Rabo natural resource fund

shaykay

Hi all,

I recently invested in the above fund. It was doing quite well up until this week. I was up about 5% on my initial investment in just over a month but this week it has gone from making a profit to a loss in two days! Does anyone know the reason for this sharp Uturn?

Anyone in the same fund or have an opinion on the best course of action from here? Ive only been in the fund a short time so pulling out seems a bit drastic. Do people think this is a good investment and it will turn around? Rabo included it in their top picks for 2011. It was number 2 behind smart energy if I'm correct.

I would be interested to hear peoples opinion on the matter. thank you in advance for any help provided.

jank

Just had a quick look there. Commodities are volatile so you have to take the rough with the smooth. You do know funds can go up as well as down? There is no sure way of making money in this.

Why has it gone down in the last few days well? QEII is ending soon and with it the commodities boom, so there is a correction going on.

In my opinion leave it in there and assess after a year has gone past. If you already worried though maybe this game isn't for you. Do you know anything about investing or economics?

http://www.rabodirect.ie/binaries/profile_F0GBR06P47_tcm30-51112.pdf

http://www.jpmorganassetmanagement.lu/EN/showpage.aspx?pageid=44&FundID=6024&ShareclassID=6267&promo=altacc

Also it appears that you bought at the top of the market and that this fund is heavily leveraged against oil prices,

thomasm

1.9% pa fee is tasty for the product provider on top of entry and exit fees

shaykay

Of course I am aware that funds can go up aswell as down and that there is a potential for loss. I was also aware that I bought in at a high price. However my concern is over the steep decline in a very short space of time.

I initially planned on leaving my investment sit in the fund for 5 years. I was just wondering if some event had occured that was behind the downturn in the fortunes of this particular fund.

I have some knowledge of markets and economics etc but by no means do I claim to be an expert, if I was I wouldn't be seeking advice!

The fund has grown roughly 146% since inception and i was wondering if the opinion out there was that performance may slacken off in the coming years. Rabo's top picks generally perform well with 80% of 2010 picks having growth last year. I am open to correction on that but it is roughly correct.

irishh_bob

shaykay wrote: »

Hi all,

I recently invested in the above fund. It was doing quite well up until this week. I was up about 5% on my initial investment in just over a month but this week it has gone from making a profit to a loss in two days! Does anyone know the reason for this sharp Uturn?

Anyone in the same fund or have an opinion on the best course of action from here? Ive only been in the fund a short time so pulling out seems a bit drastic. Do people think this is a good investment and it will turn around? Rabo included it in their top picks for 2011. It was number 2 behind smart energy if I'm correct.

I would be interested to hear peoples opinion on the matter. thank you in advance for any help provided.

they had the india fund as one of thier top picks yet its turned out to be a complete stinker so far, banks are often flexible with the truth when it comes to reporting how a fund has performed in the past

Low Energy Eng

It has been quite volatile lately, Im also invested in it and I'm holding out to the end of April, the US may need to raise debt ceiling and near after start QE3, all good for your investment choice.

jank

shaykay wrote: »

Of course I am aware that funds can go up aswell as down and that there is a potential for loss. I was also aware that I bought in at a high price. However my concern is over the steep decline in a very short space of time..

See QEII and decline in oil prices.

shaykay wrote: »

I initially planned on leaving my investment sit in the fund for 5 years. I was just wondering if some event had occured that was behind the downturn in the fortunes of this particular fund...

If you are worried after one month then maybe you should not leave it there for 5 years. Like your fund has another 59 months to recover and turn a profit...!

shaykay wrote: »

I have some knowledge of markets and economics etc but by no means do I claim to be an expert, if I was I wouldn't be seeking advice! ...

Well the first rule of investing is dont lose money.;) Like have you invested your life savings in this fund? Do you have other investments?

shaykay wrote: »

The fund has grown roughly 146% since inception and i was wondering if the opinion out there was that performance may slacken off in the coming years. Rabo's top picks generally perform well with 80% of 2010 picks having growth last year. I am open to correction on that but it is roughly correct.

