Managed Funds The unofficial Navra performance tracking thread 2

Discussion in 'Shares & Funds' started by Mark Leo, 18th Oct, 2007.

Join Australia's most dynamic and respected property investment community
Thread Status:
Not open for further replies.
  1. MichaelW

    MichaelW Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    839
    Location:
    Brisbane
    Update

    Hi Guys,

    Time for another hard numbers update I think. We're almost a month into the quarter so the comparison and annualised numbers make a little more sense now.

    OK, here it is:

    Navra performance this quarter to date: 0.8% (12.4% annualised)
    ASX200 performance this quarter to date: 1.1% (16.9% annualised)
    Navra under-performance this quarter to date: -0.3% (-4.5% annualised)

    Chart of relative performance plots attached. And I think I'll avoid making any commentary for a while as it seems a bit too hot a topic... ;) Might let the fund's performance speak for itself.

    Cheers,
    Michael
     

    Attached Files:

  2. Denis__

    Denis__ Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    49
    Thanks Michael
    Please keep this going.
    regards

    Denis
     
  3. coopranos

    coopranos Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    468
    Location:
    Perth
    Looks like Navra has another shot at the title on the way, hopefully it has a lot of cash!!
     
  4. redrover

    redrover Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    124
    Over the last 2-3 years we have had a number of interest rate rises with another one on the way. How can these rises be fed into the equation to see how the fund has really performed? I mean by this if it had returned an average of 18% p.a. over the last 3 years with the continual rises in interest rates (which will affect margin loans etc.) then in real terms has not the return actually been reduced by this effect?
     
  5. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,393
    Location:
    Sydney
    I think adding a completely discretionary measure (eg borrowing) into the equation is unfair for comparison purposes. One person may choose to borrow at 50%, someone else may choose to borrow at 70% and someone else may choose to not borrow at all. All three will experience vastly different net returns - so it is not reasonable to compare them.

    Similarly, trying to compare after-tax returns ... depends very much on the individual and the structures they use. Fair comparisons rely on common denominators.

    Sure, if you want to look at your own performance figures after costs and after tax, that's fine ... indeed, it could be a useful exercise for comparing what your real personal returns are over time - but that's rather irrelevant to a broader question of performance versus an index or performance versus other funds.
     
  6. redrover

    redrover Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    124
    Sim
    I think my comparison is a reasonable query on the fund's ongoing performance. Using Steve's LOE we have borrowings against real estate to fund the initial investment and future margin borrowings to leverage the gain (!). Whether you have a 50% LVR or a 70% LVR the interest rate remains the same. Now the PDS said the fund aimed at a 10% return approx. (?) so as interest rates creep closer to the 10% and if the fund only did 10%, the whole exercise becomes increasingly pointless! The fund has returned more than this so well and good, but as interest rates rise, even if you had put in cash initially, your margin loan would not be worth using with such a very small return.

    Now if you put in cash only and no borrowings, your returns are being diminished if you are looking to top up negative properties as the figures will increase on this side of the equation, and with a potential three rate rises predicted over the next year (hope they are wrong) the fund needs to perform at an increased rate of return to match rising interest rates.

    If the fund drops its performance and rates continue to rise, then obviously there is an exit point where investment is no longer warranted. If you still have negatively geared properties at this stage then take some of the money you put into NI and pay down the loans to a break even level.

    I think as others have expressed there is some concern that NI will never outperform, other than to lose less on a downturn in the market.
     
  7. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,393
    Location:
    Sydney
    I don't see the point of considering gearing in the context of whether a fund will outperform the index. They are two unrelated issues. If the index returns -5% for the year and the fund performs +8% for the year, it has outperformed, but not covered your cost of capital if you borrow at effectively 100% LVR.

    At the same time, if the index performs at +20% and the fund performs at +19%, it has underperformed the index, yet you have easily covered your cost of capital and a lot more.

    These things are completely arbitrary ... if the fund no longer suits YOUR structure, then you would be well advised to reconsider the investment, but that does NOT make the fund a bad investment for anyone else.

    Steve's LOE is not the only purpose for investing in the fund. My father-in-law is a self-funded retiree and thinks the fund is fantastic ... he has zero borrowings and so couldn't care less about interest rates (other than perhaps comparing his investment returns against the risk free rate achievable by cash).

