Managed Funds Selling out of Managed Funds

Yeah I know but the loss is difficult to justify. But I will definately water down exposure to Colliers International Property. I am not just ready to take the loss completley yet. Thinking of selling about half of the unit holdings this month and half in December.

This happened as an accident and I didn't bother to fix it up. I gave my Margin Lending people fax instructions to make an additional investment into Geared Fund and they put it into Aus Share Fund. And at that time I said hack it...I'll see what happens....

I also do have some rainy day savings. About $25K cash assessible within a month notice(high interest capital guaranteed scheme- I consider this to be lost money to be found again in times of big trouble) and about $5-10K available at all times just in case I want to indulge myself in something. It's so difficult for me to save over $10K because every time I go over I tend to take half and buy some Blue Chip Shares, or go into an investment scheme. [I missed out on MBL just couple of months, becaue I didn't have $10K] Or there appears a brand of share that I want to buy and my savings is over $10K.... And this is the way I build my share portfolio. And I have some shares & managed funds that's not secured for margin lending, so even though my margin lending LVR is around 60% my actual is more like 45%-50%

 

The facts speak for themselves.. Are you suggesting they made up the yearly return figures?

Point is how people can consider colliers to be a dog, I don't know. look at this chart

http://www.colonialfirststate.com.a...riod=MLY&CompanyCode=001&width=600&height=400

The fund has over doubled in just over 2 years, even with the recent pull back. Just because there is currently some bad news regarding property, property overall is a solid investment long term. Anyone who invested into this fund 3 months ago, and then judges the funds performance based on 3 months had the wrong view from the start when they got in.. The fund manager recommends 5 year + view.. so why are you panicking if the 6 month return is negative?

A fund wont go up all the time, do you expect it to double over 2 years, and not retrace at all during this period? Colliers is a very sound fund, and I would hardly consider it a 'dog' when its last 2 year performance proves otherwise.

As Rivkin said, markets never go up in a straight line..

 

LOL!!

I'm exiting Property funds atm because I was severely overweight last year during the good times. So I suppose I'm selling last years performer. But its this qtrs dog and subprime has a way to go in my opinion. The LPT sector is good for income yeild this year if you are not gearing (cashed up) but looks shakey if you take out margin loan interest.

MJK

 

No I was not criticizing BT as a fund manager, merely their informational advertising. I have reread their 'Investment Truths' booklet and do concede the information does have some factual basis, but the overall conclusions drawn and advice given is of a very general nature, and not helpful at all in determining whether Colliers is a good investment. I might also point out that maybe BT should take more notice of its own truth number 7:'Avoid chasing returns', ie; stop churning stocks.

To me the chart is stark support of my view that now is not the time to be invested in Colliers, with such as strong downward ward trend in the funds value over the last 6-7 months. The fund hasn't recovered from the August Sub Prime Mortgage backed securities crisis, whereas non property funds have bounced mainly upwards. When the funds trend reverses back onto an upward path, it would be worthy of consideration.

I do take 5 years investment period into consideration, but I also give a heavy weighting in my portfolio, to the expected performance within the next year. My strategy is to hold stocks and funds for at least one year for capital gains tax discount. Other factors are taken into consideration in all decisions.

Cheers

 

Another bad night OS.. DOW down 150 pts at present.. plus our dollar slid 2.5c

Looks like our dollar is now falling.. this should offset OS losses in the markets. So it will be interesting if our unhedged international funds will be the out performer this month. I would suspect this will be the case.

I wonder how much further we have to go.. prehaps due to the yanks.. the good times are over.. and they tell is Bin Larden is the worlds biggest threat!

 

Dow closed over 210 points down and or dollar is 3 cents down! ouch!

 

Yep, great isn't it!

I've been waiting for the next wave of sub-prime fear to pull the markets back for a while so I can execute my managed fund rebalancing strategy. I loved Sim's post, thanks mate! And his thinking is very much aligned with my own in this regard. I consider that China and Resources have a 20 year bull run ahead of them with the odd bump along the way. My 100% ASX blue chip exposure whilst good in that it will beat my cost of capital, is sub-optimised to profit from that bull run. A rising tide lifts all ships, but I'd rather be on the big ship.

So, I'm going to sell down my Navra holdings and in doing so will probably realise a small profit. On yesterday's unit price that profit since March is about $25K. A huge whack of that will probably be eroded by today's drops though.

But this is a good thing, in that I believe this pull back is temporary and the Navra cash holding is buffering my fall. I'll rebalance after the market has pulled back then hopefully ride the superior returns from my diversified portfolio through the upward correction and continuing bull.

When diversified I'll hold:

35% ETL0089AU Lincoln Retail Australian Share Fund
35% JBW0008AU Goldman Sachs JBWere Resources Fund
15% PLA0004AU Platinum Asia Fund
15% HBC0027AU Challenger China Share Fund

This selection is based on my own assessment of the likely segments to outperform over my strategic 5-10 year investment horizon. That, and a little bit of a diversification hedge built in. Its no doubt imperfect, but I think it better than my current fund weightings.

Cheers,
Michael

 

I agree with your thinking Michael. I recently invested big into Platinum ASIA and CFS wholesale global resources, so I'm also betting on ASIA and resources to continue to grow.. I am though holding onto my UBS global property fund, even though its a loss now.

 

Just a quick question of how you do your calculations of your profits.

From my memory the unit price around March 07 was around $1.15-1.17 and the unit price is around $1.12-$1.13 now, effective loss of $0.05c per unit. So is the profit you talk about (return in March & June & Sep - capital loss)? And is this normally the way we should calculate our investment return?

 

Hiflo,

CLosing Unit Price on 20/11/07 1.1295
Plus April Dividend 0.045
Plus July Dividend 0.0922
Plus November Dividend 0.028
Less Opening Unit Price on 29/3/07 1.1884
Equals 0.1063

Or, a return of 10.6 cents per unit on an initial investment of 1.1884 per unit. In other words, a 9% return over the 8 months. You need to look at your absolute returns and to do this need to add back your distributions.

From this I subtract my interest costs of an AER of 8.1% pa weighted cost of capital. Over 10 months (236 days to be precise) this is 236/365*8.1% = 5% interest. Takes my total profit to 9% - 5% = 4% over the period. Or, a profit after costs of 4% times my initial investment = $33K. But the closing unit price has dropped in the last few days so that profit is reduced. My extrapolated profit on today's calculated closing unit price given the current ASX200 level is only $16K instead of $33K two days ago.

Arguably I should have sold out when the ASX200 was at 6800 and my profit was around $60K then bought into my new diversified portfolio when the correction played out, but that required too much crystal balling for me. Who was to say that 6800 was the top at the time. But I can say that the market is looking a little oversold at the moment IMHO.

Cheers,
Michael.

 

Thanks Michael for your clear explanation of how to calculate the total returns!!

To get a true picture of my loss and profit I will have to redo my calculations on my managed funds.

May be my loss is not bad as how I play it out to be!!

 

If you did a lot of homework before you got into these funds stick to your guns.

If you are properly diversified, stick to your guns.

Look at the funds going lower as an opportunity to add more units.

The biggest mistakes I have made is selling investments.

I have the colliers fund you mention as well. When shares fall, property will probably go up again. I ain't selling anything.

hope this helps you some.