Commodities are at record prices lately. Is there room for growth? maybe, if the industrialisation of china holds up. Just keep your eyes on the news re what the fed is doing and what china is doing.

shaykay

I would just like to thank the people who have had constructive feedback so far. It is very much appreciated!

However to the people who feel they need to divulge there massive wealth of information on the topic and quote me, your not really helping. The initial reason for the thread was to enquire if there was a particular reason behind such a sharp drop.

Some posters have been genuinely very helpful and I am very grateful but I just feel some others are posting to simply demonstrate whatever knowledge they have (little or large) and are not really being constructive.

If you've got nothing helpful or constructive to contribute please fight the urge to post. Bearing in mind that this thread could be viewed by potential future investors in this or another fund and they won't want to sort through filler.

jank

shaykay wrote: »

I would just like to thank the people who have had constructive feedback so far. It is very much appreciated!

However to the people who feel they need to divulge there massive wealth of information on the topic and quote me, your not really helping. The initial reason for the thread was to enquire if there was a particular reason behind such a sharp drop.

Some posters have been genuinely very helpful and I am very grateful but I just feel some others are posting to simply demonstrate whatever knowledge they have (little or large) and are not really being constructive.

If you've got nothing helpful or constructive to contribute please fight the urge to post. Bearing in mind that this thread could be viewed by potential future investors in this or another fund and they won't want to sort through filler.

WTF? Are you serious? This is a public forum mate. If you have a problem with a post then report it and if it breaches the forums rules then I will be reprimanded for it.

I am not being constructive you may say? Well how is that? I have given you the answer about 2/3 times about WHY your investment has gone down in price lately.

a) Resources are volatile.
b) Fed is QEII ending.
c) Oil prices are declining

If you are any other poster happens to disagree with this then fire away as I would like to hear why. In fact I would argue that I have given you more information than all other posters.

You may not like the tone of my posts but have I said anything that is wrong factually? Alarm bells are ringing when after one month into a 5 year investment you are getting cold feet. Not really a positive indictment of someone knowing what they are doing would you not say?

If you were after a hug and a cuddle then this is not the forum for it mate. Grow some tougher skin and stop being so offended by a post on the internet that just tells it like it is.

Lastly DYOR.

Zascar

Just looking at this fund its done pretty terrible over the last while, I think I'll get out and switch to something else. pretty disappointed by the Rabo Funds all together i have had little success with them. Any other decent tips anyone?

Jim2007

Zascar wrote: »

Just looking at this fund its done pretty terrible over the last while, I think I'll get out and switch to something else. pretty disappointed by the Rabo Funds all together i have had little success with them. Any other decent tips anyone?

Analyse why you have little success with then, or tell us what you'd consider success.....

Success in funds requires two things a good asset allocation strategy and staying the course. The fund mentioned here clearly states on the fact sheet: "To provide long-term capital growth by investing primarily in natural resources companies, globally." and note the little red box below the description - Volatility Analysis: Highest! All this means that you should not be in this fund if you can't stay in for at least 5 years or more and if you are in it, you need be comfortable with very big swings in the valuation.

Jim

Low Energy Eng

QE3?

http://www.bloomberg.com/news/2011-06-08/payroll-tax-break-said-to-be-discussed-by-obama-aides-amid-slowing-economy.html

irishh_bob

Jim2007 wrote: »

Analyse why you have little success with then, or tell us what you'd consider success.....

Success in funds requires two things a good asset allocation strategy and staying the course. The fund mentioned here clearly states on the fact sheet: "To provide long-term capital growth by investing primarily in natural resources companies, globally." and note the little red box below the description - Volatility Analysis: Highest! All this means that you should not be in this fund if you can't stay in for at least 5 years or more and if you are in it, you need be comfortable with very big swings in the valuation.

