Managed Funds Navra Fund Performance - Happy Days

Michael can I view the latest Navra vs Index battle please.

 

Glebe,

As always, my pleasure. You know I update it daily...

Attached.

A quick bit of narrative to go with it:

My observations of late are that the NavTrade DCT methodology outperformed the index during its Febuary correction. This can be seen by the yellow underperformance line heading South indicating outperformance by the NavTrade fund relative the index. When the index powered on beyond its previous level that trend reversed and the index outperformed the fund.

Since early April there has been a slowing trend to the index and some added volatility which has helped the NavTrade fund to keep pace with the index but not to beat it. That yellow line has tracked pretty much sideways since then.

In the 7 months since 14/10/05 when I bought into the fund, the index has returned 21.37% and the NavTrade Retail fund has returned 14.14% representing an under-performance to the index of 7.23%. These figures as at 10/5/06.

Please note that I have not speculated in any way on likely future performance, but have restricted my comments to observations on actual performance in my investment timeframe.

Cheers,
Michael.

 

Thanks muchly Michael.

"Please note that I have not speculated in any way on likely future performance, but have restricted my comments to observations on actual performance in my investment timeframe."

Hehe, have people been putting heat on you?

 

Excellent chart Michael. It seems that the navra funds performance is getting worse and worse as compare to the index.

 

Looks like fees based on outperformance are not going to work.

The further the fund performance drops behind, the bigger the percentage required to regain par let alone outperform.

Navra Fund performance - happy days

Navra Shareholders - not so happy days

The future could be interesting.

 

I have a foot in both camps (I have a big amount invested in the fund and also have a reasonable amount of shares in the company). I quiz Steve constantly on how the fund is performing and more importantly how the company can survive without making any money from performance fees. As Sim indicated, the change to charge a performance fee on a quarterly basis will make a big difference and Steve believes this plus getting FUM closer to the 300 million mark will ensure the company can start paying it's way.

In terms of performance versus the index, the fund is designed to perform in an 'average' share market ie. a market that performs around 10% pa. In this sort of market the NI funds will outperform the market by a reasonable amount. If the sharemarket performs less that 10%, the outperformance will be magnified . However in a market like NI have had since the launched 3 years ago ie the strongest bull market ever seen, the fund has very little , if any chance, of outperforming the index. In this case, unitholders are getting a great income return but shareholders won't get anything. Steve's view is that the current market conditions cannot carry on indefinitely and once they return to a more normal trading pattern, the fund will still return a good income distribution but also start outperforming the index.

Now I know the above sounds a bit like a NI advertorial but I can only make decisions based on how the fund has performed over the last 3 years and given the sharemarket conditions, it has performed exactly as Steve predicted and it won't be until we have different market conditions that we can see if it performs up to expectations in those conditions. In the meantime, there are undoubtedly other funds that currently are performing much better than NI and everyone should make a decision as to whether they should move their money.

 

Hi gazza,
If the fund is only supposed to "perform" in an average share market why would people invest in it now?

 

And also, what about disclosure? If the fund was expected to underperform in bull markets, should this have been part of the disclosure information? Its a bit late, three years later, to say that it wasn't expected to outperform in a bull market?

But - I bought it with the expectation of doing 15% per annum - and it is doing that!

 

I am a bit concerned.I didn't see the advertisement three years ago that guaranteed a bull market greater than any in a Australia's history.
I would like the fund to outperform,too.
But l would also like some common sense.
This was always a fund for Steve's mum and dad investors who wanted good
returns and conservative management of their funds.
I think they can be well pleased with what NI has delivered.
Regards
Denis
If we want to be sophisticated investors,let's speak and discuss with sophistication.

 

I received a brochure in the mail the other day inviting me to join a particular Managed Fund. Off the top of my head I think they said that had achieved something around the low 30% mark over the last 12 months. Not bad.

Reading on, of this return, about 3-4% was actually distributed income, the rest was unrealised 'growth'.

Now I guess this is where we have to be careful about comparing apples with apples.......

If you don't need the income, you think the growth will go on for a while and you think you can sell out at the right time, this type of fund may well be a better option right now.

If you want the income, you think the market could 'correct' sooner rather than later and you'd prefer to lock in gains, then maybe a different type of Fund would suit your purposes.

Different types of Funds for different purposes.......

 

I think the answer is very clear as to why you would invest now : this is a fund designed primarily to pay a high income while investing in blue chip Oz companies and the track record it has built up over the last 3 years says it has achieved that. I , like Denis, and many others have been extremely happy to receive over 13%pa over the last few years. In my case that return more than pays for 3 very negatively geared properties with some over for lifestyle.

Could I have done better elsewhere, absolutely. Would I have known where or what, possibly. But chasing returns after the event is a very dangerous game , in my view.

Bottom line is everyone has to do their own due diligence and work out exactly what role the managed fund or direct shares they invest in , is going to play in their overall wealth creation structure and to be perfectly blunt about it, if you have concerns about NI not outperforming the index, then either withdraw your money and invest elsewhere where you believe it will achieve better results or don't invest in NI in the first place.

 

For what its worth, I for one am happy with the Navra fund's performance in this market. My (simple) understanding is that most of the gains have been in the resources sector and Steve committed to a spread of sectors to manage risk. If the fund can manage risks and make the cash dividend it does (thus missing out on some compounding interest be reinvestment), it's still a pretty good deal. What if the fund had invested more heavily into one sector and it went nowhere....

 

For my part, the Navra fund works real well for simple people like myself, and its done everything that Steve indicated it would. I can get my money when I need it and the returns so far are more than satisfactory, even without gearing.

And given it HAS "performed" in terms of returns, even in a bull market, as a holder of units in the managed fund I'm pretty happy. As a shareholder, I might well have done a bit more DD on how many shares I bought, as I could have instead left them in the managed fund and made some more income. But its a good speculator for now, given good people work in the company, and I am sure they will keep improving the formula.

Fingers crossed for some more interesting years ahead.

 

Carl,

I sometimes think I may have bought a few too many shares myself, but then I think about ten years from now when the shares have skyrocketed and will be thinking then 'geez, glad I bought as many shares as I did'.

Mark

 

Hi, Mark,
As I am a shareholder myself, would appreciate your expanding on the reasons for your belief that prices will 'skyrocket'?
I bought shares as a gift to my 3yr old grandson...hope you're right...
Thanks, Mark,
Jayar

 

Jayar,

Based on what I've seen of Steve's personal trading over a very long term period (10+ years), I have absolutely no doubt that the fund is going to perform extremely well over the long term and provide great gains not only for unit holders, but also shareholders.

Keep in mind of course that this is my opinion only and there are no guarantees.

Mark

 

Navra Shares