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Navra Fund Performance - updated chart

Discussion in 'Managed Funds & Index Funds' started by MichaelWhyte, 7th Jun, 2006.

  1. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Updated Performance Chart

    Was requested to post an update on the performance chart so here it is. :D

    Since the pull-back, Navra has tracked the ASX200 quite nicely. Certainly closed the gap that had opened over the past 6 months. That last datum point for yesterday's close is an extrapolation for Navra but an actual for the ASX200.

    Cheers,
    Mike
     

    Attached Files:

  2. Denis

    Denis Well-Known Member

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    Thanks Michael,
    This has been a great tool.It gives me a better understanding of what is happening.
    Regards
    Denis
     
  3. MJK

    MJK Well-Known Member

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    Thanks Michael for this its been a great help to us all. :D

    If I may suggest...what what would be interesting would be to see the yellow line tracking under or over performance based on quarterly starts and finishes. Its most likely where our future focus will be in 06/07.

    Regards

    MJK:)
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I note that all 3 funds are showing a slight outperformance for the year as of the 6th. This volatility the market is experiencing seems to be exactly what the funds like.
     
  5. Jenny

    Jenny Well-Known Member

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    Hi Michael, any chance of an updated chart?

    Jenny
     
  6. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Jenny,

    I'm off sick today so can't do it as my spreadsheet is on my work computer, but as soon as I get back to the office I'll post the latest chart.

    Cheers,
    Michael.
     
  7. Jenny

    Jenny Well-Known Member

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    a speedy recovery to you:)
     
  8. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Guys,

    Still not 100% but managed to drag myself into the office today anyway. Here's my latest chart. It seems that Navra is tracking the index pretty closely since it found its current bottom. It would be nice if it outperformed it on the recovery but I reckon she might lag a bit.

    For my personal situation it looks like I might struggle to match the index over my full investment timeframe to date. Who knows though, its pretty close to parity now so it wouldn't take much for Navra to get ahead of that index.

    As an aside, here's where the whole performance fee falls down a bit in my personal opinion. Even though I'm still lagging the index, the fund is beating it for the quarter and would no doubt charge a fee in the future if they go to quarterly reporting periods. Not only am I lagging the index, but the fund is losing money for me this quarter to date. The fund opened the quarter at 1.1308 and is currently worth 1.1081 (20/6/06) as per the Navra website. So, I am down $12K over the period plus interest costs of $8K = $20K out the door. Not the best quarter by my accounting, but share holders in Navra would see it otherwise no doubt as the outperformance of the index would earn that performance fee on top of this loss in the future as I understand it. Of course I could be completely wrong on that count as I haven't kept up to speed with the proposed changes to performance fee accrual and payment.

    Anyway, I'm in it for the long haul and can but hope the fund beats my interest costs over the full year which it seems to be doing at the moment. I'm still positive $24K net of costs, down from positive $56K on the 10/6/06. Mind you, the banks are making more money than I am out of my investments at the moment as my interest over this period is $27K. ;) :D

    All good.

    :cool:

    Cheers,
    Michael.
     

    Attached Files:

  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    So how would you prefer the fund to work if you don't think this performance fee thing holds up ?
     
  10. pudsa

    pudsa Well-Known Member

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    Navra Fund Performance

    Hi Michael,
    Read your post of today with interest. Am a bit confused though (I'm no rocket scientist at this stuff). My understanding of the Navra fund is yes the price is down hence a capital loss which is niether here nor there until it is realised and as you stated you are in for the long haul and could therefore anticipate capital gains over time. As far as interest payments go they would be accommodated by the quarterly distributions which are generated by trading and the last couple of months should have been great given the volatility of the market. Am I missing something here, am more than happy to be educated.
    Cheers
    Pudsa
     
  11. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Sim,

    I'd like to see a floor in the performance below which no performance fee is charged. I'd suggest an appropriate floor would be the riskless cash free rate of return, or circa 6%. Anything less than this and no accrual.

    Remember that the performance fee is supposed to be the price you pay as an investor for the superior performance of the fund beyond that which you could achieve on your own. I'd suggest buying risk free bonds is a pretty fair minimum performance expectation for capital, or in other words, a fair hurdle rate below which no performance fee should be payable.

    I know of other funds that do this...

    Cheers,
    Michael.
     
  12. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Pudsa,

    You're absolutely correct. However, the only way the fund can make a decent distribution whilst the unit price has fallen is to erode its capital base. They'll still distribute but the unit price will drop even further by the amount of the distribution. At the end of the day, the drop in the unit price over the period is a real capital erosion whether they pay a positive distribution or not.

    In simple terms, I would have been much better off ($20K better off) to have had my money in my mattress this month than in the fund. I would have avoided the $12K of capital erosion and avoided the $8K of bank interest.

