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Why is Navra so popular?

Discussion in 'Managed Funds & Index Funds' started by das_gute, 5th Jun, 2007.

  1. das_gute

    das_gute New Member

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    I'm new to investing in funds and looking thru these forum threads it seems to me that a lot of people are investing in Navra. I went to morningstar to see why this fund seems so popular and talked about.

    I'm quite confused because it's performance seems very below par:

    NavraInv-Navra Blue Chip Aust Share Wholesale Fund (NAV0002AU)

    Financial Year Total Returns
    03/04 04/05 05/06 YTD
    Fund 12.95 22.44 19.40 17.61

    +/- Index -8.66 -3.91 -4.53 -7.95

    Am I missing something here cause this fund is underperforming the index!!!

    Would appreciate any comment! Cheers.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Unlike most funds which are fundamentally buy-and-hold, the Navra fund generates income from actively trading shares as the rise and fall. As share prices rise, it sells, and as prices fall, it buys ... this counter-cyclical behaviour tends to even out the returns, meaning that it doesn't perform as well as some other funds in the good times, but it should (in theory) perform far better in the bad times. It's a fairly conservative fund which aims to produce regular income rather than great growth.

    If you are after great growth this is not the fund for you. If you are after regular income, this fund should serve well.

    You need to understand more about Steve Navra's optimised investment strategies to appreciate where this fund fits ... it was designed as a mechanism for allowing investors who have large cashflow-poor real estate portfolios ... it produces income to help pay for the real estate investments.
     
  3. Nigel Ward

    Nigel Ward Team InvestEd

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    Welcome on board das_gute.

    If you read through the Dollar Cost Trading and Living on Equity articles you'll get a better insight into how the NavraInvest income funds fit into the whole optimised investment structure.

    Cheers
    N.
     
  4. Glebe

    Glebe Well-Known Member

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    Another thing to bear in mind is that Steve Navra is a part owner of Invested (or something like that), and many of the forum contributers were Navrainvest unitholders and/or shareholders before Invested started.

    So you'll hear more about the Navra funds here than anywhere else. Just reading Invested might give you a false impression about it's popularity. In reality, at only $150m funds under management, it is still heavily in the "boutique" category.
     
  5. Nigel Ward

    Nigel Ward Team InvestEd

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    Ahem approx $208m... :D But you're right Glebe...still a minnow ... but aspiring to be a whale :p

    N.
     
  6. Glebe

    Glebe Well-Known Member

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    Watch out for the Japanese, Nigel!
     
  7. Nigel Ward

    Nigel Ward Team InvestEd

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    Ha I love it! :p

    Actually a friend of mine is on secondment in Tokyo and has been given a mission by me that she must eat a whale burger before returning to Australia...
     
  8. das_gute

    das_gute New Member

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    THx alot guys for all ur insights! These forums are absolutely awesome for a newbie investor :)
     
  9. MiddleClassMonkey

    MiddleClassMonkey Well-Known Member

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    So why is it that Morningstar only give only 1 star to all the Navra funds?

    I know these ratings aren't reliable, but I'm curious as to what the justification is. Insights/thoughts anyone?

    - MiddleClassMonkey
     
  10. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    This has actually been discussed quite a bit in recent threads - it's worth doing a quick search (perhaps search on "morningstar") to see what was said.