Managed Funds navra vs other managed funds

Aaaaa... Maybe about this:
"Hedge funds are for highly sophisticated investors and not for general public"
But above are NOT my words

Well...go to Hedge Funds Definition - What is a hedge fund? and read again.

"There is no proper definition for a hedge fund but these funds can be easily identified by some key characteristics like investment style, investment size, investment fees, leverage options etc.
Hedge funds are for highly sophisticated investors and not for general public.

In reality hedge funds are loosely regulated private pool of money which invests in all kinds of "legal investments" to maximize the returns. It can be equities, futures, currencies, commodities, bonds, real estate and even they invest in "Weather Derivatives" (betting on weather conditions) or even seed capital start-up companies like private equity / venture capital funds. Unlike mutual funds, hedge funds have no restrictions on "where" they could invest or "in what" they could invest in." ect..ect..

 

For Tropo:

sar·casm [sahr-kaz-uhm]
–noun
1. harsh or bitter derision or irony.
2. a sharply ironical taunt; sneering or cutting remark: a review full of sarcasms.

Mark Leo.

 

Sorry, before anyone takes offense where it was not directed I was being sarcastic when I asked whether Navra was a hedge fund now, not about anything Tropo said!

 

For Mark Leo.

Also......

Sarcasm refers to a humor that is at once cutting and bold in both in a mocking fashion. Sarcastic humor would never be described as gentle or endearing, but rather as caustic and bitter, describing situations, persons, or things in a derogatory way in order to be funny. Appropriately, the derivations for this brutal form of wit come from the Latin 'sarcasmus," which stems from the Greek "sarkasmos" and "sarkazein" which means literally "to bite the lips in rage."
Sarcasm is not, however, always blatantly expressed and can be (and commonly is) conveyed in an exaggerated intonation of one's voice when speaking, as to over-accentuate and draw attention to what is being mocked or made humorous. For example, if one person in a couple is served an enormous plate of food at a restaurant, his/her companion might remark to the other, "Well, that should feed the seven of us!" The person's remark is mocking the large portion of food by being both facetious and ironic, since the plate is obviously intended to feed one person, not seven (though it may in fact be big enough for more than one), and the couple would understand that the remark being made, for that same reason, expresses an untruth of what the situation is- two people have a meal, not seven.
The remark is obviously making fun of the large portion of food and thus would be considered a sarcastic comment. Besides facetiousness and irony, which play large roles in facilitating sarcasm, often sarcasm is described as "dry humor," having little feeling and emotion in its delivery.
For example, seeing a bad accident occur and remarking with no feeling in one's voice, "Oh, how lovely." would be considered a standard form of sarcasm. Sarcasm can thus be seen as making light of a negative situation for comedic effect. Conversely though, many forms of sarcasm can be so dependent on the tone and timbre of one's voice, so using sarcasm in writing can be much harder to pick up on the page than it is in dialogue.

This did not stop writers, like Mark Twain and Jane Austen (to name a few) from creating a reputation along with many master works hinged on the appreciation of sarcasm through the art of the satirical novel. Then and now many readers everywhere appreciate sarcasm in both its audible and non-audible forms. This was not always the case, however. Throughout much of history sarcasm was considered a "lower form" of wit because it was considered so unabashedly disrespectful to the person or object being described.
In the nineteenth century, famous Scottish historian and essayist Thomas Carlyle once remarked that "Sarcasm is the language of the devil, for which reason I have long since so good as denounced it."

Over the years and certainly today, sarcasm has become a commonly welcomed and appreciated form of humor, attributed to such popular American comedians as David Letterman of Late Night With Letterman and John Stewart of The Daily Show.

 

Anyone know what LVR I get on some weather derivatives with Suncorp Margin Lending? Also, is there any way to index these investments? I would like to capture all global weather conditions if possible.

Im surprised Peter Spann isnt touting a weather derivatives fund!

 

"Also, is there any way to index these investments? I would like to capture all global weather conditions if possible"

Weather Derivatives Market

also: Millionaire Phenomena

 

Sounds very Enron-ish to me...

 

Yeh...Some people like it hot.

 

thanks for the responses..
my iq has just dropped another 20 points

hedge funds
weather derivatives market
indexes
xjo

mental note to myself to watch "wall street" to attempt to understand basic financial terminology..

rod_wa raises an interesting point about the navra performing strongly against the xjo and still return 10% income, that must be good..

i did watch "fun with dick and jane" - the enron slight i understood

 

Thanks for this chart Sim,

I like how Navra is less volatile than the index, and much less volatile than CFS geared. From many posts I have read on various forums since the "crash" I would say that not too many people would be hanging on to their CFS geared fund ATM - probably most would have sold out in a panic and taken the loss.

Like you said, if you can hang on, then you will do well in a geared funds (fund manager aside), but for me who dosn't like extreme volatility and is in for the looooonnnnnng term then Navra is A-OK. Compared to my UBS property fund it's doing brilliantly...

 

Interesting, if only it were true! If it were true, that would be amazing!
Navra's performance on such charts assumes distributions are reinvested and ignores tax effect. That means no "still return a 10% income" for you!
Also, you cant just pick a 2 month stretch and say Navra is performing strongly against the xjo.
Over the longer term, Navra has underperformed the index 2 out of the last 4 years (and it's years of overperformance are small compared to its underperformance years).
Bring tax into it, and all of a sudden it is well behind the index.