    Nonetheless, as I also stated, I take the good with the bad and am willing to accept a really bad quarter provided the fund outperforms the ASX200 index over the long term. I'm not too much fussed with it beating the risk free cost of capital (circa 6% for bonds) as I can readily achieve this myself. I'm in this fund because I believe it can beat the ASX200. I could always track the ASX200 by buying a LIC or some such with zero performance fee.

    I'm still upbeat on the fund as I've only been in it for under a year now and in a market that's all been one direction. I'll give it a few years and see how it performs across multiple market conditions before I make a final judgement. I was just observing that its been an expensive quarter.

    Cheers,
    Michael.
     
  13. talbashan

    talbashan Well-Known Member

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    hi michael,
    1. one thing i don't understand from your graph. If the fund is charging a perfomance fee (and it is), shouldn't the yellow underperfomance fee be below the zero (-ve underperfomance = outperfomance => perfomance fee).
    where am i going wrong?

    2. as far as your fee suggestion, are you saying that you would like to see a perfomance fee only if two conditions are met:
    a) outperfomance of index
    b) total perfomance > 6% (for example)

    tal
     
  14. Nigel Ward

    Nigel Ward Team InvestEd

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    Hi Michael

    Could u pls update for today's figures? :rolleyes: :D Gee anybody would think you didn't have real work to do...

    Cheers
    N.
     
  15. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Tal,

    The yellow line is not below zero because it started back in October 2005 when I invested in the fund. For the quarter it would be below zero now as the fund has outperformed the index. That was a bit of my point too. Over my investment timeframe the fund still lags the index, but if fees go to a quarter by quarter basis then I can be paying a performance fee even though I'm still lagging the index on an annual or longer basis.

    And, yep, my performance fee preference is as you've described it. Beats the ASX200 and beats the risk free bond rate. Both conditions should need to be met, not just the ASX200 in isolation. In fact, if I were brutal, I'd suggest the ASX200 Accumulation Index and the risk free bond rate as dual hurdles. But that's a whole other argument.

    Cheers,
    Michael.
     
  16. Barracuda

    Barracuda Active Member

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    I would think that the last week (including today) has to be the ideal conditions for the fund and I (personally) think that we should be able to see a definite outperformance of the index as a result - the compounding result of buying low and selling high intraday and during the week. I'm willing to accept that there may be a fair amount of the fund tied up in purchases on the way down; however how much more perfect conditions could there be?

    I'm excited at the prospects and happy for this style of volatility, or even better a rise and then this amount of volatility, to continue.

    Cheers,
     
  17. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Nigel,

    It pretty much is up to date for today's figures. The last two datum points in the chart are for today and yesterday. I extrapolated the Navra prices based on % growth from previous prices for both days. I just went in and added the actual Navra close price as of yesterday and it correlated pretty much spot on with my extrapolation. i.e. its tracking the index nicely at the moment. That very last datum point is based on an ASX200 level of 4998.4 which I just grabbed off the ASX website as of 5 minutes ago. At the current ASX200 level the NavTrade retail unit price extrapolates to 1.1373, but in reality it lags very slightly on the upswings and outperforms very slightly on the downs at the moment. So, if the index closes at its current level then expect a unit price of around 1.1360 for today.

    I won't re-post the chart as the graph looks exactly the same.

    OK maybe I am just a tad retentive, but hey, it works well for me in my day job (when I get time to spend doing it... ;) ).

    Cheers,
    Michael.
     
  18. Nigel Ward

    Nigel Ward Team InvestEd

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    Ah I see it is now. Understood and appreciated!

    Cheers
    N.
     
  19. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Unfortunately the facts don't substantiate that thinking. I was of the same opinion which is why I started tracking the fund.

    Here's the facts for the last week for you:

    Mon 13/06

    Unit Price 1.1015
    ASX200 4838.9

    Wed 21/06

    Unit Price 1.1192
    ASX200 4918.9

    Performance over the 8 days

    NavTrade Units (1.1192/1.1015) = 1.6% growth
    ASX200 (4918.9/4838.9) = 1.7% growth

    The volatility over this period seems too small for the fund to generate outperformance to the index. When we see a recovery of the ASX200 to its original highs of 5400, then I expect to see some outperformance. Also the fund typically lags the index when its growing so it stands to reason that it lagged marginally over this small positive growth period.

    Don't sweat the short term stuff though, its the longer term trading that Navra seems to profit from. I suspect the volatility we're experiencing now is representing some good buying opportunities so the fund can consolidate its level here and be ready to track the index nicely on the recovery. It was cashed up at the peak so outperformed on the pull-back. Its the recovery that will work wonders.

    Cheers,
    Michael.
     
  20. Tropo

    Tropo Well-Known Member

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    "however how much more perfect conditions could there be?"

    Well ... would be nice to see XJO at 5140+ as soon as possible (5 trading days to go in this quarter).