Australian (ASX) Stock Market Forum

Managed fund co-operation group

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k.smith said:
I guess for people who trade in shares and have the knowledge of the correct forms to fill out at their fingertips, this may very well be "easy peasy".. don't know about the correct "asset declaration" forms..
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People who trade in shares are no different than those who stick their money in deposits, we're just a bit more proactive, even at my age of 84. There are no "correct" reporting forms. You simply tell 'em in writing or over the phone.

don't have that back-up family to lean on..
that is what I am talking about.. for those people it is not so easy peasy...
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If those folks can't communicate by phone, have no family assistance, and can't walk to the post box then they should be in a different sort of accommodation.

Anyway, I don't want to do battle with you over elder-care. That's pointless.

I wish you and your Mother well.
 
demodocus said:
If those folks can't communicate by phone, have no family assistance, and can't walk to the post box then they should be in a different sort of accommodation.
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Well 'demodocus', it sounds like you've got your life together and I'm impressed by your self-reliance and obvious keen knowledge of language.

However, we don't live in a perfect world, and what some of us find easy, others find downright oppressive.

Further I think people like 'Mr. Smith' feel a double oppression, one being the oppression brought on by the decimation of their own investments, the other by the oppression brought on by the decimation of an elderly parent's investments.

In ordinary circumstances one is mostly able to deal with one's own problems, but to load on those of a parent's, then it could very well be the 'straw that breaks the camel's back'.

These are very stressful times for many people, and sometimes emotion can override logic.

I'm pleased to see that you've got a balanced portfolio, but most of the folk who invested in City Pacific and the MFS PIF invested a great deal of their savings, and as consequence, at this time, have lost the whole of their income from those savings.

So, obfuscate logic with emotion, couple that with a loss of income, add to that the loss of income of a parent, and therein lies a lot of problems for a lot of folk - even without the addition of the loss of income by a parent.

I appreciate your postings on this thread.
 
simgrund said:
That is exactly why I am pushing for a proposal for a distinct "retiree only" financial product sitting just above bank deposit category but giving a more dignified return to this underprivileged class of investors. A category with "bullet proof" protective legislation behind it.
How about it?
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Simgrund,

Thank you for your constructive contribution.
This article is worth reading...
http://www.smh.com.au/business/prop...about-the-liquidity-crunch-20091203-k8sa.html

"......Many unlisted property funds in Australia are overgeared, in breach of loan covenants and unable to raise money to sort themselves out. Some are selling properties, but this is not enough to bring gearing down. And there is no sign of them being able to lift redemption freezes to return liquidity to the system.

Listed property trusts were able to go to the market and raise $16 billion in fresh equity to reduce their gearing, but the unlisted trusts have not been so lucky......"

"....There is an estimated $68 billion wholesale unlisted property market, with industry funds putting an average of 28 per cent of their assets in unlisted assets and retail master trusts having 9 per cent. With more than $1 trillion of retirement savings sitting in super funds, billions of dollars of our retirement savings are exposed to these unlisted funds.

In most cases, valuations are still overinflated, debt levels are higher than their listed counterparts, accounts are opaque and liquidity issues could become a nasty reality for smaller funds that face debt-refinancing issues at the same time as redemptions from clients......"

Seems to me that there are a lot of people who will be affected by the illiquidity in the unlisted property market.
What you are suggesting could have a lot of merit.
 
k.smith said:
Simgrund,
"............There is an estimated $68 billion wholesale unlisted property market, with industry funds putting an average of 28 per cent of their assets in unlisted assets and retail master trusts having 9 per cent. With more than $1 trillion of retirement savings sitting in super funds, billions of dollars of our retirement savings are exposed to these unlisted funds................
What you are suggesting could have a lot of merit.
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Hello k.smith,

