Frequently Asked Questions

Questions relating to investing with NavraInvest

Who regulates NavraInvest and the Navra Blue Chip Funds?

NavraInvest Limited was incorporated on 15 July 2002 and has been granted an Australian Financial Services Licence (no 226358) by ASIC which includes the authority to operate registered managed investment schemes.
NavraInvest has been appointed the responsible entity and the manager of the Fund and the underlying Investment Fund. A compliance plan has been prepared for the Fund to ensure compliance with the Corporations Act 2001 in relation to managed schemes and with the constitution of the Fund. The compliance plan is designed to document compliance risks and the monitoring process and to provide a basis for compliance adherence and auditing. A compliance committee with two external compliance members has been appointed. The compliance plan has been lodged with ASIC and is independently audited.

In a nutshell what is the NavraInvest investment philosophy?

The NavraInvest investment philosophy for the Fund is a combination of a conservative process of selecting quality blue chip shares, combined with an active management style that provides the flexibility to take advantage of fluctuations in share prices.

How do we manage a portfolio?

Shares are selected from the S&P/ASX 200 Index. These shares are thoroughly researched using rigorous fundamental analysis to assist in the identification of companies that are financially strong, well managed and display good investment potential. Continuous monitoring of the companies in the Index ensures that the investment portfolio is subject to robust review at all times.

NavraInvest applies a unique quantitative approach to actively manage shares in the portfolio; we do not follow a "buy and long term hold" approach. Over the long term we expect quality blue chip shares to outperform the general market. However, share prices do not move in a uniform manner and even the best blue chip shares have periods of weakness and under performance. Our proprietary investment management system pinpoints buy and sell opportunities to take advantage of a share's price strength or weakness, potentially adding significantly to the returns made by the portfolio. Active management means that the Fund will not always be fully invested in shares, enabling the manager to respond to buying opportunities when they occur.

What is the expected return?

The objective is to outperform the S&P/ASX 200 Price Index by 5 to 10% per annum. We believe that this is possible using the NavraInvest investment management approach.

What is the average cash holding?

The average cash holding will depend on share market conditions.
In a falling market, the portfolio will tend to be more fully invested.
In a rising market, the cash component will increase as share parcels are sold progressively to capture gains.
The objective is for the portfolio to have an average cash holding of approximately 20%. This level of cash provides an excellent buffer to take advantage of extreme falls in share prices.

How often does the share composition change?

Shares in the portfolios are of extremely high quality as to avoid companies that could go into liquidation or whose share price remains depressed for long periods of time. Once on the approved list there tend to be few changes despite constant monitoring of financial soundness. We expect that only about 20% of shares (3 or 4 per year) would be substituted.

What is the effect of varying market conditions?

The main requirement of the NavraInvest approach is share market volatility. Shares may be regarded by analysts as cheap or expensive, the market may be bullish, bearish or going sideways. The NavTraDE software considers relative recent value rather than absolute value.

How important is volatility?

The NavTraDE software depends on reasonable volatility irrespective of the overall trend of the share price or the market overall. The more cycles in a share price, the more effective dollar cost trading will be.
In a falling market the system can produce positive returns if there is sufficient volatility.

Has the NavTraDE software been tested commercially?

No. However, earlier versions of the software have been used by investors to test the dollar cost trading concept prior to commencement of the Fund.

Questions relating to our Funds

What risks are involved in choosing to invest in the Fund and how are they managed?

Any investment, including an investment in units in the Fund, carries risk. The performance of the Fund as well as the performance of entities in which the investments are made, may be affected by economic conditions in Australia and in those countries in which those entities have their operations. Also of relevance to the performance of the Fund will be interest rates in Australia, overseas trading relationships, the general state of the world economy, the liquidity of financial markets (particularly the market operated by ASX), changes in government policy and other factors which are beyond the control of NavraInvest and the entities in which the investments are made.
The PDS covers the specific issues of market volatility, economic risk, share (security) specific risk and income risk. It should be noted that the investment management system has not been operated on a commercial basis and no guarantees can be provided as to the success of the system.

How do NavraInvest Funds correlate with other share funds?

As a result of active trading and regular realisation of gains, we expect the NavraInvest Funds to produce reasonably consistent quarterly and annual income.
The benefit of the Navra Funds is that the investment can be readily redeemed at any time.
Therefore the NavraInvest Funds will mix well with a wide range of other managed share funds in an investor's portfolio.

Are NavraInvest funds absolute return funds?

Yes. The investment objective is to maximise the return of the fund rather than to match or just exceed a benchmark. The portfolios do not aim to ‘hug a benchmark'.

How do investors obtain growth?

Income from NavraInvest share fund portfolios is fully distributed each financial year on a quarterly basis. The way for investors to generate growth is to reinvest their distributed income each quarter in additional units in the fund. Quarterly compounding is potentially very powerful.

What shares does the Fund trade in?

You will find a list of shares held or traded by the Investment Fund in the 'shares in portfolio tab of the our Funds' page.

How do I invest in a Fund?

In order to invest you must read the relevant PDS; complete the application form together with a cheque payable to "NavraFunds Application Account" and mail to us at:
Navra Blue Chip Share Funds
NavraInvest Limited
Reply Paid 67 Royal Exchange
Sydney NSW 1224
Note for advisors - reply paid envelopes are available upon request or an investor can simply write this on an envelope and we will receive it and process it.

What fees do I pay?

