Managed Funds Value of holdings down

I admit I'm fairly new to the world of managed funds and was wondering if anyone else is a little concerned over the fallen value with their Navra holdings.

I only bought in recently and I'm sure it is just the state of the market, and is probably hitting most of the managed funds.

Suppose I'm just trying to gauge if this is a normal occurrance in todays market.

Hoping someone can put my mind at ease.

P.S. I should mention that my total holdings are down approx 5% since buying in. Not a lot I know and that may improve considerably in the next couple of days, who knows.

Just trying to get opinion/s from others

 

Hi Smartypants,

Isn't it great! I love it when the value of units drops in value - it provides a great opportunity to buy more at a lower price. Which is exactly what I'm doing. Doesn't mean that I put all my spare cash in, just some of it, in case it drops even further and I get to buy more at even lower prices.

Funds are a long term investment and should be treated accordingly. I can understand being new to shares that you feel a bit nervous, but daily fluctuations are not important - unless you want to buy more or need to sell for whatever reason.

Over the long term, the unit price will rise, so it's all good!

Mark

 

Smartypants,

If you bought before June 30 you were buying the proportional value of the underlying companies, plus a proportion of the trading profit. Post June 30 the trading profit was distributed and the unit prices dropped accordingly.

 

Hi Smarty

The drop in unit price is a drama is when you're keen to get the money back to invest in property, as I am now ( ), and looking at a bit of a capital loss. Mind you I quite enjoyed receiving last quarter's distribution

But judging by past performance, all other things being something like equal, they'll bounce back in the right direction.

I kind of look on the NI fund as something that should be micro-managed by the experts who run it, and I check the unit prices once a week or whenever I hear something scary on Lateline and even then only get * concerned * about the unit price when its approaching distribution time or I have found something else screaming for our cash

Cheers
Carl

 

Hi TryHard.

I hope your comment above is correct.

I bought into the fund for longterm payments (distributions) and was hoping to get some growth along the way.

The June distribution was my first and yes it was a great result but at the same time my position is that my holdings are approx in negative territory to the tune of what my distribution was. That is probably coincidental.

Remembering too that interest is still payable (and possibly tax).

As I mentioned in my previous post, it is probably due to market movement and hopefully things will turn around and the value of our holdings will grow.

It just seems ironic that at the moment my holdings are equivalent to initial investment less distribution.

 

Hi Smarty

Remember the PDS for the fund you've invested in suggest an investment timeframe of 5 years (not a few weeks).

I think if you search the forums here for the various discussions, you'll find everyone is in the NI fund for its benefits as an income fund, which offers the ability to lock in gains and get hold of the dollars every quarter, to 'feed the machine'. A nice side effect in the past has been some capital growth also, but of course that'll never be guaranteed.

Presumably, like me, you invested because you liked what you saw of the "Navra methods". You either need to trust in that and accept some risk, with the ability to cover interest payments if things don't go so well, or put your money in a term deposit and earn 5%, or put it in something else (weighing risk versus potential returns).

If its causing you heartburn I'd suggest sending an email to investor services to ask for a general comment on your concerns. They'll be limited to what they can tell you, but it might make you feel better. But you can download a history of the unit price movements from their site, which might help you feel a bit more confident (not that past performance is any guarantee of future ... yadda yadda )

Give it a bit more time mate. I'd be tempted to not look at unit prices for another couple of weeks - then come back and see how the value is doing. It might be no better, but the next couple of weeks will at least be more relaxing ;-)

Cheers
Carl

 

Navra funds

Smartypants,

I was also new to managed funds and I believe it takes about 3 to 4 distributions to get your head around managed funds, margin loans, falls after distributions, unit prices/percentages etc etc. I am happy with the amount I have in the funds and do not automatically re-invest any of the distribution. I take my lifestyle share for rent, I give some to my daughters (they are women - they have overheads) and the remainder I put back into the fund and meet the original distibution with a drawdown on equity from a property LOC. I feel pretty comfortable with what's happening and why wouldn't I after the last distribution. At first I was a bit concerned about the tax implications of receiving a income fund as opposed to a growth fund but you never go broke taking a profit and there is always Great Southern. If our friendly tax dept. puts a halt on afforestation investment there will be always something else. Hope this helps

Bob

 

Hi SP.

See Glebe's comment above.

If you bought in fairly recently, such as towards the end of June, a fall in the Unit Price of about the size of your Distribution is exactly what you would expect. They paid out the profits and this was reflected in the Unit Price.

Look at it another way. If you'd been in the Fund for a few weeks before the end of the Quarter and then received about 5% on your total investment for those few weeks, you did really well! It's not quite that good( ) but you do have to look at the time invested, the unit price paid and the distribution received when summing up how it's all going.

The Growth Component is certainly more of an issue for those capitalising the interest though as if the growth is not occurring then your margin ratio will start to creep up and you may need/want to top it up with some cash. This has been discussed elsewhere though.

Personally, I've used an assumption of about 3% longterm growth plus about 10% distributions and I suppose it would be fair to say that at this present point in time the growth is a bit less than that figure. Mind you, at other times in the Fund's history it has been more. Also, keep in mind, for the last 12 months, while the 'growth' has been less than my assumption, the distributions have been more.

If it's any consolation, some time ago, just after I purchased my Units the Market dropped about 6 or 7% from memory which meant my 'paper position' looked rather 'red' there for a few months..........and this was when I just started too! Looking back on that now, it was a 'blip on the radar' and much, much stronger market conditions followed. I know how you feel though.

