Peter Spann 1 Day Investor Update

[kph]

Sorry, I meant Equinox Asia - as mentioned by the Macquarie fella at the 1 day investor update in Sydney last week...

SO how does it work?
Are you paying 12 months interest up front ?
What interest rate?
Do you get in direct via Macquarie ( prospectus) or via a planner ?
Is interest due up front 12 monthly in subsequent years or can you then pay monthly ?
Are you banking on 5% nett return after all your costs ?

Very interesting stuff.

kp

 

[Andrew_A]

Firstly Richard who? (no need to reply I am sure he is a guru but I ain't heard of 'im)

Secondly, while I would agree with Richard on his sentiment if ALL structured products were "boring vehicles", and I am sure many are, it still depends entirely on the research that you would do to ensure that the underlying investment was actually exciting and likely to perform and like all investments we recommend to our clients that's exactly what we do.

www.farleigh.com is Richard Farleigh's website and I can also suggest his recent book 'Taming the Lion' as a good read for investors.

I was simply passing on Richard's view from this book about a capital guaranteed investment he was offered. A 'boring' vehicle might be just a fixed interest term deposit or something similarly 'safe' whilst the remainder of the capital could be put to higher risk use in an attempt to generate performance. Hence his idea was it could be a great idea for the promoters of the guarantee first of all as they need not have any risk in making such a 'capital guaranteed' promise.

Of course research of specific products would override a general comment such as this.

 

[The Y-man]

Sorry, I meant Equinox Asia - as mentioned by the Macquarie fella at the 1 day investor update in Sydney last week...

Just been to the update - now I understand what you were trying to say.
The Equinox Asia fund is up an equivalent of 20% annulaised - Peter did stress to be careful of such figures (his actual statement was something along the lines of "Yes, and I'm Bradd Pitt based on my last 7 seconds of performance..." )

Cheers,

The Y-man

 

[GlennM]

Clarification from Peter's Seminar

Went to the Melbourne seminar and it was good value for money.....thanks Peter.

One thing that was stated that I didn't really understand 100% was in regards to paying off your PPOR (your own place). Peter said in the seminar that it was silly to pay off your own place. It seemed to be implied (no mention of renting was made) that it would be preferable to live in your own place and pay interest only and transferring the extra funds into investments.
So question...is it possible to live in your own place and pay interest only? Would any banks let you do this, as they normally like to see principal being paid as well? If so, which banks?

Hopefully someone can clarify.

GlennM.

 

[MJK]

I believe if you set your home loan up as a Line of credit LOC they will only deduct interest (monthly). The example I am familiar with is the ST. George Portfolio loan. You may have to for go your Honeymoon interest deals though.

MJK

 

[The Y-man]

SO how does it work?
Are you paying 12 months interest up front ?
What interest rate?
Do you get in direct via Macquarie ( prospectus) or via a planner ?
Is interest due up front 12 monthly in subsequent years or can you then pay monthly ?
Are you banking on 5% nett return after all your costs ?

Very interesting stuff.

kp

Yes, there is an option to pay the interest 12 months ahead.
Interest rate varies on the product / arrears etc but around 8% mark (i.e. you can choose to pay annually for the following 12 month for the 8.5 year life of the product)

Prospectus can be got thru Freeman Fox (see www.freemanfox.com.au)

Seen similar funds do 12-15% pa (with all caveats attached!!) so 5% net seems plausible.

Might not sound like much, but that's 5% return on 8.5% invested (as it can be 100% geared) - so the return is something more like 60% pa ...... and that's before tax benefits (which might make it 80-90% pa ).

Cheers,

The Y-man

p.s. the above is my understanding only - if you are interested, seek some serious advice from those qualified to do so......

 

[FrankGrimes]

This 100% gearing sounds great, so basically your capital is protected and the worse you could lose is the interest paid? (if the fund doesn't perform that is) and I could also bring the interest deductions into this financial year!

I really want to go to the Sydney seminar but had something else on the day. Good information on the thread so far!

 

[The Y-man]

This 100% gearing sounds great, so basically your capital is protected and the worse you could lose is the interest paid?

As far as I understand - yes. However, it is interest X 8.5 years that you will risk to lose (as the capital protection date is set 8.5 years from now).

The fund can be redeemed at any time before the 8.5 years maturity (although Macq require up to 90 days to fully redeeem), but if the funds are BELOW the initial invested value, you will need to make up the shortfall (which is not the case if you take it maturity as stated above).

Also, redemption prior to year 4 carries an exit fee of around 1% (??? check pds)

Cheers,

The Y-man

 

[handyandy]

SO how does it work?
Are you paying 12 months interest up front ?
What interest rate?
Do you get in direct via Macquarie ( prospectus) or via a planner ?
Is interest due up front 12 monthly in subsequent years or can you then pay monthly ?
Are you banking on 5% nett return after all your costs ?

