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Discussion in 'Managed Funds & Index Funds' started by unthreaded, 24th Mar, 2007.

  1. unthreaded

    unthreaded Active Member

    Joined:
    21st Feb, 2007
    Posts:
    36
    Location:
    Bunbury, WA
    [Note - this thread was split from the Income Fund thread - to make sure it didn't go further off topic - Sim']

    Disclaimer at the top - I'm a Dad investor too!

    My position in this is I'd never heard of NI until I got into this site. I have managed fund investments in:
    Australian Unity Property Securities growth.
    CFS MIF Geared share fund.
    Ganes Focused Value Fund.
    Macquarie Small Companies Growth Trust.
    Multiplex Development and Opportunities Fund.
    OM-IP 15 seven Ltd.

    Direct Share investments only in TLSCA
    IP in regional WA

    Each investment was entered for a particular reason at the time of the investment. CFS and Macquarie I use as monthly invests of set amounts from spare income. Ganes fund is auto reinvested. Aust Prop and Multiplex are distribution to CMT (as is TLSCA distribution). All spare CMT funds are in Bankwest Telenet Saver @ 6.8%. Currently accumalating funds to invest in Prime Value Imputation Fund.

    OK - I'm happy to let anybody know why I am in xyz, similarly i'd love to know anyones reasons why abc is better. If there is a compelling investment Then I will consider leverage/ tax effectiveness. No I am not geared into anything currently. Purely philosophical - current return to me doesn't justify additional risk. I know this sounds backwards to what you all say, but, I'm happy taking reasonable returns at relatively low risk.
     
    Last edited by a moderator: 24th Mar, 2007
  2. unthreaded

    unthreaded Active Member

    Joined:
    21st Feb, 2007
    Posts:
    36
    Location:
    Bunbury, WA
    Of course, none of this means I am +/- NI. I am intrigued by it but am not convinced by anyone currently that this is the next place to put my money.
     
  3. TryHard

    TryHard Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    863
    Fair enough too :) Compared to the Funds you're in, and the other potential investments out there, NI really doesn't warrant the level of attention it gets ! :eek:
     
  4. willy1111

    willy1111 Well-Known Member

    Joined:
    5th Jul, 2006
    Posts:
    54
    Location:
    Melbourne
    Hi Unthreaded,

    If your happy to share I would be interested to know why you are in the funds you are in and what your selection criteria consists of? How long have you been in the funds? And also what percentage of your capital is allocated to each fund.

    I noticed the top 4 on your list of funds are in the investsmart's most popular funds category - and have had exceptional returns over the last few years.
     
  5. coopranos

    coopranos Well-Known Member

    Joined:
    11th Oct, 2006
    Posts:
    498
    Location:
    Perth


    Mate, dont think everyone here is trying to get people to leverage to their neck on everything, if you make an assessment and decide you are happy with your current risk/return, then you are doing an awesome job.
    I think you will find the issues all start when people try to suggest that their own risk level or risk assessment of a particular investment is the only possible one that everyone should have. The reason 20 people invested in the same product can all get different net returns is purely their own assessment of the best way to structure their own investing. Also dont get too hung about about the NI Funds, from what i gather there is a fair amount of emotion attached to them, probably because many people on the forum know or are familiar with its manager. If the fund manager of CFS Geared Share Fund posted here you can bet there would be the same level of discussion about it!
    The most important bit of advice I know about investing is make sure that every decision you make is the product of your own research, understanding, and conclusion.
     
  6. unthreaded

    unthreaded Active Member

    Joined:
    21st Feb, 2007
    Posts:
    36
    Location:
    Bunbury, WA
    I'll do the best I can to answer this, but with the following caveats:

    Although I believe these were my reasons at the time, I'm sure some post justification has entered the equation.

    The earliest decisions were influenced by a sense of "you've got to do something", so getting over the inertia was as important as getting things right.

    In the end when choosing between multiple similar funds with similar returns rating etc, irrelevant issues like whose PDS came first in the post have greater effect than they should!

    Decisions were made over a period of years. I didnt have a pool of capital and then made a decision to apportion into a portfolio, rather I built investable amounts then decided where to invest. This probably has a bigger influence than anything else. That is, at each point I'm making a single decision on how to invest a quantum of money. Given I want a degree of diversification in most cases it isnt a stick with this vs add/swap to that.

    "Why your in the funds your in and what your selection criteria is" - I wish the two things corresponded neatly but they dont. I guess that their are 2 things of interest, why I made the selections I did at the time, and how I would select if I was making those decisions today.

