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Navra Vs ASX since inception

Discussion in 'Managed Funds & Index Funds' started by See Change, 18th Mar, 2008.

  1. See Change

    See Change Well-Known Member

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    No I'm not waving a red flag :)

    Given The Navra funds better than the rest performance in recent times , I was wondering if people have reevaluated their place in an investment strategy.

    Steve's initial aim was to out perform the market , but with the strength of the bull market , and his system not being ideally placed for this style of market , that aim wasn't fullfilled. My thought at this stage of the market was that you needed to go with trend following systems that are better placed to take advantage of that style of market.

    However Steve's system seems to have done better than the rest when the Crap hit the wall and while some fund managers have been struggling in their businesses, Steve's would seem to be relatively healthy.

    Unfortunately Steve deleted the comparisons with the ASX from his web site a while ago , but I was wondering if anyone ( in particular Michael or Sim) might have an uptodate chart which plots total performance since inception compared with the ASX.

    I'm wondering whether the preceeding under performance has caught up with the ASX , so from this perspective whether Navra funds should be considered as a safe and steady performance which copes with volotility better than other share systems.

    Cliff
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

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    Shouldn't that be a white flag? :D:p Just kidding.

    It's a good question. Not sure if Sim's comparefunds site has the data yet to permit that charting comparison...yet.

    I would like to understand also, to what extent has the amount of cash that was held contributed to the outperformance of the falling market and to what extent has the trading methodology done so. The reverse is also something I'd like to understand...i.e. in lagging the bull market how much has the at times large holding of cash dragged on performance?

    Number crunchers...start your crunching!
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    By my calculations from the beginning of the 2003-04 financial year (not quite fund inception - but very close) ... the funds is very slightly (1 or 2%) outperforming the ASX200 (non-accumulation) index.

    [chart=CC;NAV0001AU,XJO;from4;5;20080318]NAV0001AU,XJO[/chart]

    ... or to see it full screen - go to Compare Funds and click on the "View chart full screen" link (you must be a Compare Funds member to see full screen charts - membership is free).
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yes, it looks like the fund performance has caught up with the ASX (XJO)... just.

    This is based on my calculation of performance which includes reinvesting distributions and does not take tax into account. It also does not take dividends from shares held in the index into account ... so if you compared full growth plus income returns from an XJO index fund or an index tracking ETF like STW, then I suspect Navra would still be lagging slightly overall at this point.

    I am actually very interested in getting a full comparison of Navra versus the ETFs - I'm keen to get the historic distribution data so I can run some tests and see how the fund compares over time in a variety of market conditions.

    I also think it's not a good time to do comparisons ... I would want to see the market bottom out and start recovering before we see how well (or not) Navra copes with bear markets. I'd also be very keen to see it in an extended sideways market (which is where I think the fund will shine).
     
  5. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Have you seen Steve's little spreadsheets that his staff generate daily to monitor fund performance internally ?

    They actually calculate the drag/lift effect of cash holdings ... I'd be interested to see how this extrapolates out over time.

    Naturally this is one of the features of the fund ... large cash holdings help in a bear market (although the help gets progressively eroded as the fund becomes more fully invested).

    Conversely, in a rising market, cash holdings gradually become more and more of a drag on performance as the fund progressively sells out of rising stocks.

    I personally think it is the cash holdings which have the strongest influence over the relative performance of the fund - it's quite an important measure for the fund.
     
  6. TryHard

    TryHard Well-Known Member

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    That made my night. OK, I need to get out more ;)
     
  7. Glebe

    Glebe Well-Known Member

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    Would love to see a comparison to STW... noone really buys the ASX200 but not the distributions.. As Insight said, it's like taking the capital gains on an investment property but passing on the rent...
     
  8. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    You find me the data, I'll do the comparisons :D
     
  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Okay - managed to get some distribution data from State Street and I've used the daily NAV figures from their website in place of a closing share price (they seem to be pretty close either way).

    My calculations assume you reinvest the distributions on the distribution date using the dividend reinvestment price (as supplied by State Street) ... and does not take tax or any purchase expenses (such as brokerage on initial purchase) into account.

    I'm not sure how accurate this data really is - so please don't take this as gospel ... do your own research to verify the data!

    Anyway - comparison for this financial year to date - Navra is outperforming both the index and the STW ETF ... no real surprises there:

    [chart=CC;NAV0001AU,XJO,STW;thisy;5;20080319]NAV0001AU,XJO,STW[/chart]

    For the chart I showed earlier dating back to July 2003 (just after Navra fund inception), the ETF (based on the assumptions I have made) has fairly clearly outperformed the Navra fund.

    [chart=CC;NAV0001AU,XJO,STW;from4;5;20080319]NAV0001AU,XJO,STW[/chart]

    ... the question will be - if we see an extended bear market or sideways moving market ... how will they compare then ?
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'd also like to examine the reliability of income distribution from the ETF versus the fund in a down market - or more specifically, if the economy is really slow and company profits are down (hence, dividends are relatively low) ...

    ... ie. can the Navra fund produce more reliable income (for helping to fund negative gearing costs) than the ETF can (especially given the cost of selling smaller parcels of shares in an ETF if you need short term cashflow help).
     
  11. AsxBroker

    AsxBroker Well-Known Member

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    Hi Sim,

    How does Vanguard Aussie Index fund compare to the index and Navra?
    I checked Home - Vanguard Investments Australia Ltd and they say they've outperformed the index by 0.2% (probably by not holding the bottom 10%).

    Cheers,

    Dan

    PS Before making an investment decision speak to your FPA registered Financial Planner.
     
  12. See Change

    See Change Well-Known Member

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    Thanks for that Sim

    Cliff
     
  13. Glebe

    Glebe Well-Known Member

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    Thanks Sim, you're a trooper :)
     
  14. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Unfortunately it doesn't seem like Vanguard supply full historic data on their website - I can only get data back to about 2004.

    If you find a full source of historic data and distributions for Vanguard funds - let me know.
     
  15. Insight

    Insight Brisbane Buyers Agent

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    Nice work Sim.

    It's a massive difference when you compound you divs, a large chunk of the juice in multi decade studies for equity markets comes from the divs so to not include them is a bit silly imo.

    The dividend yield for the ST funds has soared recently, at the expense of unit price however. As a trader your yield doesn't soar because you lose unit price.. you have just lost money.

    There is no 'income' for a trader... There is just capital growth you convert to income. BIG difference between Navra and STW (income dependant on underlying biz's like Westfield for example providing divs) in that regard as I have stated previously. I think it's dreaming if someone was to somehow think there is outperformance baked into NAV like coins in a Christmas cake at any time, NAV tis what it tis and it doesn't lie.. so that's why I like charts, they don't speak spin fluently.

    My contention has been for the last few years that the Navra fund would continue to soundly underperform the accumulation index trackers.