Managed Funds The unofficial Navra performance tracking thread 2

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

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  1. Alan__

    Alan__ Well-Known Member

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    Ok......just did a quick check......

    Looks like for last Quarter the Exchange rate moved from about 0.8247 to 0.8752 which under the 'old' setup would have worked against the Fund. My understanding is the cash is now kept in Australian Dollars so not exactly sure what the direct impact is now but either way it wouldn't have been a positive.

    DOW looks like it fell about 1.4% from 13448.9 to 13264.8 and a Distribution of +1.06% was given by the Fund.
     
    Alan__, 7th Jan, 2008
    #81
  2. Simon Hampel

    Simon Hampel Founder Staff Member

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    It doesn't take long to check a chart for the DJIA for yourself :p

    Beginning of Oct 07, Dow was at around 14,000 ... end of Dec 07, it is getting close to 13,000 ... I think there's your reason - falling market - not much in the way of profits to be made.

    EDIT: I see you did this for yourself - good boy :D
     
    Simon Hampel, 7th Jan, 2008
    #82
  3. Alan__

    Alan__ Well-Known Member

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    Hi Sim.

    It doesn't but even then I got it wrong. :eek:;)

    Correction from above. I'd accidently used the 3/9 DOW close instead of the 1/10. DOW closed on 1/10 at 14087 and at 13264 on the 31/12 which means a drop of about 823 or 5.8% for the Quarter. Difficult conditions indeed.
     
    Alan__, 8th Jan, 2008
    #83
  4. Alan__

    Alan__ Well-Known Member

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    Actually Sim, do you know how(if?) the Exchange Rate affects returns now?

    My understanding(happy to be corrected) was that the cash component was now kept in Australian Dollars which would reduce Exchange Rate issues. Fine. What happens when the stock is actually traded though? Wouldn't this need to be done in US Dollars and then returned as Australian Dollars so that there is still an Exchange Rate exposure, albeit a reduced one? Not sure. :confused:

    If you don't know, I'll ask Mark Raymond at some stage.

    Thanks.
     
    Alan__, 8th Jan, 2008
    #84
  5. Simon Hampel

    Simon Hampel Founder Staff Member

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    Yes exchange rate affects overall returns in a number of ways:

    1. net asset value of a portfolio of US shares will fluctuate with currency movements. If you hold $100m worth of US shares and the AUD rises 10%, your portfolio will correspondingly be worth 10% less in AUD terms (and vice versa for a 10% drop in the AUD). This is the big impact that is unavoidable - but doesn't affect distributions directly, only the growth component of the return.

    2. transaction costs are higher given that they have to convert to/from USD every time they trade.

    My understanding is that they changed the way they calculate returns on each share ... if they invest AU$1m in a share, they first convert it to USD, then buy the shares (net position at this point is worth somewhat less than AU$1m due to costs and currency conversion fees).

    Now, rather than tracking the portfolio in USD like you normally would - they convert each share price to AUD based on the prevailing exchange rate on the day (may be updated more often than once per day even ??) ... this means that their algorithm for determining when to buy/sell a share also takes currency movements into effect.

    Example: a share they bought goes up in value by 1%, but the AUD drops 2%, that's actually a net fall in AUD terms, and they would be looking to buy more. Currency just becomes a second variable in the equation.

    3. trading profits and dividends (if any) are converted immediately back to AUD once received and then sit in the bank account in AUD - so no direct currency impact once the cash is received (beyond the cost of conversion - and potentially movements in exchange rates between sale and settlement of the trade ?)


    ... so in general, other than costs ... my understanding is that currency movements have very little direct impact on distributions as such - but it has a major impact on determining whether the traders will buy/sell and hence take profits.

    In a falling market like we've seen, with a rising (or stable) AUD, the trades will be mostly buys, thus not a lot of profit generating activity occurs, which results in a lower distribution.


    NOTE: I am not sure this is exactly how things work - please verify with NavraInvest if you are interested.
     
    Simon Hampel, 8th Jan, 2008
    #85
  6. Alan__

    Alan__ Well-Known Member

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    Thanks Sim.
     
    Alan__, 8th Jan, 2008
    #86
  7. Mark Leo

    Mark Leo Well-Known Member

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    Saw an interesting quote on the NavraInvest web site the other day as follows: 'On a quarterly basis, we are pleased to report that we have significantly out-performed the benchmark. The returns for the Retail and Wholesale funds were -1.64% and -1.54% respectively against the benchmark return of -3.47%. We out-performed by almost 2% over the last quarter.'
    Mark Leo.
     
