JB Global - 100% LVR, 100% capital protected, ASX 200 fund, 4.5% interest

[House_Keeper]

You're assuming that, if the market rises 10% per year, your portfolio increases by 10% per year.

That's not what seems be to happening when you look at the final value of the units shown on page 15 of the PDS.

Do as you like, but be careful.

Cheers,

 

[DavidMc]

Of course there are those 5 risk management things that attempt to smooth our performance (the volatility thing, the averaging thing, etc) and the 10% performance fee.

Obviously I can't simply model those things, but what they 'take away' they seem to 'give back + a bit'. Overall they don't reduce the performance of the investment, they enhance it (apparently), but it does mean straight 10% growth won't equal 10% increase.

I can only assume they do enhance it as any reduction in performance reduces their fee. Most funds the advisors guys get paid no matter what but this one only when it performs (on top of the entry fee that is).

 

[DavidMc]

XJO% IRR
10 30.30%
11 35.70%
12 40.60%
13 45.20%
14 49.60%
15 52.70%
16 57.70%
17 61.40%
18 65.10%

And... looks like it's gotta do at least 5% to break even. That's what I'm betting on I suppose, do I think the ASX 200 will do better than a 5% average over the next 3 years.

I think it will.

 

[Hoffy]

The entry fee & performance is for the financial adviser (ie, salesperson) selling the product, not for the fund manager.

The fund manager will get paid not matter what, don't worry about them.

Otherwise they wouldn't have created the product.

Cheers,

I haven't read the PDS, but I would be very surprised if the performance fee was going to the adviser. The entry fee would be, as is usually the case, but typically performance fees are an additional fee collected by the fund manager on top of the standard MER.

 

[DavidMc]

Advisor gets performance fee + entry fee. Lender gets interest.

No MER.

 

[DavidMc]

Another question - would it be simplest to invest in this just in my own name? I'm a high tax bracket, no kids or wife. I do have a HDT for property though.

 

[DavidMc]

I'm thinking I'll just do this in my own name as it's only a 3 year thing.

 

[emu]

Hi David

It appears our investing paths cross yet again, if i remember we last talked about our withdrawl from using wakelin to source an IP.

I sent off the paperwork for this investment this morning, only taking 100,000 units for 15k.
I am looking at buying into similar products each yr for the next 5-6 yrs with the intension (if the shares perform) of taking over the shares with a margin loan at the end of the term.

It's a lazy way of investing in shares but it suits me at this time, i'm 43 and 85% of my assets are in property so it's time to start diversifying.

Have you noticed that there is a supplementry PDS out for this investment, i contacted jb global and invited the advisor out to lunch at a later date (their shout), after all it's an easy 2k he made off me

Cheers
Ken

 

[DavidMc]

Hi emu,

Good to hear from you again.

Did you pay the 2.2% fee? i.e. 100,000 units at a 15.7k cost?

I'm looking at a 11k fee - just tried to get them down on it today but no dice.

David.

 

[Bill.L]

Hi all,

David, if your are going to spend $157,000, why not just buy call options on the SPI with the money instead??

You're buying the index in the future and cutting out the suits. You could also just buy the future dated call options on each of the top 10-20 companies for that sort of money. Have you considered/looked at these types of alternatives to do the same thing??

bye

PS I would not do either, the stockmarket and it's myriad of 'specialized investment options' is often a poor choice. Either learn how to trade or stay the hell away from the market.

 

[DavidMc]

Hi Bill. No I haven't.

So it's possible to get 100% LVR with this type of money? (or the same effect?). (Note I am inputting $78k to control $500k worth of XJO for 3 years. The 78k is = 3 years of interest at 4.5%).

I've spent a lot of time looking at active vs passive investment and have decided that passive is for me. I don't want to be there clicking refresh on Commbank like half the guys in my office do. I just want to set and forget.

 

[emu]

Hi david

Yes i had to pay the 2.2% fee but i may get a lunch out of it.

Cheers

 

[Bill.L]

Hi David,

So it's possible to get 100% LVR with this type of money? (or the same effect?)

Options are a leveraged investment(gamble), so are futures contracts. What you're planning to do is very similar; betting $78k that the market will be above 5325 in 3 years time AND that the provider of your bet will still be in business.

I just want to set and forget.

This is the huge hole in any investment. What makes you think that this approach in a negative sum game can make money?? I refer you back to what I earlier stated.....

I would not do either, the stockmarket and it's myriad of 'specialized investment options' is often a poor choice. Either learn how to trade or stay the hell away from the market.

bye

 

[DavidMc]

Have you learned how to trade or do you not participate in the stockmaket?

 

[DavidMc]

Anyway just posted in the application. Let's check this thread in another 3 years.

Maybe I'll fall flat on my face, but who dares wins.

 

[Humphrey]

David,
Just wanted to clarify what level of growth in the ASX 200 is needed over the 3 years to break-even? i.e. to get the 15% back?

Thanks
EC

 

[DavidMc]

Just over 5%. See the graph 1 page back.

 

[redwing]

*BUMP*

How did you go

 

[DavidMc]

I went ahead with it. Time now for me to forget about this and check again later.

 

[Casserole Dish]

I liked the look of too David, just don't have any spare money to get into it

Wishing you the best of it David. All going well, I'll be one of the first to pat you on the back in 3 years.