Jim

if the above is correct then why do rabbo ( on thier website ) have a top performer section for 2010 and 2009 before that , on this list they show how specific investments performed within twelve months , thier is no certainty that a fund needs five years to give a solid return , depending on the global economy , it could soar for the 1st year and completley flop for the next four , anyone who invested in 2006 for example would have been way better had they just got in for a year , had they waited untill 2011 to exit , thier investment would be way down on what they put in ,last december , i invested in many of the top performers from rabbos stable , everyone of them has flopped despite having done 50 and 60 % last year according to the rabbo website , ive said it before and il say it again , banks are very flexible with the truth when it comes to reporting on the past performance of funds

Jim2007

irishh_bob wrote: »

if the above is correct then why do rabbo ( on thier website ) have a top performer section for 2010 and 2009 before that , on this list they show how specific investments performed within twelve months , thier is no certainty that a fund needs five years to give a solid return , depending on the global economy , it could soar for the 1st year and completley flop for the next four , anyone who invested in 2006 for example would have been way better had they just got in for a year , had they waited untill 2011 to exit , thier investment would be way down on what they put in ,last december , i invested in many of the top performers from rabbos stable , everyone of them has flopped despite having done 50 and 60 % last year according to the rabbo website , ive said it before and il say it again , banks are very flexible with the truth when it comes to reporting on the past performance of funds

Bob,

There is a lot of things to comment on here!

Lets start with the most obvious - You can't time the market, nor should you try! Investing is not a race, it's a marathon and you need to be able to go the distance, that is why we use 5 years (in Switzerland) as the guide line for investing in anything other than cash or near cash instruments. Of course it can still go wrong, but it is still a good rule of thumb and usually works out fine when you combine it with the next rule - Asset Allocation.

Getting your asset allocation right is one of the most important factors in generating results over the long period. Much more so than stock picking or fund selection! This is because diversification reduces your exposure to anyone class, and usually when one class of asset does badly others will do well. For example my STOXX 50 Value Index has not done much for the last 18 months, but my European property index is up over 26% during the same period!

Now to do asset allocation correctly you need to rebalance your portfolio about once a year, this means reduce asset classes that have effectively done well and put cash into the classes that have not done so well. So in my case I'll be adding new money to indexes such as the STOXX 50 and if that does not bring my asset allocation into line, I'll dispose of some of the over achievers such as the property index.

That is how you do investing for the long term, not listening to the talking heads and following the recommendations of the financial institutions! Remember at the end of the day most financial advisers working for a bank are salesmen for the company products.

Adapting this approach, to the rabbo fund selection and you be coming up with a very different selection.

I'm not in Ireland, so I don't have access to their funds, but one thing caught my eye - the "BNP Paribas Plan Target Click Funds", these actually handle the asset allocation for you, so there is no need to do the stuff yourself. Just pick the correct maturity date and off you go! Of course you still have all the risks associated with such investments, but at least you are following recommended best practice in trying to achieving your financial objectives.


Jim.

irishh_bob

Jim2007 wrote: »

Bob,

There is a lot of things to comment on here!

Lets start with the most obvious - You can't time the market, nor should you try! Investing is not a race, it's a marathon and you need to be able to go the distance, that is why we use 5 years (in Switzerland) as the guide line for investing in anything other than cash or near cash instruments. Of course it can still go wrong, but it is still a good rule of thumb and usually works out fine when you combine it with the next rule - Asset Allocation.

Getting your asset allocation right is one of the most important factors in generating results over the long period. Much more so than stock picking or fund selection! This is because diversification reduces your exposure to anyone class, and usually when one class of asset does badly others will do well. For example my STOXX 50 Value Index has not done much for the last 18 months, but my European property index is up over 26% during the same period!