    If you are wanting to come up with some equation for determining the efficiency of the fund versus a theoretical LOE strategy - then that is a completely separate argument and should be made separately to any discussion of outperformance or underperformance of the index - because it will be based on theoretical figures only (or relevant to only a single person).
     
  8. Mark Leo

    Mark Leo Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    54
    Well it seems that there is still some interest in this discussion. Thanks for all of your thoughts everyone, and your charts Michael.

    I'm generally happy with the performance of the fund. If it can continue to almost outperform the ASX200, while holding a significant cash balance, then that's a fair compromise.

    Happy to hear any alternative views.

    Mark Leo.
     
  9. hillsguy

    hillsguy Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    499
    Location:
    Adelaide
    Some really good insights in this thread.

    Michael - you do an excellent job in your posts. I really enjoy your analysis. Keep them coming !

    I will however throw a spanner in the works ...

    Personally I prefer to take a long term view of MF invested (ie- 3 - 5yrs) when assessing overall performance including CG. In my case the fund is part of my 5 yr plan so don't necessarily monitor fund on a daily basis. I do however sense some folks here may be taking a shorter term view which can cause some stress and/or anxiety. :rolleyes:
     
  10. Mark Leo

    Mark Leo Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    54
    Hey Michael,
    Any chance of an updated chart? I'm interested to see how this recent voitility looks?:)
    Mark Leo.
     
  11. hillsguy

    hillsguy Well-Known Member

    Joined:
    25th Aug, 2015
    Posts:
    499
    Location:
    Adelaide
    I had a look at the Navra site just then and see YTD return as of Nov 12 currently @ 2.70% :eek:

    Do any others make reference to this ? To me it's the only real indication of how the fund is tracking on a weekly basis + of course Michael's analysis :D
     
  12. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,393
    Location:
    Sydney
    [chart=CF;NAV0001AU;thisy;mav;20071114]Navra Blue Chip Australian Share Retail Fund[/chart]

    :D
     
  13. Nigel Ward

    Nigel Ward Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    989
    Thanks Sim

    Question about your chart, not NI...the description is value of $10k invested on 2 July 07...but it starts on day one much higher than that...

    Or am I misreading it?

    Cheers
    N.
     
  14. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,393
    Location:
    Sydney
    No, it says "Value of $10K invested at inception", which was May 2003.
     
  15. Glebe

    Glebe Well-Known Member

    Joined:
    29th Sep, 2019
    Posts:
    819
    Location:
    Central Coast NSW
    It actually says 'value of 10k invested at inception - this financial year'

    then in the legend it simply says 'value of 10k invested'
     
  16. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,393
    Location:
    Sydney
    The "this financial year" part refers to the period being displayed. I should make that more clear.

    The "$10K invested at inception" (with distributions reinvested) is an industry standard way of comparing funds. I would normally just show percentage changes, but that doesn't work when also displaying moving averages.
     
  17. Chris.R_WA

    Chris.R_WA Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    88
    Location:
    Perth, WA
    If you check the Compare Funds site now, Navra has a nice little 1% tick up for yesterdays performance, and we could reasonably predict the same again based on ASX today.

    So tomorrow the ytd performance should be about 4.7%

    Chris
     
  18. redrover

    redrover Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    124
    YTD Lincoln Aust Share Fund +12%. Voted No. 1 Fund for Large Cap Growth Funds and No. 1 from over 1400 funds with 50%+ return last year. Methodology for trading better than NI - lets profits run and invests in some mid caps.:) Trading platform StockDoctor used in most brokers' offices and after attending presentation to investors the other week very impressed with the calibre of staff.

    I switched some funds out of NI into Lincoln in July and been very happy with the results.:):)

    For further info check their website at Lincoln - Intelligent Sharemarket Solutions
     
  19. MichaelW

    MichaelW Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    839
    Location:
    Brisbane
    Thanks Redrover,

    I might substitute that fund for my Navra holdings in my diversification strategy outlined in the Challenger China thread. I like that approach better than the DCT approach. Again, that is just my personal preference. I like a value approach to buying as I've mentioned earlier.

    I've requested a prospectus direct from their site. It doesn't appear to be offered via InvestSmart. In fact, I can't even track down its APIR code online.

    Cheers,
    Michael.
     
  20. MJK__

    MJK__ Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    271
    What fund are you with? Retail or wholesale?

    I suppose these funds pay no income as they are growth focussed?

    MJK:D
     
    Last edited by a moderator: 15th Nov, 2007
Thread Status:
Not open for further replies.