As some of you may know I just recently began investing. I invested $5000 into CFS's 452 geared Australian share fund. I invested just before the market crashed, so my fund has been up and down. It seems to have recovered quite well, and is back into positive numbers at the moment. Anyway, I'm keen to expand on my portfolio and was looking for a bit of advice. I still have $10,000 in the bank, which I am happy to play with (invest). At this stage I'm just going over some options in my head. 1) Put more money into my CFS geared fund - I would like to make ongoing contributions to all my funds anyway. 2) Apply for a new fund - Not just for the sake of 'diversifying', but I would like some slightly different market exposure. I would still be looking for a growth fund, but I was thinking of maybe entering a property fund, or a non-geared share fund. For some reason I'm a bit cautious of international funds, which I don't think makes any sense. 3) Super - I have no super fund, and I know I should probably do something about it. I should probably be doing this regardless of anything else I'm doing. Opinions? 4) I don't feel comfortable investing directly in shares at this stage. But I have heard mention of LIC's and some other investment options. Again, I'm not really sure about the whole thing, but should I be looking into it? What would you do if you were in my position? Any comments and opinions are appreciated. I know you guys can't give specific financial advice, but any opinions are welcome. Cheers guys.
Platinum Asia could be a goer fund wise. (why do you think they dont make sense?) RE super: one thing it doesnt give you is flexibility to move your cash around when you like. I dont think you can invest in direct property with super for example.
Thanks for the reply Voigtstr. What I don't think makes sense is the fact that I tend to overlook international funds, for reasons I don't even know. I have heard a few positive reports on the Platinum Asia fund. I'll give it some consideration.
All depends what you want to do in life.... Super is fine if you expect to work till your 65 or you need to park a large profit for tax reasons and don't mind the delayed gratification. I guess we all like to sit in our comfort zone and localy based funds do have a familiar comfort level built in. O/S funds unless they invest in well known brand names removes some of that comfort because you are dealing with unknown companies to you. If I was starting again, I would use a geared fund as you have for aussie shares, a property fund with coverage of broad markets, Platnium Asia and Navra. Navra for the levels of income that should be generated under most market conditions, while not tax effective it never hurts to make a profit. Currently I am picking up some US exposure and will have a dip into Platnium Asia and Navra.
I'm leaning towards a property fund at this stage. What is the difference between unlisted and direct property, from an investing (managed fund) point of view?
Direct property asuming its commercial stuff = low LVR and putting all your eggs in one basket aproach. Managed funds spread the risk and in a lot of cases allow you to gear up to 75%, some have internal gearing much like a geared share fund, so in reality you can gear over 75%.
Cheers guys. When entering search criteria at investsmart, under the asset class, should I be searching under 'unlisted and direct property - Australia' or 'Equity Sector Australia - Real Estate' ? What's the difference here? I'm trying to get the best results for a property fund. I have run through both searches, but am not sure of the differences.
Unlisted and direct property are quite different investments than listed property. Listed property trusts (eg Westfield) are freely traded on the stock exchange - thus have high liquidity. Unlisted and direct property trusts are not traded - there is limited liquidity (some only allow you to redeem units once or twice a year if you give notice in advance), and generally you can't gear against them (unless there is a loan product specifically in place for that trust). Personally, while building an asset base, assuming you want to use leverage to help you, then for property I would either invest directly in LPTs or else invest in a managed fund that itself invests in LPTs (a property securities fund). Direct property is fine if you want a relatively low risk long term investment and aren't necessarily looking to gear into it - but otherwise, listed property is the way to go.
Thanks mate. That makes alot of sense. I was having a browse on InvestSmart, and while the unlisted and direct property seemed to have a few better performing funds, the minimum investment was often $20,000. So I will give these a miss, for the time being at least. Does anyone have any recommendations for good property funds? Should I approach/research these funds differently than share/stock invested funds? Lastly. If I select a new fund that isn't managed by CFS, can I still have it lined up to my account there? It would be alot easier to manage if everything was all in the same place. Cheers.
What are some of your opinions on this fund: Fund Profile What do you think would have been the reason for the poor performance over the first 6 months?
According to InvestSmart, that fund you linked to is closed - so you will need to choose another fund. Why not just go with one of the CFS property funds ? They all invest in largely the same LPTs, so performance will be similar. Poor performance in property securities funds has been widespread over the past 6 months - all LPTs dropped ... they were overpriced and I suspect the mortgage issues in the US is having a negative impact on listed property globally.
Whilst I use Investsmart to track my funds etc I've found that the search function on Directaccess a lot better for researching funds. Has anyone else found this?
I just had a quick look at the direct access site. The search seems alot easier and quicker, but I like the other options available for searching at investsmart. They both seemed to turn up pretty similar results. Actually, I like the minimum performance search feature at direct access. I guess both are useful. There seem to be quite alot of CFS property funds. A quick search returned at least 10 different funds. Is there going to be a big difference between funds? They all have fairly similar performance.
Check the MER on each of the funds ... some of them use a third party fund manager and you'll probably pay a slightly higher MER than the in-house funds.
Hi voigtstr, You can invest in direct property, you just can't have any borrowings in the fund. I know a handful of people who have property in SMSF's. Note that you can also borrow money to invest into super, but these borrowings are non-deductible, so it's not generally recommended. Mark
Do you guys think there is much merit in trying to diversify my fund managers? So rather than selecting another CFS managed property fund, should I try to go with a different fund manager? I want to eventually have a good spread of 4-5 funds with different market exposure. Do you think I need to be concerned with selecting different managers, or just choose the appropriate funds regardless of management? Cheers. PS. If I do select a fund, which isn't managed by Colonial, can I still track it in my CFS account? Or will I end up having funds all over the place?
For your super fund, if you are still young, just roll over the existing super fund to a high growth fund i.e. Australia Geared Share (your CFS fund or Perpetual). These fund are quite functuation but it gives a very good return for a long run. Blog Wealth Knowledge
