Managed Funds Navra performance on recent market drop

Well the Dow dropped around 1% this morning.
Next level to drop below is the 12000 mark - if it goes through that then 11600 (a 10% correection) is on the cards.

I have checked through some other funds (like the CFS property ones) and after corrections they take quite a while to get back to similar levels again - but the Navra fund recovers fairly quickly (thanks to the large cash holding before each correction).
Once this correction is over, we will be charting eah fund to see which has the best chance to "catch up" - I get the feeling the Navra Wholesale may be one of the better ones.

 

Where is the logic?

Hi,

I suspect that many who invest in a managed fund for income, would also want that income to be relatively regular and stable (but not to the extent of course of say a term deposit), and also much higher than other cash investments. More so, if you are using this income to offset negative gearing losses.

This Navra fund appears to rely on certain market conditions, volatilities and trading strategies (less predictable, higher risk) to generate this income - using this approach to generate a 'stable' income stream makes no financial sense to me at all???

It would appear to me to be fundamentally flawed in its basis.

You could get 10% pa income guaranteed - no market dependence, volatility, unpredictability - with fixed term investments currently on the market!!!

If capital growth/inflation hedging is not a feature of the funds strategy, then I don't see the logic in putting your money into a fund like this.

Logic, however, may fall on deaf ears here, particularly if you are caught up in a Navra 'fan club' mentality and are trying to retrospectively justify/defend your investing decisions...

Please prove me wrong with your logic...

GSJ

 

But if there's no capital growth on your investment, aren't your 10%pa income returns eroded over the long-term due to inflation?

Will find some 10%pa income examples.

GSJ

 

I am guessing that, like other lessons I learnt in life, that wanting something doesn't = getting it.

If I want a certain outcome then I reckon managed funds aren't the vehicle of choice.

Not rocket science.

 

If an investment does not make sense to you, then I suggest that you do not invest in it.

I would be interested in risk free investments that provide over 10% guaranteed income. Please name a few. Additionally, I would mention that to be compared with the returns that the Navra fund has returned it would need to have provided over 15-16% for the last few years.

Well that may or may not be the case. In my own situation, I have no money currently in the Navra fund (or any other funds for that matter) due to other major financial commitments and no need for additional income. However, I did have a significant amount in it for a while and was extremely happy with the returns and I would have no hesitation using the fund again if I required a reasonably steady stream of income.

Only time will tell. So far, the facts (the returns from the fund) speak for themselves. It is up to each individual to analyse what they do with their investment funds.

This fund is only one of thousands, but it is the only one I know that is analysed in such detail. Move on...evaluate the multitude of other funds and advise us which funds do meet your criteria and why. I would be far more interested in what you are investing in rather than what you are not.

Cheers,

Steve P (as distinct from Steve N(avra))

 

" ..... of things you appear to know little about"

Well said !!

 

GSJ,

Can you recommend me somewhere to put my money that:

a) is stable/secure
b) pays over 10% income p.a.
c) pays quarterly
d) allows me to gear with ~70% leverage.

I've got money in property trusts but they fail criterias c) and to a certain degree, a).

Cheers!

 

I don't believe my UBS Property Securities Fund and Vanguard Index Property Securities Fund do (?)... might be mistaken (?).

 

Well isn't a good index fund for the Aussie market going to meet this criteria?

You can pay yourself whenever you want.

 

Depending on the strength of the bull, it can fail b). GSJ suggested fixed interest so I'd like to hear about them.

 

It will only ever fail b if you run out of units to take out to pay yourself 10%. Though ideally you would be adding in down years for best returns historically.

Are you asking for an investment that never returns less than 10% in any given 12 month period? Not sure if they exist. Berkshire is as close as you can go to an ideal investment I think, and they have had -ve years.

 

How secure are we talking here?

I thought the meaning was your money isn't going to vanish in a delisting for example.

 

Sim, wouldn't you like to have more control over the income and hence tax situation?

With an index fund you can control when and how much you are paid assuming you can lock in a day for withdrawals which I suspect should be possible. I can understand the idea of income distributions from vehicles where you have a very independent yield stream (as opposed to CG by itself) such as property but the idea with shares is something I have never got my brain around.

Look at the composition of the ASX 20-50-100-200 over time and the quarterly rebalances to see how reliable blue chips really are in the long term.

There is an inverse relationship between how well my trading is going and my post activity, so expect more random key tappings from me! Also I think you are obviously working a very good investment plan there Sim.