One trllion of a potential avalanche into a black hole??? That is scary. What is a really urgent need now, most would agree, is to insulate the "for retirement only" class of funds from the speculative operations of various markets.
When the Federal Government will finally get around completing the REFORM of the Superannuation, they may legislate for creating a pool of funds with specific designation "for retirement only".
This would protect would be retirees from any impulses to seek higher returns and so on. This category would carry solid Government's guarantee of deposits not unlike recently provided to the banks during GFC. We all remember with fondness some state super schemes paying out pensions for the ex contributors. This commitment continues despite liquidity problems. That's why these schemes were closed, most more than a decade.
This proposal is not for the "resurrection" of these schemes as there would be no "contributions" scheme into which to pool future payouts.
A straightforward product with better than today's protective legislation to eliminate even the smallest chance of malintent.
It would carry protective legislation, give no choice of risks and carry usual annuity structures along the lines of Colonial Mutual's allocated pension and the like.
I believe such a product would be attractive to people who otherwise keep their funds in term deposits as well as those "testing the waters" of thousands of investment options.
I would like one day to sit down and perhaps with people like mellifuous sketch an outline of a proposal. As you know, no harm in trying.
Mellifuous recently sent a letter to Mr. Bowen with some proposals for protection of investors.
No doubt, a reply will be forthcoming; or not.
But some things came off our collective minds.
regards, simgrund
 
prawn_86 said:
Managed funds are not listed companies, therefore there is no reason they should be opened up to their unit holders. If your going to try (unsuccessfully) to impose that, it means that to be fair every other company/business etc would be legally required to have one also...

When you invest in a managed fund you are putting your trust into those fund managers, and you should have done your research before hand. You are not buying a peice of the company, you are simply giving them your money to try and increase its value.

If you want the security and transperancy of a listed company buy an LIC like ARG or AFI.
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Technically correct prawn_86 but you overlook these unethical enterprises modus op. They rely on our lack of detailed knowledge and then dress up these fringe products with credibility to trap us. They profit by preying on confusion. By pushing the limits of the law. Well, that led to losses of billions. Time to push back. Don't blame us or the regulators. Blame the unscrupulous lawyers who push push push to please their paying clients.

Look at PIN. It's listed. On the NSX. NSX and ASX listings are not the same you say. Why not? NSX
has cred. It was launched by Joe Hockey. NSX has an MOU with ASIC. What? Am I expected to go away and study the differences between the NSX and ASX? Why would I? It has the Commonwealth stamp of approval on it. Twice.

But when you look closely at PIN you see that you're not buying shares in a company, you're buying units in a trust. A trap for beginners. Even if the beginners spotted that difference, would they know that a unit trust is a far more opaque operation than a company? You obviously do. I do now; after my financial adviser steered me into PIF. But what about e.g. the farmer who studies years at uni and puts in 70hr weeks to put food on all our tables. What level of financial literacy do you expect from them on top of what they already do to contribute to your quality of life? The answer is - too much.
 
Duped said:
Technically correct prawn_86 but you overlook these unethical enterprises modus op. They rely on our lack of detailed knowledge and then dress up these fringe products with credibility to trap us. They profit by preying on confusion. By pushing the limits of the law. Well, that led to losses of billions. Time to push back. Don't blame us or the regulators. Blame the unscrupulous lawyers who push push push to please their paying clients.

Look at PIN. It's listed. On the NSX. NSX and ASX listings are not the same you say. Why not? NSX
has cred. It was launched by Joe Hockey. NSX has an MOU with ASIC. What? Am I expected to go away and study the differences between the NSX and ASX? Why would I? It has the Commonwealth stamp of approval on it. Twice.

But when you look closely at PIN you see that you're not buying shares in a company, you're buying units in a trust. A trap for beginners. Even if the beginners spotted that difference, would they know that a unit trust is a far more opaque operation than a company? You obviously do. I do now; after my financial adviser steered me into PIF. But what about e.g. the farmer who studies years at uni and puts in 70hr weeks to put food on all our tables. What level of financial literacy do you expect from them on top of what they already do to contribute to your quality of life? The answer is - too much.
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Well said Duped....

I would add that fund managers have their entourage of lawyers and legal advisors, often paid for from our fund(s).
I imagine that each publication that comes from these funds is so carefully constructed by "the legal team", that the "beginner" would need to get a law degree to have the "financial literacy" to form a true opinion.
 
k.smith said:
Well said Duped....

I would add that fund managers have their entourage of lawyers and legal advisors, often paid for from our fund(s).
I imagine that each publication that comes from these funds is so carefully constructed by "the legal team", that the "beginner" would need to get a law degree to have the "financial literacy" to form a true opinion.
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Too true. Actually its far worse than that. Even my financial advisor finally admitted he doesn't really understand the nuances of the trust constitution. Which is probably why they rely on ratings agencies. That's a FINANCIAL ADVISOR admitting that prawn_86. A FINANCIAL ADVISOR.

