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Why does everyone here rave about the Navra Fund?

Discussion in 'Managed Funds & Index Funds' started by Young Gun, 5th Jun, 2008.

  1. Young Gun

    Young Gun Guest

    I've been looking around at lots of posts and the Navra fund keeps coming up . I know they're a sponsor of this site, but I've looked into the fund and I can't see why people keep raving about it or suggesting it as an investment.

    -The performance isn't great when compared to other funds.

    -Yes it pays a high distribution, but so does every other Australian Share fund. And a high distribution isn't a tax effective way to build your wealth either.

    -the NavTraDE system is a technical analysis approach, which buys and sells on theories and trends not facts or prospective company profitability.

    - It has low FUM, which would equate to high operating costs, when compared to the scale of the bigger fund managers.


    what am I missing? why choose this fund over other investments? it's not unique, it's not low cost and it hasn't shot the lights out with it's performance either.

    Its not my plan to talk down this investment but if there's something I'm missing please tell me because I like a good investment when I see one, and I'd throw a few $'000 its way if it was worth it.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    You kind of need to understand a lot of the history and the context to "get" the purpose of this fund and why it is discussed so much here (or at least was in the past).

    In brief - the fund was specifically designed to be part of a structured portfolio involving real estate for growth and trading shares for income. On its own, you are right - it isn't that tax effective, but when used to help cover the costs of a negatively geared property portfolio, the tax side of things is not really an issue.

    The trading system is designed to thrive on volatility, and we've only just returned back to a volatile market after an extended period of historically low volatility (ie the market basically went straight up).

    The fund doesn't do technical analysis as such - that implies prediction. It is purely reactionary - reacting to moves in the market (although I guess one may argue that this is what some technical analysts do anyway). There is a lot of fundamental analysis of which stocks to hold (and safely trade).

    At over $250 FUM (before the recent downturn), this is pretty reasonably sized for a boutique fund, and NI was reported in the press as one of the fastest growing boutique fund managers in Australia at one point.

    It has underperformed many Australian funds during the strong bull market we've seen in recent years - but should (in theory) perform much more competitively in a more volatile market. We'll see.

    As for it's popularity here - that is mostly from historical reasons.

    Steve Navra was one of the five original founders of this site. Many of his financial planning clients and investors became members of the site - hence we had a disproportionately large representation of people who had invested in this fund. In fact, the original model for the site was paid membership, and we did a deal allowing Steve's clients free access for the first 12 months - so to start with, nearly everyone on the site was one of Steve's clients.

    Steve resigned as a director of the site over 12 months ago to focus on his other businesses, and is no longer involved in the site.

    Since then, InvestEd has added nearly 4,000 new members (yes, the site is almost 5 times larger than it was 12 months ago !!), most of whom I believe are not investors in Navra - and so the discussion on the site has become much more diverse and interesting in my opinion - which is a good thing for everyone. Naturally there are still a lot of people here who are clients of Steve's, and so the fund gets quite a bit of coverage still.

    Back to the fund itself - my father-in-law is a self-funded retiree (semi-retired actually - he still works part time), and he loves the fund for the income it generates (I didn't tell him to invest in it - that was his own decision and he is a conservative and cautious investor). You can't lose income once you have it in your hand (at least after the taxman has taken his bit), and so is a nice way of supplementing other income sources - especially if you take a long term view and can cope with a bit of movement in the value of your capital.
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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  4. Tropo

    Tropo Well-Known Member

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    "The fund doesn't do technical analysis as such - that implies prediction. It is purely reactionary - reacting to moves in the market (although I guess one may argue that this is what some technical analysts do anyway)".


    Basicaly........ "Oftentimes, technical analysis is referred to as some sort of black magic used to time the market.
    However, what many outside of the financial world don't realize is that traders don't try to predict the future.
    Instead, they create strategies that have a high probability of succeeding - situations where a trend or market movement can be anticipated
    :cool:

    More is here.......Anticipation Vs. Prediction
     
  5. Young Gun

    Young Gun Guest

    ahh so its a good news / bad news fund. I could see it as part of a well deversified portfolio, but until it gets on the investment menu of a bigger platform I'll have to give it a miss. I've got enough paperwork coming in from different sources as it is :)
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    The fund has only just passed the 5 year mark last month, so it should start to gain wider acceptance now that it has a track record.
     
  7. eddyl

    eddyl Well-Known Member

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    I've always had a similar perception young gun. If you don't mind me asking, which funds do you currently hold and why?
     
  8. Young Gun

    Young Gun Guest

    amongst other things I have a mixed bag of MFs of which I instalment gear into each month, I like to use the term "well diversified".

    Its all with CFS and i have from memory about 10-12 different funds which I think include the geared Australian SF, geared boutique fund, Global infrastructure fund, perp. ind fund, a Small caps fund, some Aust & Int property funds, a hedged International fund and the global resources fund.
     
  9. eddyl

    eddyl Well-Known Member

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    CFS has relatively high MER does this bother you? or do you think their performance services warrant this?

    Cheers,
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'm not sure how YG invests - but you can get into CFS wholesale funds for only $100K - and you don't even have to invest that all in one fund (you could have $20K invested across 5 different funds).

    The MER for the wholesale funds is quite a bit lower.
     
  11. eddyl

    eddyl Well-Known Member

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    Cheers thanks sim
     
  12. bennymarsh

    bennymarsh Well-Known Member

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    Good question Young gun, it had been nagging me as well for all the same reason!

    I see Sims point too, good if your after income, not so good if your after growth!
     
  13. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    bennymarsh,

    That's the point. It's designed to produce an income to help people hold negatively geared growth assets. In my personal experience, it's been quite good for me - I've been able to pay off my non-deductible debt much faster because of it.

    The validity of a product should be determined based on it's intended use.

    Mark

    Disclaimer: I work for Navra Financial Services, so some people may see this as a biased view.