Managed Funds Navra US Fund distribution

The fund value only increased 2% for the quarter ... while the DJIA went up by over 15% from it's recent lows.

However, I suspect the fund is still suffering from buying expensive shares back at the DJIA's previous peaks in May ... there would have been a lot of money flowing into the fund at that point ... which I'm guessing they would have been buying shares with ?

Not sure - we'd have to ask NI for an explanation. The DJIA is currently less than 2% higher than it's highs in May. It may well be that we'll see performance pick up a lot as the DJIA continues to hit new highs, and the fund is able to start taking better profits from the expensive shares it bought earlier. I'm just speculating here.

I also wonder how much impact currency has had ... that's the big unknown variable that we don't have much experience with yet !

(I made my first investment into the US fund last week ... so I'll be watching it a lot more carefully from now on).

 

I can't speak for how the system works - Steve or Bill would be better people to ask for detail ... as I said, it was just speculation. But while I'm at it ...

I suspect that one of the variables for the trading system is the level of cash holdings ... and once those cash holdings rise above a certain threshold (as they would do in the early days of the fund when a lot of new money is flowing in, the fund would choose to invest some of that money rather than let it sit as cash - otherwise if the market only ever went up, you'd never make any investments !!!!!!

Of course, the market went up strongly for the first few weeks of the fund, which meant that any investments the fund made were expensive compared to what they were valued at over the next couple of months when the market turned down again.

Like I said, just speculation.

 

I have a number of criteria I use for making these decisions.

First is the "feel" of the fund ... it's basically an emotional measure of whether I feel the fund's strategy and direction is right. Yes, I admit emotion does come into it - and it is deliberate !!

In this case, I like the concept of the NavTrade system - I think it has a lot of potential. I think the US fund needs more time and more cash to really start to show its stuff - but I think good distributions will definitely be possible. All I really want is something over 10% reliably - although I won't say no to more

I also use a more analytical measure based on a number of factors based around the short term performance of the fund.

My measures are based on a simple "momentum" measure (I think that's what the traders would call it). I use moving averages of the unit price (actually it's a measure of the value of $10,000 invested at inception with all distributions reinvested - since unit price alone isn't an accurate measure of overall performance). I look at the 20 day, 50 day, 100 day and 200 day moving averages of this value.

I then set a range of criteria based on where the unit price (value) is in relation to these moving averages, and the relationship between these moving averages to determine whether "momentum" is currently with the fund, and that gives a "buy" signal. If I have buy signals for at least 5 days in a row, that indicates the fund is now a candidate for investment (or additional investment).

I then calculate a score for the performance, again based on the moving averages, but also on some other criteria. I use this to rank all of the funds I watch (about 11 at the moment), and the top ranked "buy" signal is the one I act on.

The Navra US fund is actually scoring really well at the moment based on its performance recently - it's going up strongly right now from its recent lows.

Note that this system is not used to find new funds - it is used to make decisions about the shortlist of funds I've already chosen to watch based on my non-analytical measures.

Once fully invested (I have target values for all of my fund investments), the US fund will make up less than 10% of my overall portfolio - so it's not a huge exposure. If it does really well, I may increase the weighting to that fund and make it a more significant part of the portfolio. The AUS fund (wholesale) is currently about 45% of my portfolio, but once fully invested, it will only be about 17% (again, unless it turns out to be the star performer, in which case the weightings will be adjusted).

Note that I've only set up this new system over the last couple of weeks, so it's yet to prove itself ... but it certainly makes my decisions easier. I'm currently making additional investments every week across my portfolio (LVR permitting), so having these measures really helps.

 

If you look at what happened with the fund over the first month of trading ... it basically went straight up (and Steve got really excited).

If the fund only ever buys when stocks go down in value, it wouldn't have invested much at all over the first 4 weeks of trading, despite the money coming in. I know the fund trades individual stocks, not the market, but at what point do you adjust your biases and buy in to a market when everything only goes up ?

It might actually help everyone's understanding of the fund and how it should perform if someone from NavraInvest were to explain blow-by-blow the first couple of weeks of how the fund traded, and what cash levels they had.

It would certainly help people be more comfortable with any new fund that NI launches in the future.

 

Pretty much ... the fundamental filters include market segments (generally geographically based rather than sector based), and past performance (not as a raw measure, more as as a relative measure ... if a fund managar consistently outperforms other funds in the same sector, then they obviously have a better technique for managing their investments). I also give bias towards funds which my two margin lenders gear the highest on. I figure that if the margin lender is willing to lend at such high LVRs, they must have done their research and be comfortable with the soundness of the strategy. Either that, or they are "buying" investors

So yes, I have a short list of 11 funds and I determine which fund gets the money this week based on my technical analysis.

I'm currently in acquisition mode - and once I am fully invested my approach will change to a value-maintenance strategy (ie. buy when unit price falls below a threshold, sell when it rises above a threshold, rinse and repeat).

 

Yeah, the clock on the server is about 10 mins fast ... I've asked the host to check on it.

 

NavraInvest, Platinum and Colonial First State (Wholesale) are the fund managers I'm looking at right now - I'll post more details about the specific funds some other time.

I really like the Platinum International Brands and Platinum European funds right now.

 

Hi Smartypants ... your assumption is not quite correct.

At the moment I am regularly buying INTO different funds. I'm building my asset base - and NOT selling ... although I have sold some funds that were no longer required, such as NavraInvest Australian Retail (I moved to the Wholesale fund). My "trading signals" are only "BUY / HOLD" signals for the most part.

However, once I get to my target value for all the funds, I will sell to maintain the value if the fund goes significantly higher than my target - and then recycle that money into either paying down debt, or buying into other funds which are cheap at the time. I'd only ever sell when the price is high - taking profits.

 

Hi islandgirl.

In their current form, my spreadsheets would be practically useless to everyone ... it would take a 5 day course to explain how they work

I'm working on a simplified system which I might be able to share - that's my goal ... although I do need to be careful in how I present it ... I certainly don't want to seen to be offering advice

Once I've got the system a bit more fine tuned, I will look at writing a couple of articles explaining my process ... but that does require me to have a concrete process in place ... it's still a bit fluid and evolving.