IMO if you think that's OK; you're suffering from chronic ethics creep. Oh and I've got some CDO's for you to buy. Don't worry if you don't understand the text of the contracts - all you need to know is that they're AAA rated. Sound familiar?
 
Duped said:
Too true. Actually its far worse than that. Even my financial advisor finally admitted he doesn't really understand the nuances of the trust constitution. Which is probably why they rely on ratings agencies. That's a FINANCIAL ADVISOR admitting that prawn_86. A FINANCIAL ADVISOR.

IMO if you think that's OK; you're suffering from chronic ethics creep. Oh and I've got some CDO's for you to buy. Don't worry if you don't understand the text of the contracts - all you need to know is that they're AAA rated. Sound familiar?
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An oldie but a goodie:-

"... In a move that highlights the difficulty of regulating ratings agencies, Standard & Poor’s has joined Moody’s in withdrawing its application to supply ratings of corporate bonds and other debt-based securities to retail investors in Australia, after new rules were announced this month by the Australian Securities and Investments Commission.

The rules, which will take effect Jan. 1, are intended to improve the management of risk and conflicts of interest at the ratings agencies, as well as increase transparency. But a clause that requires them to resolve disputes with retail investors through a financial ombudsman is one reason S.&P. is citing for withdrawing from the market, where it is among the three major agencies, alongside Moody’s and Fitch.

“Because the local ombudsman would effectively be second-guessing S.&P.’s analysts, we believe this would ultimately create investor confusion and harm financial markets,” John Bailey, managing director of S.&P. in Australia and New Zealand, said in a statement Wednesday. ..."

http://dealbook.blogs.nytimes.com/2009/11/19/sp-joins-moodys-to-scale-back-australia-ratings/
 
mellifuous said:
"... we believe this would ultimately create investor confusion and harm financial markets,” John Bailey, managing director of S.&P. in Australia and New Zealand, said in a statement Wednesday. ..."
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Ha ha. What a classic. So S&P are effectively saying that a second opinion would "create investor confusion and harm financial markets". What a load of spin. That just demonstrates a lack of professionalism. What about peer review? Anyone know of another 'profession' that conducts itself in this manner?

And these are probably the worst of the individuals who are sitting back tutt tutting about the integrity of climate scientists.

Totally ethically bereft. They don't even understand what being ethical means.

So this is some sort of mexican standoff with the Fed Govt is it?
 
Duped said:
Ha ha. What a classic. So S&P are effectively saying that a second opinion would "create investor confusion and harm financial markets". What a load of spin. That just demonstrates a lack of professionalism. What about peer review? Anyone know of another 'profession' that conducts itself in this manner?

And these are probably the worst of the individuals who are sitting back tutt tutting about the integrity of climate scientists.

Totally ethically bereft. They don't even understand what being ethical means.

So this is some sort of mexican standoff with the Fed Govt is it?
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I don't know - but when I think of how many good folks lost their money relying on ratings agencies, then I would say, 'good night and good luck' to those same agencies.

'AAA' rated toilet paper was the best we got.

soft and reassuring, and then; gurgle, gurgle gurgle: straight down the toilet.
 
Duped said:
They rely on our lack of detailed knowledge and then dress up these fringe products with credibility to trap us.
Click to expand...

Perhaps we oldies could look for a berth somewhere in the Future Fund. Pay them a lump sum in return for an annuity or pension. We'd get the same return as the Public Servants, pretty good oversight, and minimal costs.
 
demodocus said:
Perhaps we oldies could look for a berth somewhere in the Future Fund. Pay them a lump sum in return for an annuity or pension. We'd get the same return as the Public Servants, pretty good oversight, and minimal costs.
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Exactly as per post 124 above and others before it.
Not a "Future Fund", but a separate product for "OLDIES".
Perhaps we could start work on its proposal next year???
Merry Christmas to all!!!
 
I've been searching about the place for information on Astarra Funds Management and its related entities and was surprised the firm is now under investigation.

Is this a surprise to anyone?

Does anyone know why all this happened?
 