 

Good comparison.
Try this one: How is it doing compared to your ING Direct Saver account? Dont forget to take into account zero risk and no margin calls

 

Sim' - could you please clarify the chart... is the Navra inclusive of reinvestments, or is it raw unit price?

1. If it's direct unit price, then I reckon my statement is still valid... that 10% income on top of index return is a good result, since 10% (with no tax benefit) is significantly better than 4.9% (grossed-up dividend of ASX200, ie incl franking credits).

2. If it's accumulated, and the XJO is not, then there's an issue with the chart, as the chart would then be apples vs oranges.

 

Thanks Sim
OK Coops, I agree with you.

Is Navra entitled to compare itself with the XJO? I suppose so, only if they make it very clear... with compounding, any fund will deviate dramatically from the non-accumulation index.

I think the Navra - and any MF for that matter - should use an accumulation index if they are promoting their own re-invested returns.

Original poster, take note.

And Sim', I've no issue with the chart, it was out of context (ie I did not go to comparefunds and read the fine print!).

 

Rod

I agree, there is definitely a lot to be desired in the claims fund managers make about their wares. Personally I would like to see all fund managers take a similar approach to Vanguard and show results after tax on a few different scales (they do superannuation and a couple of different personal income tax brackets).
It would make things a lot easier for the customer.
And despite my critical comments, I do think the Navra funds have a justifiable position within a portfolio, as long as the tool is used for the purpose it was designed for. I know full well that the fund has been instrumental in allowing a lot of people to fund residential property shortfalls and pay down non-deductible debt. For these purposes it is fantastic.
However what I am not a fan of is people trying to make the argument that it is a valid managed fund in and of itself for wealth creation.

In this area, its strengths become its weaknesses - the ONLY way to grow it is to reinvest your distributions (if you dont believe me check the unit price at inception 5 years ago and unit price today), and you are paying your marginal tax rate on your distributions. Think 3% management fees are bad? Try 30%+ of income tax at your marginal rate cutting away at your returns.
It is about as good for your long term wealth creation (used by itself as a traditional managed fund) as money in a high interest bank account, except you are taking on full market risk.

Any comparison of this fund to an index is a wishful/hopeful marketing gimmick (similar to the whole "dont worry about losing your capital, we have made trading profits!! forget the erosion of your capital, we have trading profits!!" and the "forget that we drastically underperformed the market in the great bull market, we lost 2% less than the market!!").
It would almost be better not to even call it a managed fund, just call it a cashflow/non-deductible debt reduction tool.

Again, used for the appropriate purposes it is a fantastic, possibly unequaled tool. Used for the wrong purposes and you could well find yourself many years behind where you could have been.

It is interesting that while a lot of the other funds point to their long term 5 year plus results, Navra is a lot more keen on their 1 quarter of losing less than everyone else

 

Okey dokey Coops, I agree whole heartedly.

Clear after tax performance is one of the main reasons I manage my own share portfolio. I control when I buy/sell/realise gains/losses; only I know what my/wife's tax situation is going to be in any year (and when it might be efficient to sell down).

I just did comparefunds on Navra vs XJO 'from 2005-2006' and the reinvested Navra tracks XJO quite tightly.

So please Navra fans, if you are using the distributions to fund IP cashflow shortfalls, then surely your unit price is suffering? Sure, it's grown, but about a grossed-up dividend yield (near 5%) short of the ASX200 performance each year? What will happen in a sideways market?

 

That is why you cant look at that particular fund in isolation if it is being used to fund other parts of a portfolio.
So losing a few percent on your navra portfolio allows you to hold a growing property worth 2 or 3 times your navra investment, which you otherwise couldnt do cashflow-wise (or maybe couldnt do comfortably), is it worth it?
Obviously depends on the individual circumstances, but I would think there are definitely times when the answer would be yes.
lose 5% on $200,000 on a $500,000 property growing at 8%, then yes it is worth it.

In a sideways market, who knows, it is not yet tested. If you get good volatility within a tight range, then the Navra trading method could actually do really well.

 

Hi Coops.

It's very refreshing to hear some balanced and relatively informed discussion about some of the Navra products. Hysteria often seems to rule in 'other places'.

One of the reasons why I think open and unbiased discussion of the products is important is simply because of the type of investor often attracted to the fund through the recommend structure.

From my experience, your average investor in this Fund would have initially taken a significantly higher stake than would often be the case with other Funds. ie. access equity, 50% margins etc. Read this as people with a relatively large amount of money invested in a much narrower range of Funds or indeed in only one Fund.

I also think there would be a significantly larger % of relatively 'novice' sharemarket investors who may be 'mum and dad' type investors perhaps with more of a property background in this Fund. Read this as people who are constantly learning about this new asset class and will constantly have questions.

For many, this Fund also isn't a 'faceless institution' but rather one that has often been introduced through Steve Navra or even through family and friends. Read this as many have a 'relationship' type attachment to the Fund.

The big advantage of this type of mix is that it does have the ability to grow FUM quite quickly compared to some other types of Funds and I think we have seen that when the Fund first started.

One of the challenges for the Fund though is to be able to meet the educational and information needs of these types of Unitholders to ensure FUM continue to grow.

Unitholders tend to be happy to invest more if they feel their investment product has been well examined and their questions answered. The Company has an obvious role to play here but then most investors would probably think there is some degree of bias, even if unintended.

For individuals, and indeed the Company to discuss and answer questions in an open environment such as this, I would think, should have many mutual benefits.

Well balanced, challenging but informed discussion is in everyone's interest.

Just my 2 cents........

 

Can I take tax and inflation into account?