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Resource Funds?

Discussion in 'Managed Funds & Index Funds' started by archangelsupreme, 3rd May, 2008.

  1. archangelsupreme

    archangelsupreme Well-Known Member

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    Hello,

    Do people think it's a good time to invest in Resource Funds....they seem to have hold on quite welll.

    Some i'm looking at are the CFS FC Global Resources and the Goldman Sachs Global Resources funds?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Resources have done pretty well for a while now.

    The question is - are we near the top of the resources cycle, or has it got further to run yet?

    Personally if I was looking to invest in resources, I'd either want to be taking a relatively short term view (get in a make some money now, but be ready to get out as soon as the market looks like turning - if you can pick it!) ... or a long term view (so that you can ride through the inevitable downturn in commodity prices that is a normal part of the cycle).

    In other words, if you are not looking for a quick buck, but are likely to want your money back within the next 5 or so years (ie before the next resources boom after this one) I'd be nervous about resources right now.

    ... but at the end of the day - I have no idea how long commodity prices are going to hold up this cycle - it could be years yet.
     

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  3. archangelsupreme

    archangelsupreme Well-Known Member

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    I'm eager to diversify a bit more...........and in for the long run....say 10+ years:

    I curently hold the following funds:

    * Macquarie Small Companies Growth Trust
    * BT Imputation Fund
    * Challenger China Share Fund
    * CFS FC Geared Share Fund

    Is there a sector I should be looking at? I would like to invest about $5k to start off with.

    I was originally looking at the Merryl Lynch Black Rock Growth Fund....though i'm not sure if this offers alot of diversification to my current portfolio. The other one is Platinum Asia, but it requires a hefty initial investment......are people on Platinum Asia through a platform?....is there one which people recommend......I saw on Investsmart that Skandia has one?

    There is always Property Trusts....but i'll be getting into property soon, so not sure if I could use my money elsewhere?
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    You've got exposure to Asia via the Challenger China fund (although that exposure isn't very broad and misses other areas like India).

    You've got exposure to Australian large cap via BT Imputation and CFS Geared Share and Australian small cap via Macquarie Small Companies.

    You also have a fair bit of exposure to resources through the Australian funds - although the CFS Global Resources funds also have exposure to foreign resources companies, which is worth considering.

    You don't have any property exposure - although I'm not sure I'd be rushing into listed property just yet. Tough call on that one ... although significant discounts are available in that sector now - so over the long term now may be just as good as any time to get in.

    You don't have much foreign exposure - although foreign stocks have struggled in recent years and aren't looking like showing better returns than local stocks for a while yet (especially with the continued strength in the AUD).

    Just some suggestions.
     
  5. archangelsupreme

    archangelsupreme Well-Known Member

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    So are we saying that I should focus on Australian stocks and stick with what I have? or should I add another fund?

    Is there one that people recommend out there? Thanks.
     
  6. crc_error

    crc_error The Rule of 72

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    if you want more diversification, look at emerging countries, australian listed property, listed international property, precious metals and unlisted australian commercial property, global infrustrure.

    getting into listed property now is great as those sectors have been Heavily sold off lately and offer discounted prices.
     
  7. DaveA

    DaveA Well-Known Member

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    id be prefering listed proeprty rather than unlisted property around now
     
  8. archangelsupreme

    archangelsupreme Well-Known Member

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    I've been sitting on the sidelines with share investment and haven't introduced anything new since October (i've continued with regular investments into the managed funds though).

    I'm quite interested in Listed Property and feel that it adds some extra diversification. Is there a good site which lists Listed Property Trusts according to rank and performance? Though i'm kinda worried about the tax implications. What tax condition would best warrant an investment in LPT?

    Or would it be easier to invest in a Property Securities fund like the Colonial Global Property Securities...or even the local version.

    Another option is to go with Navra, which gets an excellent rap here. The reason why i'm starting to think this is that starting next financial year, i'll probably have a negative geared property and my income currently is a comfortable margin away from the next tax bracket. Is this something which I should consider for my portfolio....or would I be just doubling up too much on Australian Shares?

    I'm keen to increase my international exposure and have being eyeing the Platinum Asia Fund for a while. Though that one has a high entry of $25k...i don't have that much cash to spare at this stage. What other alternatives are there.

    -------------------

    On the direct side, i've been keeping an eye on Macquarie Group (MGQ) and PTM (Platinum Asset Management) to buy.....and at least one of the banks.
     
  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I came across this site the other day which looked interesting: Property Investment Research (PIR)

    ... I'm not sure what their reports are like - so use at your own risk.
     
  10. Property WA

    Property WA Active Member

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    On your Resources question - Emerging Resource Company Share Fund

    DEFINATELY NOT a recommendation to invest. Just noticed it hadn't been mentioned. Very concentrated fund. Small caps. Resources. Mixx it together you got a high risk cake. But worth a read even for information sake.
     
  11. archangelsupreme

    archangelsupreme Well-Known Member

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    What do people think of the following fun:

    Macqarie Direct Property Fund.

    Fund Profile

    Seems to get a good rating on Investsmart.

    Also, I know i've kind asked it before...but between the Goldman Sachs JB Were Resource Fund and the CFS Global Resources Fund.. Which one do people recommend more? is there a major difference between the two?
     
  12. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    What do YOU like about this fund? Why are you considering it?
     
  13. archangelsupreme

    archangelsupreme Well-Known Member

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    Strong growth, I don't have a Property fund yet and this one has performed well. It also invests in Direct Property.
     
  14. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I think you'll find it mainly invests in direct property (> 90% currently). Not that there's anything necessarily wrong with direct property - but such assets are not usually growth oriented. You have to ask how they are producing high growth from what is essentially an income producing asset class (Fund objective: "to generate income returns") ?

    My concern is the other statement in their objectives "and take advantage of some of the property opportunities within the Macquarie Bank Group to grow the Fund" ... what does that mean? Internal MacBank jiggery-pokery that they are known for - valuing assets rather generously and internal sales within the group?

    What is their gearing level? Are they another Centro with 60%+ LVRs ?

    I'm not saying this is a bad fund (I haven't researched it) ... but you really need to understand what it is you are buying.