This comment is so true...
but what happens when something that should be disclosed isn't disclosed..?

http://www.theaustralian.com.au/bus...over-last-decade/story-e6frg8zx-1225813989559

"...Eslake says regulators had to work within the frameworks that were laid down by parliament. "I think what the latest financial crisis has exposed again . . . is the weaknesses inherent in the Australian approach to securities market regulation, which essentially relies overwhelmingly on disclosure," he says.

"What's happened with each successive piece of legislation, including the Financial Services Reform Act, is that the disclosure requirement has become more onerous but the information that is being disclosed as a result of that has been of no greater use and in some ways of diminishing use, because what it led to was product disclosure statements that were so large as to be almost incomprehensible to the average unsophisticated user."

ASIC commissioner Belinda Gibson says the regulator will be reviewing the adequacy of disclosure following a number of corporate failures during the crisis that exposed retail investors to significant losses: Storm Financial, Great Southern and Timbercorp...."
 
Thanks for the posts and news links regarding Astarra.

I heard on the grapevine that the ASIC are sniffing around a few financial planners and their practices linked to Astarra.

What a disaster.
 
mini11 said:
I've been searching about the place for information on Astarra Funds Management and its related entities and was surprised the firm is now under investigation.

Is this a surprise to anyone?

Does anyone know why all this happened?
Click to expand...
It was flagged by John Hempton of http://brontecapital.blogspot.com/ in a letter to ASIC after he tipped off journos who were unable to find enough evidence to publish anything at the time. The blog tells the story quite well.
 
Taxation

Today I had an interesting conversation with an employee of ASIC. I asked the employee why wasn't ASIC doing anything about members of various group encouraging member of the FMF to vote in support of distributions from the FMF.

I complained why didn't ASIC make the manager retract its statements about possible future distributions.

The employee said she wouldn't comment - I was disappointed. I said (words to the effect of) "well, if I went to a bank and invested $1000, and then the bank lost $500, but in a week's time contacted me and said 'We've found $100 of the missing $500 but were going to pay you as interest', what would you expect would happen?'

I said (words to the effect of) that no one would accept that - getting one's own money back as an interest payment and having it taxable is just a nonsense.

I then said the FMF was like that and with all its debt, losses, and impairments, the fund would not be capable of deriving an income and so could not pay distributions.

She would not comment and said it was not a matter for ASIC. I was stunned, if the payment of capital from a fund as distributions is not a matter for ASIC, then what was a matter for ASIC?

She suggested I phone the tax office.

I phoned the tax office and the officer told me that ASIC should have dealt with the issue. The officer further advised me that there was nothing I could do until such a payment was made, and then I would be able to make a complaint to the ATO about the payment. That was good news.

It was also good news that the ATO would accept a complaint from an investor if that investor believed that he/she had paid tax on distributions from a managed fund in the event that managed fund had done no more than return capital as distributions - that investor may be entitled to a tax refund.

It seems that today was a day of enlightenment, ASIC failed to act, but the ATO was ready to act - impressive thought - I'm not normally happy about the ATO but I confess I was today.

For whatever reason, completely isolated from my experiences, this afternoon the manager of the FMF issued this statement by email to a member of the FMF Coffee Club:-

"... Good afternoon Ian,

It is a delightfully short answer for you: We are acutely aware of the tax consequences of different types of potential “payments” (our preferred choice of word) to Unitholders and would seek professional advice regarding the best interests of Unitholders before proceeding with any payment. My further comments are that in its present form there is no way I can see in the foreseeable future that the Fund could generate “accounting net income” which could be “distributable” to Unitholders and thus taxable in their hands. Conventional redemptions are not currently possible due to the $1 per unit fixed redemption price (stuff-up by CPL) in the Constitution. Hence any potential payment from the Fund to Unitholders would be in the character of a “return of capital”.

Regards, Rodger Bacon......" (emphasis added)

If the manager wants to change the 'form' of the FMF, then let's see the meeting, and at that meeting it will be the manager that has to jump the 75% hurdle.

Even introducing a VUP will not allow for distributions, but the manager is free to dream as managers do.

We have been battling this issue for a long time - there have been far too many trading on the needs of investors by promising them something that cannot be delivered.

I live in sincere hope that there will be no more false promises about distributions from the FMF.

Damn those who live to deceive.

No thanks to ASIC - thanks to the ATO for giving me a backstop to my beliefs.
 

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