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Navra Fund performance

Discussion in 'Managed Funds & Index Funds' started by Mark Leo, 29th Jan, 2007.

  1. Mark Leo

    Mark Leo Well-Known Member

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    Hi Michael,
    My understanding is that this underperformance is, at least in part, due to the fund being 'weighed down' by a relatively high level of cash (33.4% in Dec) which only earns interest.

    I guess the ideal situation would be to hold 100% cash the day the market 'crashes' so that you can mop up some undervalued equities and profit in the next cycle.

    Your thoughts?

    Mark Leo

    PS Do you have an updated underperformance spreadsheet for us?:)
     
  2. redrover

    redrover Well-Known Member

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    Perhaps Navra could set out the scenario of a "perfect" market in which it hopes to outperform, because it seems to be that it has just about exhausted all market types to achieve this result and with the system backtested on 15 years plus of Steve's personal trading in various market conditions it is wearing a bit thin to continually come up "with the conditions are not right in this type of market". When is the market going to be right??? Being 100% cashed up waiting for a correction wont do much for the income side of things, bearly meeting your margin or LOC repayments until you start to recover again and if that was to be repeated then direct share investment may be a better alternative.

    The bottom line is "Is this as good at it gets" - if the answer is yes, then exit stage right! As Michael has stated lost opportunity costs to continue to hold and hope.
     
  3. Glebe

    Glebe Well-Known Member

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    Redrover,

    What capital gain % pa and what income % pa do you determine to be at least satisfactory?
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Redrover - why don't you sell your Navra units and invest them all in the CFS Geared Share Fund ? It invests in similar shares, and has greatly outperformed the market in recent years. That might suit your needs better perhaps ?

    This is not a suggestion - more of a question ... why don't you ?

    (For the record, I currently have invested approximately the same sizeable amount in the wholesale versions of both of these funds).
     
  5. redrover

    redrover Well-Known Member

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    Sim

    I dont necessarily believe in jumping in and out of funds because of the time delay in selling units and you cannot be guaranteed of your exit price. I have investments over other funds and direct shares, however I think a lot of people are disappointed with the underperformance of the Navra funds especially in view of the marketing of this sort of fund as being designed to outperform on a conservative basis. Four years later ???

    Glebe - percentage is a moving target with a market. Would you stay with a 10% return if all around you were getting a 14% as a market norm?

    You can get 11% on secured debentures now so your capital in theory is protected. If someone wanted a conservative return of 10% with the possibility of their unit prices moving up or down and potentially needing to cash up at a time when their unit price was at a low thereby incurring a capital loss, why on earth would anyone invest in funds like Navra unless it was with the potential to outperform. This was their marketing and I would like to see something forthcoming from Navra as to when they expect to live up to their marketing.
     
  6. MrDarcy

    MrDarcy Well-Known Member

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    Navra is performing as I expected and I invested in this fund for the steady income that the marketing suggested, not for any wow CG, that's what CFS GSF etc is for which I also invest in. I believe Navra Australia has performed on par, and I will continue to invest while it does.

    If this is not the required investment, then don't invest in it.

    However, I may take my Navra US money back soon :mad:
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Not suggesting "jumping in and out" - more of a re-assessment as to why you are holding that fund and deciding whether it still meets your needs.

    I did that recently and really put a couple of my investments under the microscope and realised that for some of the funds, I had invested for the wrong reasons - and for others, I wasn't likely to get the results I was aiming for over the short term and decided to focus my investing a bit more - I was a little too diversified. I'll revisit some of those funds in a couple of years and perhaps look to diversify some more then - if the capital is available.

    That's the biggest problem with marketing (and indeed, listening to it) - there is an expectation set, and if those expectations are not met, then customer satisfaction drops.

    I'm personally satisfied with the performance so far - it hasn't been stellar, but it's certainly been good enough for my purposes. I'm pretty pragmatic about it all.

    But satisfaction is a very subjective measure - and it is quite reasonable for other people to be unsatisfied - especially if their expectation was for something they haven't received.
     
  8. Tropo

    Tropo Well-Known Member

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    Redrover,

    I may be wrong, but Navra Fund is designed to trade volatile market and not market which shoots steeply up for the last 3+ years.
    As far as I know NF is set to deliver reasonable quarterly distributions to cover negatively geared IP’s (say..10%+) so if you are looking for high return, consider other Funds or trade Stock Market on your own.
    It's quite obvious that some people are not happy with NI performance, but real test of NF will come when music stops, and we get very volatile market.
    :cool:
     
  9. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Hi Mark,

    Yep, updated chart attached. Sorry for the slow reply as I'm still out of work so not checking in on the forums as much as I used to. Should be back in the swing of things shortly.

