Managed Funds Why Navra Fund?

Discussion in 'Shares & Funds' started by evisional, 24th Aug, 2007.

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  1. evisional

    evisional Well-Known Member

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    Hi

    I wonder why most members here discuss about Nara Fund? Why do not we invest in high growth fund such as Macquarie Small Companies Small Trust?

    Thanks
     
    evisional, 24th Aug, 2007
    #1
  2. islandgirl__

    islandgirl__ Well-Known Member

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    Evisional, Most people here use Navra as part of there strategy to increase income to buy growth funds or other capital growth assets.
     
    islandgirl__, 24th Aug, 2007
    #2
  3. Simon Hampel

    Simon Hampel Founder Staff Member

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    A lot of people here do also invest in high growth funds as well.

    The interest in the Navra fund is twofold:

    First, the historical reasons. The founder of NavraInvest and Navra Financial Services (Steve Navra) was one of the original founders of this site (he is no longer involved in any capacity). As such, many of Steve's clients and fund investors came to this forum to discuss investing - and naturally this has lead to a lot of traffic from discussions of these funds.

    Secondly, the reason many people like the Navra funds is that they produce high levels of income, which is ideal for portfolios which have negative cashflow real estate costs - the fund helps pay the holding costs of those properties, allowing us to buy more growth assets !

    I certainly think that growth assets are the best way to build wealth - the income fund is just a tool that helps us get there (although is very good as an investment in its own right if you are looking for income - in my opinion!)
     
    Simon Hampel, 24th Aug, 2007
    #3
  4. evisional

    evisional Well-Known Member

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    Do you mean they use income for debt recycle i.e deposit to home loan and redraw for investment? Why do they have to use income? Can we invest in high growth managed funds, then we can use capital gain to reinvest in other capital growth assets?

    Thanks. I am just a newbie


    .............

    Blog » Investing Wealth Knowledge
     
    evisional, 27th Aug, 2007
    #4
  5. Gameboy

    Gameboy Member

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    With the new super taxation laws, I would’ve thought the Navra fund perfect for those people.
     
    Gameboy, 27th Aug, 2007
    #5
  6. tailcat

    tailcat Well-Known Member

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    Evisional,

    The bank looks for two things when giving the OK for an IP purchase: Equity (for deposit and costs) and income for servicability (to make the interest payments each month).

    If you buy your IPs on 7-8% interest, but only get 5% rent, then there is a shortfall. The rent doesn't cover the interest payments. The bank needs to see that you have the INCOME to cover the repayments. At first your salary will cover this deficit. But when you have 3-4 negatively geared properties your salary will eventually run out. However, the bank will take income from shares or managed funds into account when calculating your overall income. Hence the use of the Navra fund.

    Tailcat
     
    tailcat, 27th Aug, 2007
    #6
  7. MichaelW

    MichaelW Well-Known Member

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    Hi evisional,

    The banks like to see the regular distributions coming into your bank account. They then count it as part of your servicability calculation when borrowing to invest in those growth assets like properties. If you had a growth managed fund with minimal regular distributions then it wouldn't help your servicability equation with the bank.

    Not to mention that it actually DOES help your servicability. In my case I have $1.5M in borrowings and pay over $100K pa in interest on those loans. The income from my Navra managed fund helps cover that interest payment. Admittedly, half that interest is related to the borrowings against my Navra managed fund, but it distributed over $100K to me last year so covered all the interest on my IP loan as well! So the rent was just free cash after that.

    Hope that helps explain it a bit.

    Cheers and welcome!,
    Michael.

    EDIT: Tailcat must have beaten me by seconds! ;) But I'll leave the post as the second paragraph is still relevant.
     
    MichaelW, 27th Aug, 2007
    #7
  8. Cherry Pro

    Cherry Pro Active Member

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    Hi Michael

    Your strategy seems compelling.
    And has Navra returned a yield of 10% per year for the last how many years ?
    I have so much to learn.

    Thanks.
     