Personally I'd like to see the Unit Price a bit higher at the moment too, but Carl's comment is right. A slightly longer term view is required and possibly don't check that Unit Price everyday in the first 6 to 12 months..........even if I do.

 

Smartypants

For what it's worth, I invested the bulk of my money into NI at the end of Dec 2004, at an application price of over $1.13. If I look at how my investment has performed over the last 18 months or so (up until last Friday), I am well ahead. This is despite the fact that all my investment is borrowed (either from my LOC or from a margin loan geared at 60% initially) and interest rates have increased 3 times in that period and despite the fact the actual value of my holdings is down (in fact I am sitting on a paper loss of over 40K). So hang in there and look longer term.

Despite all of this I can't help myself looking at the unit price everyday although I am now a lot less concerned when I see the price drop.

cheers
Gazza

 

Hi Gazza.

We should have a beer sometime and console each other about the portion of our portfolios we bought for more than $1.13.

Hang on........we can't afford to buy each other a beer based on the current Unit price.

Oh yes.........the Distributions should pay for a couple of cool ales.

My shout next time your in Sydney.......

 

Hi Alan

Sounds good, I'll let you know when next we're in Sydney and we can catch up.

I guess the important thing to do is focus on the distributions. Steve likes to make a comment during his talks about a client who complained to him about having to pay tax because the distributions were so good. I have a bit of a chuckle because it was my wife Steve has got a lot of mileage out of that, I should charge him for the good avertisement she is for the fund

cheers
Gazza

 

Ahhh.......that was Mrs Gazza?!

I agree. The shout should be on Steve.

Or at the very least between us we can pitch in and buy the lovely Mrs Gazza a Chardonnay.

 

Hi all.

Thanks everyone for your feedback.

Hope my comments did not come across as negative towards the fund, that was not my intention.

I definately bought in with a long term view, as I hope to be basically living from the distributions further on down the track.

Have also decided that I am going to use distributions plus make extra payments on my margin loan i.e any excess cash, to whittle down my loan.

Whilst it may not be 'the done thing' to eliminate loans, I hope to be in the position (later on) of receiving distributions to live on (and yes, pay tax on that ). By that stage, hopefully my I.P portfolio should be taking care of itself in regards to the loan situation, might even be a little bit positive.

Of course, this is my thinking for now, and may change in the future.

 

It didnt, so dont worry.
I have most of my managed funds in Navra - in both Oz and US. Disappointed by the US fund at the moment - however I think (hope) that it may turn around soon - if the Fed Reserve stops raising interest rates shortly and the US market starts to pick up. One can only hope - although then our $ will rise compared to the US $ and there goes the (hopeful) rise in the US fund unit price ....
I am looking at diversifying into other managed funds soon - might wait till November though as both markets in US and Oz are a bit jittery. My venture into the Platinum Asia fund has gone backwards 10% since late April - so going on that it may be a good time to buy there???? (counter-cyclical) . Don't take that as advice though !!!

 

Yeah don't worry about perceived negativity SmartyPants - I don't think anyone took it that way, and even if they did, you're entitled to your opinions and concerns.

I'm still pretty shirty that now, the time I need some cash for the builder, I'm trying to wait out the capital loss I'm currently facing, but that's just timing and fate ;-)

I for one believe NI is a good option for people who don't want to tread water and don't have the time to learn the sharemarket and all its stupid idiosyncracies backwards.

I'm annoyed about the current unit price, only 'cos of timing, but nowhere near as annoyed as when I bought direct shares and watched them nearly halve in value over 3 months (and the purchase was reasonably well-researched).

I think NavraInvest is kind of like a rollercoaster with all the major high bits taken out - it might still give you a fright from time to time, but its nowhere near as bad as the potential of a scary ride on the ASX-exterminator.

;-)

 

Performance of Retail and US Funds

Is it time to panic yet? I notice that we are almost halfway through the quarter and the performance is not looking so good. I was hoping to see some improvement by now.
Even though I have every faith in Steve and his company, I am still feeling a little uncomfortable with the current figures. In fact, this seems to me like the worst few weeks he's put in over the life of the Retail fund. What do you all think?

 

You can not win all the time. Nobody can.
So far DOW + XJO fail to break up certain levels, so prepare yourself for more up and down scenario.
Get use to it, because current market is more volatile at the moment and does not trend up as it did before.
As a matter of interest....current volatility is good for daytraders
I agree with Sim saying ".... if you can't cope with a single quarter with no distribution, then you haven't got yourself structured right and are leaving yourself too exposed".

 

jeddi

as they say - "do yourself a favour" and buy the current issue of the magazine "AFR SMART INVESTOR".

In it is a fold-out poster of the performance of the All Ordinaries from 1900 to 2006.

If you study it closely you will see that even though if you invested $100 in 1900 and continually re-invested your dividends until 2006 you would have $7,197,512 there are many years when the market went down.

EG. You would have less in 1975 then you had in about 1968.
7 years of re-investing and you still would have lost money if you sold up.

Might bring things back into perspective for you?

Hope this helps, it's the way I re-focus when things seem to be heading in the wrong direction. Which is nearly always just after you've invested in shares or funds

 

Which is nearly always just after you've invested in shares or funds".

Rick,

Heheheeee....Good one.
It reminds me of my first couple of trades I took in the past.