We have established three different types of fees for investors who invest directly into the NavraInvest Funds:
1. Entry fee: Only applicable when you seek advice from an authorised financial adviser. On your initial application you may pay up to 4.4% of the amount invested. This fee is determined in conjunction with your financial advisor. There is no exit fee.
2. Ongoing advisor fee: Your financial adviser may receive an ongoing adviser service fee for extra advice about your investment in the Fund. This fee is negotiated between you and your financial adviser.
Australian Retail Fund: Your financial adviser may receive a trailing commission of 0.44% pa (including GST) of the value of your investment in the Fund. This fee is paid by NavraInvest from its own funds and is not charged to the Fund.
3. Management fee: This fee represents costs involved in managing your investment and is chargeable at the following rates:
Navra Blue Chip Australian Share Retail Fund
1.5% per annum (1.5375% per annum including GST less RITC)
Navra Blue Chip Australian Share Wholesale Fund
1.1% per annum (1.1275% per annum including GST less RITC)
The management fee is deducted by us from the assets of each respective Fund and is reflected in the unit price of your investment. The fee is charged daily and paid monthly.
Investors who invest into the NavraInvest Funds via a mastertrust or a Wrap, may incur fees that are applicable to that platform.

Questions relating to transactions

How often can I add to the fund or withdraw funds?

The Fund is daily dealing, which means you can invest or withdraw funds on a daily basis.

How can I add further funds to my existing NavraInvest holding?

Two options are available:
1. Additional Investment - funds can be added to your existing holding on ad hoc basis, the following minimums apply per additional investment:
Navra Blue Chip Australian Share Retail Fund $500
Navra Blue Chip Australian Share Wholesale Fund $250,000
To make an additional application, please complete an Additional Application Form and post it to our office together with your cheque.
2. Savings Plan (Australian Retail Fund only) - nominated, recurring contributions are made into your existing holding via automatic monthly debit orders. Minimum saving plan contribution is $100. To take advantage of the Savings Plan, please complete Savings Plan Direct Debit Request Authority Form and forward it to our office. You may terminate and restart your Savings Plan at any time by completing appropriate sections of the Savings Plan Direct Debit Request Authority Form.
Debit Orders are processed on 15th of each month.

How can I Withdraw Funds?

In order to withdraw or redeem funds please complete the withdrawal form available by request or from our web site and mail it to us. We will process your request the same business day of receiving your request. However, receipt of payment may take up to seven business days.

Questions relating to Tax and Distribution

When are distributions calculated?

Distributions are calculated on the last day of the last month in each quarter and are normally paid within 14 days.

How do I receive my distribution?

You can choose to have your distribution:
1. Automatically reinvested in your Fund, with no application fee or transaction costs payable (no buy spread).
2. Paid directly to your nominated account at an Australian bank, building society or credit union.

What happens after the distribution?

Immediately after an income distribution payment, the net asset value falls by the same amount as the distribution resulting in a corresponding lower unit price.
If you invest just prior to the distribution payment, then the payment is a return on your investment. If you invest just after the payment, then the unit price is correspondingly lower.

Are imputation credits passed through to investors?

Yes. Dividends may be limited due to the active nature of the portfolios. At the time dividends are declared, the portfolio may not be fully invested in that particular share. Imputation credits may also be limited, as the share has to be held for a minimum period before imputation credits are allowed. This period was 45 days and is currently under review by the Australian Tax Office.

Will I be eligible to claim the Capital Gains Tax (CGT) discount, if I buy units in the Fund and sell them more than a year later?
You will be eligible to calculate a capital gain using the discount method when selling units in the Fund if you:
- Are an individual, a trust or a complying superannuation fund
- Acquired the units at least 12 months before selling them
- Do not choose to work out the capital gain using the indexation method

What discount percentage do I apply to the capital gain?

The discount percentage is the percentage that you can reduce your capital gain after application of all available capital losses.
The discount percentage is 50% for individuals and trusts, and 33⅓% for complying superannuation funds.

Will the distribution include income and capital components?

Distributions will generally include mainly income components. The income components will include interest, dividends and gains made by the Fund on the sale of securities.
As the Fund has an active investment nature, any gains received from actively trading in securities on the Fund's investment portfolio are treated as income and not capital in nature.
Unit holders will receive an annual tax statement containing a summary of their distributions and tax components for the year ended 30 June.

Do I receive a statement?

You will receive a yearly tax statement and tax guide to accompany the statement. This will allow each unit holder to complete his/her tax return.

Questions relating to Superannuation

Can I invest my self managed Super into the Fund?

You can invest as a trustee of your self managed super fund. It is important to note that your super fund will be responsible for the taxation of the distribution income capital gains received as distributions as will all unit holders of the Fund.

Can I invest my normal super into the Fund?

No. We are not a complying super fund. However, your financial advisor can assist you to invest your super via a Super platform.

Questions relating to Communication

What statements do I receive showing my investments?
1. Each time you invest or withdraw funds you will receive a transaction statement confirming each investment or withdrawal (including Savings Plan transactions).
2. On a quarterly basis you will receive a distribution statement showing income paid into your nominated account or additional units credited to your account if you have selected the re-investment option.
3. On an annual basis you will receive a tax statement containing a summary of your distributions and tax components for the year ended June 30 and a capital gains tax statement if you have redeemed any units during the financial year.

How can I retrieve my account information?

You can access information on your account via the Investor Login section of our website, using the PIN issued to you separately. If you wish to register for a PIN, please contact us on 1300 656 131.
Alternatively, you can request information on your account by contacting us on 1300 656 131 or email info@navrainvest.com.au

top