    Mark Leo, 18th Jan, 2008
    #87
  8. Glebe

    Glebe Well-Known Member

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    LOL.........
     
    Glebe, 18th Jan, 2008
    #88
  9. Simon Hampel

    Simon Hampel Founder Staff Member

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    This is one of the reasons why I was actually keen to see a move away from a straight performance fee on the funds ... outperforming the index while still losing money is hardly anything to celebrate. :rolleyes:

    Sure, I understand the argument about losing less money than if you had bought the index ... but in absolute terms, it is difficult to justify.

    I know some funds have a performance fee which is based on outperformance ... but only when positive returns occur - which I think is generally more reasonable.
     
    Simon Hampel, 18th Jan, 2008
    #89
  10. voigtstr

    voigtstr Well-Known Member

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    So not investing at all would have outperformed the market by 3.47% ?
     
    voigtstr, 18th Jan, 2008
    #90
  11. Simon Hampel

    Simon Hampel Founder Staff Member

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    Hehe ... yup!

    Of course, it's pretty much impossible to know these things in advance - you have to take the occasional negative quarter with the positive ones ... the assumption is that the positive quarters will more than make up for the negative quarters over a period of several years - otherwise why would you bother ?
     
    Simon Hampel, 18th Jan, 2008
    #91
  12. Mark Leo

    Mark Leo Well-Known Member

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    Does anyone have an update on how the Lincoln fund is tracking with the recent market decline?

    Mark Leo.
     
    Mark Leo, 19th Jan, 2008
    #92
  13. redrover

    redrover Well-Known Member

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    Any one received their quarterly distribution statement yet? Looking back on the previous Sept qtr I noticed at the bottom they had taken $2400 out in fees. If this is a quarterly charge based on your investment, is it calculated at the unit price on the last day of the quarter or is it levied as a percentage of the total number of units you have invested. If this is a quarterly levy then I will have said goodbye to $10K in a falling market, which will effectively wipe out one quarter's return altogether! NI looking a very unattractive investment long term.:( but when I spoke to them the other day love the way they keep coming back with "it is a long term investment and you should invest for 5 years etc." Guess what 5 years is up in May, so they had better make a hell of a recovery by then!?!
     
    redrover, 20th Jan, 2008
    #93
  14. Glebe

    Glebe Well-Known Member

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    90% increase in 5 years ain't too shabby, no?
     
    Glebe, 20th Jan, 2008
    #94
  15. redrover

    redrover Well-Known Member

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    The unit price has level pegged for nearly 5 years. Your assumption of 90% over that period presumes a reinvestment of distributions, however compared to a 400% return on BHP shares over the same time with reinvestment of their dividends, NI does not rate very well!! BHP up over 100% in last 12 months alone, not allowing for present pull back.
     
    redrover, 21st Jan, 2008
    #95
  16. Glebe

    Glebe Well-Known Member

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    Yes compared to BHP it's absolute return is poor, but to ignore it's distributions makes no sense whatsoever.
     
    Glebe, 21st Jan, 2008
    #96
  17. Chris.R_WA

    Chris.R_WA Well-Known Member

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    Navra cash holdings?

    Anyone have an idea how much cash Navra are holding at the moment?

    I would have thought they would be moving towards fully invested by this stage?

    Cheers, Chris
     
    Chris.R_WA, 22nd Jan, 2008
    #97
  18. redrover

    redrover Well-Known Member

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    Friday said they were at 8%. Does not leave much left to invest with the last two days' drop!!
     
    redrover, 22nd Jan, 2008
    #98
  19. hillsguy

    hillsguy Well-Known Member

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    I am hoping the unit price comes back up again soon ... getting real close to a margin call.
     
    hillsguy, 22nd Jan, 2008
    #99
  20. redrover

    redrover Well-Known Member

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    Unit price now down -7.18% at .9870c. Dow futures down 500 and Steve said everything is looking great today!!! They must have run out of buying capability by now! Intention is to switch those approaching buffer zone into warrants with 2.5 years to expiry to avoid a margin call. Sounds all very well but what about time decay! if we drift for a period of time.:(
     
    redrover, 22nd Jan, 2008
    #100
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