morning about the Toll / Patrick deal, and explained why they have effectively changed their minds and approved the takeover (basically, Toll did what was asked of it by the ACCC and now have been given the green light).