Australia, Funds Management, Personal Finance - Written by on Sunday, April 1, 2012 14:34 - 0 Comments

Smart Investor: Earning It, April 2012

Smart Investor, April 2012

ROADTEST

Fidelity Japan Fund

Who runs the fund? Fidelity. One of the world’s largest fund managers, and probably the one most renowned for building in-depth expertise on the ground in the countries in which it invests. Portfolio manager is Nick Price.

The basics: Japanese equities. Aims to beat Japan’s TOPIX index over five years.

The process: Uses a concentrated, high conviction portfolio with a bottom-up stock selection approach – that is, looks for individual companies that are undervalued. Uses Fidelity’s Tokyo analysts. Top holding is GREE, a Japanese social networking service.

The bottom line: Numbers, in line with the market itself, look hideous: -11.56% a year over the last five years, on average. There’s not one single positive performance number from one month to five years, or even since inception in 1996. But more and more analysts are beginning to take a contrarian position and call for a rebound in Japanese stocks. It’s about time.

Fees: 1.15%

Verdict: Japanese stocks have traumatised investors for years now. But if you believe a long overdue rebound is on its way, this fund will catch it.

NEW FUND

Self Super Insurance

What is it?

Not a fund, but a method of insuring your self-managed super fund

Insuring it against what?

Costs of ATO audits, investigations and prosecutions, civil penalties, trustee disputes, loss of documents, excess contribution tax assessment notices, beneficiary disputes…

Hang on, why do I have to worry about all that?

Hopefully you never will, but the focus on compliance of trustees and SMSFs has never been greater than it is today. Additionally, with reforms washing through the whole superannuation industry, SMSFs included, that compliance burden is likely to get worse. There were over 11,000 ATO audits of funds in the 2011 financial year and 15,000 notices related to excess contributions.

In a sense, you could argue this product meets a commonplace need: that SMSF investors know exactly how to run their investments, but have no clue about their compliance and legal responsibilities.

What’s not covered?

Well, certainly not any losses your fund makes. There’s also the usual period of cover restrictions (such as an audit that commenced before you started cover), and any professional fees around the standard annual SMSF audit required by law.

Who is Self Super Insurance?

That’s the trading name of Consult Insurance Solutions, which is a new general insurance broker. Ultimately your coverage comes from QBE.

What does it cost?

Options start at $175 and are tax deductible, but increase according to the scope of the coverage you want. For example a fund founded in 2004 in NSW, with reasonably generous coverage limits, would cost $262.37, according to the site.

GIZMO

ZAGGfolio

We have previously featured case/keyboard combos that link to iPads and turn them into something approaching a laptop. We return to the theme because this one’s really good. Made of carbon fibre, it’s mighty strong; it has a built-in stand to hold the iPad2 in landscape or portrait orientation; and has a removable keyboard, with its own rechargeable battery, which links to the iPad via Bluetooth so you don’t have to have it physically connected to it. It even comes with some iPad 2 specific shortcut bottoms such as volume, home, cut and paste, and music playback.

One might ask whether turning an iPad into a laptop defeats the point of having an iPad in the first place. But for those who love their Apple gizmo but want to simultaneously protect it and link it with a keyboard, this is a good device.

www.zagg.com

FUND WATCH

Eley Griffiths Group Small Companies

It’s often said that small caps is one of the areas where good active managers can add the most value, and so it seems looking at this fund. It beats the benchmark convincingly over all timeframes from one to five years. That’s probably no consolation to investors who have held it for one year (heavily down) or five (flat), but that’s the nature of small caps: volatile and dramatically up or down. You don’t buy them for stability.

Sector splits look very different in small cap funds to large caps. Instead of banks hogging the fund, this one goes chiefly into basic materials, industrials and consumer cyclical. Top holdings are mining and services company Ausdrill, West Australian gold production and exploration company Regis Resources, and compliance services group SAI Global.



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