Now to do asset allocation correctly you need to rebalance your portfolio about once a year, this means reduce asset classes that have effectively done well and put cash into the classes that have not done so well. So in my case I'll be adding new money to indexes such as the STOXX 50 and if that does not bring my asset allocation into line, I'll dispose of some of the over achievers such as the property index.

That is how you do investing for the long term, not listening to the talking heads and following the recommendations of the financial institutions! Remember at the end of the day most financial advisers working for a bank are salesmen for the company products.

Adapting this approach, to the rabbo fund selection and you be coming up with a very different selection.

I'm not in Ireland, so I don't have access to their funds, but one thing caught my eye - the "BNP Paribas Plan Target Click Funds", these actually handle the asset allocation for you, so there is no need to do the stuff yourself. Just pick the correct maturity date and off you go! Of course you still have all the risks associated with such investments, but at least you are following recommended best practice in trying to achieving your financial objectives.


Jim.

i tuned out after you said this , you cant time the market , timing is everything when it comes to investing , its the difference between those who win and those who dont

your strategy in terms of adhering to a strict specific timeline for investing is too rigid and orthodox IMO , if it were that simple , everyone would simply clock in on the 1st of january 2006 and check out on 1st january 2011 and as i said in that instance , the investor would be worst off than where he started in nearly all cases

Jim2007

irishh_bob wrote: »

i tuned out after you said this , you cant time the market , timing is everything when it comes to investing , its the difference between those who win and those who dont

Well if you truly believe that then you're destined to make your stockbroker a happy man :rolleyes:

irishh_bob wrote: »

your strategy in terms of adhering to a strict specific timeline for investing is too rigid and orthodox IMO , if it were that simple , everyone would simply clock in on the 1st of january 2006 and check out on 1st january 2011 and as i said in that instance , the investor would be worst off than where he started in nearly all cases

Not at all, in the first place an investor, a real investor, would only have a small amount in such a fund, and in the years when it did really well he would have reduced his exposure through rebalancing his fund and in the bad years he have been stocked up on it when prices were low.

Jim.

Raskolnikov

Jim2007 wrote: »

Lets start with the most obvious - You can't time the market, nor should you try!

In fairness, you kind of can. There is a very simple and mechanical measure that I have used to determine the measure of how cheap a stock market is; it's the level of the total value of the stock market to the GDP of the country that market operates in. Warren Buffett uses it (not explicitly) and Sir John Templeton (explicitly) used it too. I generally take the Benjamin Graham portfolio allocation system (75% maximum sizing and 25% minimum sizing in either fixed income or cash positions) and apply it to stock market to GDP ratio (i.e. if the market is valued at a high level to GDP, I divert my portfolio into cash/fixed income; if it moves to a low level of GDP, I move into equities).

There's a website that keeps tack of this correlation by the way http://www.gurufocus.com/stock-market-valuations.php

Jim2007

Raskolnikov wrote: »

In fairness, you kind of can. There is a very simple and mechanical measure that I have used to determine the measure of how cheap a stock market is; it's the level of the total value of the stock market to the GDP of the country that market operates in. Warren Buffett uses it (not explicitly) and Sir John Templeton (explicitly) used it too. I generally take the Benjamin Graham portfolio allocation system (75% maximum sizing and 25% minimum sizing in either fixed income or cash positions) and apply it to stock market to GDP ratio (i.e. if the market is valued at a high level to GDP, I divert my portfolio into cash/fixed income; if it moves to a low level of GDP, I move into equities).

There's a website that keeps tack of this correlation by the way http://www.gurufocus.com/stock-market-valuations.php

Yes, but what you are talking about here is a tactical asset allocation as practised by many active portfolio managers. And while there is certainly a lot of doubt about whether or not this adds much value in the long run, you're still not at the point where you're jumping in and out of funds in the hope that you're a betting on the right one.

And I'd suggest we're not so far apart - Asset allocation plays a major part in total returns over the long haul.

Jim.