    Although all investment information contains the disclaimer regarding past performance I believe it is one of the few rational ways to evaluate competing claims. Established funds with consistent performance over their existence indicates competent people/structures/strategies. Funds that have existed over longer time frames allow us to see how they handled differing economic climates. That doesnt mean I'm averse to a fund that has poor performance in a downturn, so long as it compensates with better performance in the eventual upswing.

    I'm a long term optimist so that biases me to bull performers.

    Secondly I would like to know, understand and share the philosophy of the fund I'm investing in. It is becoming easier to know the philosophy of funds via the web. Often you can get a basic idea from the fund name.

    What I put money into

    OM-IP 15 seven. NAB sent me the info and it looked perfect. OM-IP 220 was provided as the comparitive model for the investment and NAB was providing a rising capital guarantee. I had recently sold my business, and undergone a seachange. I was working as a house husband, I had a past history of bad investment decisions, I needed to make a conservative fully justifiable decision to reestablish my credibility. 10% of the portfolio. Would not reinvest in this group, but maintain the investment on the grounds that it was made as an investment with a 7 year time frame. Its current performance is relatively poor (27% in 2.5 years). Im waiting on the latest valuation to see how it performed over February March. If this doesnt show improvement I will probably get out.

    My second criterion for evaluation is the philosophy espoused by the "heads" of the funds. For this reason the Ganes Focused Value Fund has the largest % in my portfolio (~40%) see

    Investment Philosophy - Warren Buffett - Wayne Jones - Clive Gaunt


    I invested here in Jan 2005 and increment annually. While my views change with time and I see this or that as the way to go right now, I ignore myself because I am attached to this fund. It maybe australias berkshire hathaway, although their strategies differ? So now selection criteria here has become irrelevant - it performs regardless of my beliefs, so I leave it be and make new decisions based on my latest thoughts, but dont apply them retrospectively. In other words, this fund has earned its right to be here, it would have to badly misbehave to be removed.

    I became enamored with the theory regarding small caps as good growth investment, but I dont trust myself to pick winners. So I was looking for an investment to mirror this. I picked MacQ for less tangible reasons, I use MQ for my SMSF CMT, If I was investing in a bank I would pick MQ, I like their online access. In other words I could have picked many funds here but MQ was convenient.(~ 3% but slowly growing as I invest spare cash monthly here). Really this is my way of having small proportion of my portfolio in speculatives

    CFS MIF - Geared Share Fund. 11% in this one, geared without being geared? I look at this as the equivalent of directly investing in a blue chip portfolio with a highly paid manager to do the decision making on what to add/drop etc. Similar to the reasoning on MQ, their are many good funds in this space, online access is good but more a liking for their portfolio, also a vague sense of security from the name but I dont know why. Again a place to put spare cash as I like the performance and want more in the future.

    Aust Unity Property Securities Growth. I came across InvestSmart in November last year and found this through their website. A 7 year performance of ~29%, this became my new year resolution and an investment in Jan this year. For some reason I had never associated investing in property with investing in funds. Two months in, this is showing a 3% loss, but i'm more interested in what it will be doing in two years. As this is a growth fund I choose to return any income distribution to my kitty for future redeployment.

    I have no connection to Investsmart but would recommend their site to anyone interested in investment. I now use them to invest for my SMSF - it makes tracking easier, helps in aligning Investment strategy to reality and saves on fees.

    Multiplex development and opportunity Fund - Theyve cashed my cheque but I havent got confirmation yet. This is my latest decision. There are two reasons for this one. First its an income stream with a "guaranteed" 8% and a projected 15%. Second I have been asked to find a suitable investment for someone else (in a totally different life position), This looks "appropriate" for them, but I'm not suggesting anything until I check it out. In this case the only way to be safe is to be in as well. If I had any sense at all I would not be in this position, but I am so I better deal with it!

    Investment in TLSCA - I believed this was just irresistible. With an election coming up this float had to be beyond appealing, it had to just about have a government guarantee. Invested personally, SMSF and helped kids in. The capital gain on it is beyond expectation and the kids love it. The market dip just after the dividend led to very good dinner table talk about whether to hold or not. Their rationalizations now the price is back over $3 with the dividend out are illuminating. The mindset of kids differing by a very few years is quite compelling.

    IP in regional WA, this was one of those investments you make on grounds other than your investment beliefs. My son was priced out of buying his own home. We bought the IP 50% tenants in common with our son. He rents it with a friend and is slightly cash positive to when he was renting for himself. He loses government 1st home buyer grant, but believes he will be better off in the long run. We back him.

    Phew!! I think I covered it all!
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Thanks for that unthreaded ... great to hear some honest self-assessment and to understand a bit of your thought processes during the decision making.