    Cherry Pro, 28th Aug, 2007
    #8
  9. 24724

    24724 Well-Known Member

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    Hi, Cherry Pro,
    For the past 4 years, (since I have invested in Navra), the fund has distributed an average of 15.63% per year.
    But whilst 10% annually is a figure that Navra themselves say is achievable, there is certainly no guarantee.
    Jayar
     
    24724, 28th Aug, 2007
    #9
  10. evisional

    evisional Well-Known Member

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    tailcat, MichaelWhyte, Jayar and Cherry Pro

    Thanks for your giving clear explaination. Now I understand the circumstances where the Navra Fund fits to. I have to learn more about Navra Fund and from you guys.

    Thanks once again!
     
    evisional, 28th Aug, 2007
    #10
  11. voigtstr

    voigtstr Well-Known Member

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    voigtstr, 28th Aug, 2007
    #11
  12. coopranos

    coopranos Well-Known Member

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    Just out of interest, in the 03/04 year where the fund returned 10.58%, was the fund running for that whole year?
    Any ideas as to the lower return that year?
     
    coopranos, 28th Aug, 2007
    #12
  13. Simon Hampel

    Simon Hampel Founder Staff Member

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    The fund commenced trading in May 2003, so it was operational the entire 2003/04 year.

    The main reason it would have had lower performance was that it was a small fund (low funds under management) - which limits the amount of trading they can do (similar problem faces the Navra US fund now - although that also has the double whammy of a rising AUD to cope with too).

    I don't have figures available to verify, but I also suspect that the markets were seeing quite low volatility at that point - and the fund would still have been finding its feet in regards to stock selection and weightings.
     
    Simon Hampel, 28th Aug, 2007
    #13
  14. evisional

    evisional Well-Known Member

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    I just checked the Navra fund performance. Distrubution is quite high - 18% for 1 year.
     
    evisional, 28th Aug, 2007
    #14
  15. 24724

    24724 Well-Known Member

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    Hi, evisional,

    Yeah, last year was a good one....the best so far, and boosted by the last quarter's result.

    Have a good look over the two Navra sites below....

    Navra Financial Services

    Welcome to NavraInvest Limited - Funds Management

    ....and if you get a chance to go to one of Steve's seminars, do so. I don't think you'll regret it. ;)

    Cheers

    Jayar
     
    24724, 29th Aug, 2007
    #15
  16. kevinb

    kevinb Active Member

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    That was still a pretty good return - that year my Super fund produced a whole 4%

    Rgds

    Kevinb
     
    kevinb, 29th Aug, 2007
    #16
  17. Lam Thieu

    Lam Thieu Well-Known Member

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    Hello all,

    These Navra Products sound pretty good, but the main one, Navra Blue Chip Australian Share Retail Fund only obtained a 1 STAR from Morningstar????...why's this so. If this is so good, surely the morningstar rating would be much higher....

    Fund Profile

    Are there no other better options around with just as good of returns and income stream?
     
    Lam Thieu, 19th Sep, 2007
    #17
  18. Simon Hampel

    Simon Hampel Founder Staff Member

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    The discussion about Morningstar ratings has been had several times before already.

    You need to understand what that rating means - it is largely a quantitative "peer" comparison rating, meaning that a low rating indicates performance less than its peers over the past 3-5 years (with peers being defined by Morningstar!!), rather than an absolute reference to the suitability of this fund for its designed purpose. There are over 700 funds listed in the Morningstar category that they have placed NavraInvest AUS funds into.

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

    I'm not saying that NavraInvest funds are any better or worse than the other funds in Morningstar's category, only that their approach is quite different - and a purely quantitative measurement of a funds performance like that done by Morningstar, does not really take into account the nature of the fund and how it might perform in a variety of market conditions.
     
    Simon Hampel, 19th Sep, 2007
    #18
  19. Nigel Ward

    Nigel Ward Well-Known Member

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    I was speaking to Steve recently and he mentioned that morningstar had in fact ranked them as the 8th best boutique fund...

    I haven't been able to locate the article, but I'll chase Steve to send it to me to link to here

    Cheers
    N
     
    Nigel Ward, 20th Sep, 2007
    #19
  20. Alan__

    Alan__ Well-Known Member

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    That would be great Nigel.

    As a Fund who obviously wants to increase FUM you'd think it would be beneficial with this type of information to:

    a) put it on their website
    b) include it in their Quarterly Updates
    c) send out in information updates to shareholders

    Oh well........their call.
     
    Alan__, 20th Sep, 2007
    #20
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