Actually 14.2% is the quoted return from the MQ Buy Write Fund.
It (the Buy Write Fund) has actually out performed our expectations producing 2.18% last month. And this is from a fund that has very low volatility - 5.52% in fact (share market averages 12% and property is about 8%). As volatility is a key indicator of risk I am sure you'll agree that while this fund is not traded for outright performance it is low risk.
It is the other two funds (that the powers that be required us to add to the Buy Write in MEEIF) that have inexplicably under performed. (I say inexplicably because the market is ripe for those funds to have performed well, so they are actually acting as a drag on the performance of the Buy Write).
Having said all that the actual performance of the fund to end of April is 8.33%
Annualised (which I am not supposed to do but bear with me) that would be 9.99%
Most people have fixed the interest at 7.75% - paid annually in advance, so they would still be in front 2.24%.
Now that doesn't sound like a lot but because there was no capital outlay (100% finance), and I have as I have no risk to capital (capital protection at the end date) I view my returns against the cost and that makes it a 28.9% return on cost (the interest).
So, while I would have liked it to perform better and I am delighted with the Buy Write component of it (which is what we wanted in the first place) I am happy for the first year (as there is also a considerably larger fee drag on the fund in year one).
We are looking at ways to enhance the performance of this fund for next year, but with the current performance of the Buy Write I am happy we have selected it as the centre piece of "our" new fund with Macquarie - the MQ Geared Equity Income Fund.
Disclaimer: While Peter Spann is an Authorised Representative of Freeman Fox Limited, the Holder of an Australian Financial Services License he makes this post as an individual and his views should be taken as that. The material in this article is of the nature of general information only and neither purports nor intends to be advice. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. Investments can rise and fall in value. The decision to invest and the method selected is a personal decision and involves an inherent level of risk. None of the information in this article constitutes, and must not be construed as, an offer of securities or other financial instruments. Nor is it an invitation to you to take up securities or other financial products. Nor is it a recommendation to deal in any securities or other financial products. Before making an investment decision on the basis of any information presented in this article the investor or prospective investor needs to consider, with or without the assistance of a Licensed Financial Adviser, whether the strategies are appropriate in the light of their particular investment needs, objectives and financial circumstances. Peter Spann, Freeman Fox Limited and their associates may hold investments in the assets presented and will be entitled to commissions on certain products. While every effort is made to ensure accuracy the laws and strategies relating to investing, financial services and taxation are constantly changing as does the factors that effect the likelihood of investing success for example, but not limited to, the economy, government policy, market sentiment, and time, therefore the writer does not warrant or guarantee the accuracy, voracity or timeliness of any of the information presented. Any examples presented are for illustration purposes only and previous results are no indication of future profits
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its been doing well for an income fund, for what its worth, I'm glad i hold the fund to assist in the shortfall with the - geared IP's