Very interesting stuff.

kp

Yes we are paying 12 month interest up front

The interest rate we are paying is 6.95% as per the confirmation

"For clients who selected the “Annual in advance option” the first payment will be for 7 months only at an annual interest rate of 6.95% per annum (indicative) · For clients who selected the “Quarterly in advance option” the first payment will be for 4 months at an annual interest rate of 7.15% per annum (indicative)"

Via Freeman Fox, I am not in one of their clubs but they didn't trun away my money .

We will continue to pay the annual up front payment . Not sure whether this is optional but as soon as income matches shouldn't be a problem.

Based on their predictions and an interest rate just below 7% then yes it should be 5% net before tax. (can't forget your silent partner)

The performance thus far is as per link, last column but stil early days.

http://personal.macquarie.com.au/pe...investments/newton/historical_performance.htm


Cheers

 

[geoffw]

As far as I understand - yes. However, it is interest X 8.5 years that you will risk to lose (as the capital protection date is set 8.5 years from now).

And the capital is in today's dollwars. However, there is a "ratchet" clause- the capital lock in can be raised at any time, but not lowered.

 

[FrankGrimes]

As far as I understand - yes. However, it is interest X 8.5 years that you will risk to lose (as the capital protection date is set 8.5 years from now).

The fund can be redeemed at any time before the 8.5 years maturity (although Macq require up to 90 days to fully redeeem), but if the funds are BELOW the initial invested value, you will need to make up the shortfall (which is not the case if you take it maturity as stated above).

Also, redemption prior to year 4 carries an exit fee of around 1% (??? check pds)

Cheers,

The Y-man

Yeah just had a read over it all. Seems reasonable I guess, can't expect them to protect your capitial over a short period of time.

 

[The Y-man]

"ratchet" clause.

I remember Dolf De Roos saying on one of his tapes saying, "ratchet clause" (in Kiwi accent of course) then adding, "that's spelt R-A-T-C-H-E-T"

Cheers,

The Y-man

 

[kph]

Thanks for the info Yman & handyandy.
From reading the pds they are quoting 7.5%
Where are you getting the lower rate from?
And a final query.
Do they register this loan on your CRAA file ? It might have implications for further borrowings for other investments if this is the case.

kp

 

[The Y-man]

Thanks for the info Yman & handyandy.
From reading the pds they are quoting 7.5%
Where are you getting the lower rate from?
And a final query.
Do they register this loan on your CRAA file ? It might have implications for further borrowings for other investments if this is the case.

kp

Sorry, I think confusion arises from 2 different products being discussed on thread:

I was referring to Equinox 6 / Equinox Asia / Equinox Asia 2

Handy Andy referring to Macquarie Newton Fund

Newton had an exceptionally low interest.

Not sure re CRAA.....

Cheers,

The Y-man

 

[handyandy]

Hi

Y-man is right I am refering to the Newton product.

It does register on your CRAA as a $1 loan. Mine was somewhat more than that.

Rolf may be able to comment as to the impact as I forwarded my info to him recently.

Cheers

 

[kph]

Why only a $1 loan ???? on the CRAA ??
WOuld love some feedback on this...


RRROOOOOLLLLFFFFFFFFF !!!!! where r u ????

kp

 

[Glebe]

Hi can you guys help me with something. I've read through the Macquarie Newton PDS but it mentions nothing of capital protection or 100% gearing. Is this second part something only offered by Freeman Fox? If so can someone provide me a link to the PDS. Thanks!

 

[The Y-man]

Hi can you guys help me with something. I've read through the Macquarie Newton PDS but it mentions nothing of capital protection or 100% gearing. Is this second part something only offered by Freeman Fox? If so can someone provide me a link to the PDS. Thanks!

Ok, now we're confusing more people

When we said "Macquarie Newton" fund above, we actually meant "Macquarie Newton MultiStrategy Capital Protected Fund Series 1" - which was available for an extremely brief window closing in 8th December later year. I believe quite a few people missed out on getting in.

It was quite literally one of those speed reading exercise of the pdf, fill in, and priority post jobs, as the pdf's were not available until very close to the closing date (due to some publishing hiccups?)

Cheers,

The Y-man

 

[Glebe]

Bummer. Thanks anyway!

 

[redwing]

Went to the Melbourne seminar and it was good value for money.....thanks Peter.

One thing that was stated that I didn't really understand 100% was in regards to paying off your PPOR (your own place). Peter said in the seminar that it was silly to pay off your own place. It seemed to be implied (no mention of renting was made) that it would be preferable to live in your own place and pay interest only and transferring the extra funds into investments.
So question...is it possible to live in your own place and pay interest only? Would any banks let you do this, as they normally like to see principal being paid as well? If so, which banks?

Hopefully someone can clarify.

GlennM.

From Memory Doesn't Peter Live in (rent) a Property owned by a company that he has an Interest in or some such Strategy (along the lines of own nothing control everything) ?

REDWING