Time for action!

Hi Compleks,

Is that fund internally geared? That will magnify the returns in a bull market, but also potentially magnify any losses in a fall.

Cheers, Chris

 

Thanks guys.

I was having a browse through some of the best performing funds, and all the top funds seem to be geared. I understand that gearing would magnify returns and losses, but how does this effect historical returns as a percentage?

Do they calculate the returns from your initial investment, aswell as the geared investment and then calculate the percentage based solely on your own contributions?
Does this mean if the fund wasn't geared, the performance figures would be halved? Or would that depend on the amount of gearing?

Anyway, I'm thinking of probably investing in two funds at the moment. I would like one standard growth fund, and one geared fund.

Here are a few funds I have looked at. Any comments would be appreciated.

Non Geared:
Fund Profile
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Geared:
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I noticed there aren't many geared funds that have been operating much longer than 5 years, and the ones that have seem to drop off alot in the later years.

Do you think I'm looking in the right direction? Are these decent funds, or have I picked a bunch of duds?
These PDS's are killing me.

PS. What happens if you fail to pay the minimum monthly contribution?

 

I have been with CFS for some years and am pretty happy.

Navra is not a growth fund - it is an income fund.

Make your monthly contributions easily doable. If you have excess funds you can make one off contributions. I don't know the outcome if you miss one - won't be much as it isn't a loan repayment - just a savings contribution. A phonecall will answer that for you.

You must be one of the few people that read through the PDS of every company being considered. I would have shortlisted it to three before I faced up to the PDS

 

Looks like alot of those are smaller companies funds.

I would suggest you choose a blue chip fund, as I would expect smaller companies funds to be more volatile.

Prehaps you should choose something blue chip and place 75% of your money into it, and the other 25% have something more 'risky' like a smaller companies fund.

Me personally I love small companies funds, and 2 of my 6 funds are small companies funds.. So if your prepared to take a bigger risk, with the potential of better return, then go for it! But last think we would like to see is you get in, loose money and get scared off.

 

Haha, I haven't read them all.

I have just been reading (browsing really) through random PDS's trying to get a feel for the process.

Is there a particular CFS fund you prefer?

Is there anything to consider when selecting a fund that invests in international shares, as opposed to domestic?

 

Thanks.

Can I search specifically for funds which invest more in blue chip shares? I was having a hard time finding information on this without looking at every fund individually.

 

Find a Fund

 

and here are your blu-chip geared funds..

Find a Fund

 

Ah, okay. Thanks alot

I had a play with some of those settings, but didn't really understand all the different categories.

Thanks for the quick replies. You guys are awesome.

 

If you want a good Australian geared blu-chip share fund, the CFS Geared Australian share fund is very good.. over 7 years their average return is 20%+ which is very good.

The CFS 452 Geared and ungeared funds are also good..

If you want a good global property fund, the CFS Colliers geared and ungeared funds are very good..

But make your own decision in your choice!

Prehaps put in 75% into CFS Geared Australian Share and 20% into geared global Colliers fund and 5% into cash/fixed interest.

This could be a good start for you.

 

Hey Hey!

http://www.investsmart.com.au/education/documents/Morningstar_Category_Definitions_Dec_05.pdf

I was having a read through this PDF on the different sector/asset classes. It explains things reasonably well, but can anyone dumb it down a little?

In particular, what is the difference between growth and value assets (In laymans terms)?


Thanks.

 

Growth - low income but price of the asset is rising to compensate.

Value - high income but price of the asset is only slowly rising if at all.

 

I never quite understood this with managed funds.

How does a fund produce high income without good growth? What if the income was put back into the fund, wouldn't the growth be present?
Isn't this just determined by the frequency that dividends are payed out?

 

Oh, right. Thant makes sense.

Thanks Sim.

I've been looking through funds under the class, 'equity region Australia large value / growth'.
It seems as though all the best performing funds are relatively new, with historical performance usually only up to three years. I've only seen a couple of funds with five years and decent returns. All the funds I've seen that have up to seven years seem to be doing quite poorly in the later years.

Is this some sort of trend? Do most funds tend to drop in performance in the later (5th, 6th, 7th) years?
They seemed to be doing alright up to the 3rd-5th year in many cases, then dropped significantly.

Any thoughts on this? Am I just not looking properly?

Lastly, what does 'franked' or 'fully franked' mean? Usually in reference to dividends.

Cheers.

 

Have a look and see what the market was doing 7 years ago. I bet most funds were getting similar results.

 

Fair enough.

If you don't mind me asking, what sort of returns do you guys average from your managed funds?
I remember someone saying that on average, managed funds will return 11% pa. (I may not recall correctly). Looking through various funds on investsmart, 11% seems to be substantially below average. Or atleast well below what most of the funds listed seem to be returning.

Have I observed incorrectly, or is there a reason for that?