    As suspected, Navra continues to underperform the ASX200 as the market recovers to new highs. It can't keep up in a rising market and in my case did not catch up when the market dipped. So I am still showing an ongoing under-performance for my full investment timeframe from Oct 2004.

    Still, I'm better off being in than having the money un-borrowed just sitting in equity on the house. Its still beating my 8%~ish cost of capital. The only issue is the one of relative under-performance and potentially better performing alternative investment vehicles.

    Cheers,
    Michael.
     

    Attached Files:

  10. Mark Leo

    Mark Leo Well-Known Member

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    Thanks for the chart Michael.

    Perhaps the market didn't 'dip' enough in recent months for the fund to take any significant advantage. Like Tropo was saying, the market has pretty much gone up for the past 3+ years (if you stand far enough back from the chart:) ).

    Regards,
    Mark Leo.
     
  11. Nigel Ward

    Nigel Ward Team InvestEd

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    I think the point here is what matters is "volatility", i.e. oscillations in price. All the reports I've seen in the media about the measures of this say that it's been historically low over the last few years on the Aussie market.

    I'm not sure if there's a volatility index measure for ASX? Can somebody look that up? :rolleyes:

    N.
     
  12. Tropo

    Tropo Well-Known Member

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  13. MJK

    MJK Well-Known Member

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    The thing I like about Navra retail is during the May 06 correction it only fell away about 2% in value where as all the other high flyers we copping 5-7% pull backs.

    risk = return = risk?

    MJK:D
     
  14. Denis

    Denis Well-Known Member

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    I think people are being unreasonable and irrational to keep on "bagging" the performance of Navra Invest.
    I, too, would like NI to outperform, however,if Steve said to me three years ago that l will get an annual return of 16% and pay no management fee,
    l would have been very happy and l suspect most other investors would be.
    All Steve's representations were based on the market trading in a more normal pattern where it doubled over a ten to twelve year period.
    What has occurred in the past three years has never occurred in Australia's history.Continued references to corrections and rises some two months later
    and then criticising NI for not outperforming is not intelligent and not showing appreciation of how various managed funds work in different trading conditions.
    The property market has come off by various percentages in the last three years.No doubt this will occur in the share market at some stage .At this time we will be better able to judge NI against the rest.
    Regards

    Denis
    :)
     
  15. Alan

    Alan Well-Known Member

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    I tend to agree with Denis here.

    From a Distribution point of view, the Australian Fund has certainly met my expectations. I must admit I did expect more 'outperformance' over such an extended period however I can see the challenges in this market.

    The US Fund has not met my expectations to date though and based on the falling FUM I guess I'm not the only one.
    In hindsight( I know it's a wonderful thing :rolleyes: ), the way the Fund was originally set up seems incongruous to say the least. :confused:
    A core element of the 'Navra Structure' is to get reasonably regular income from the Managed Fund component and I'm sure many clients looked at the US Fund as a logical International/Diversification extension of the core principle. Obviously the currency fluctations made this a totally different product. Hopefully this issue has now been resolved, however it still surprises me that it was ever setup that way in the beginning.

    As usual, it would be great to get Steve back here to discuss a whole range of issues as his personal input has certainly been missed. Maybe Part 5 of the 5 part article series will be out soon? Look forward to it.......


    :)
     
  16. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    FYI - I was talking to Steve the other day and he offered to do an evening in Sydney dedicated to answering questions about the operation and performance of the funds. All InvestEd members will be invited - and we will set up a mechanism for those people not in Sydney to ask questions before the event and we will make sure the answers are documented (and if all goes to plan, recorded) for the benefit of all members.

    We will let you know once we have had a chance to plan the evening more.

    (Steve is now MD and Chairman of NavraInvest and so is very busy with the daily operations of the business as well as his other commitments to NFS and such)
     
  17. Alan

    Alan Well-Known Member

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    Sounds good.

    Thanks Sim.


    :)
     
  18. pudsa

    pudsa Well-Known Member

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    Thanks Sim,
    Thats an event we would like to attend to learn a little more about how things really do function.
    Cheers :)
     
  19. gad

    gad Well-Known Member

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    Just on this "out performance" subject.

    In different market conditions, the Navra fund may well out perform the ASX 200 but that does not mean you will get a better return than you are getting now!

    The market has been going up & up. I would rather it went on this way, with these returns, forever, rather than the market conditions change (read heading South) with Navra out performing but returning less.
     
  20. Alan

    Alan Well-Known Member

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    Yep........agreed Gad.

    My comments about 'outperformance' are probably related a bit more to the 'big picture'. 'Outperformance' allows the Company to deliver on the Fee Structure that was originally marketed. It would be a shame if this wasn't possible but if the Company income isn't there......it isn't there. I'd be surprised if Steve wasn't more disappointed about this than anyone.