Wednesday, September 24, 2008

Macquarie Winton Global Opportunities Trust

I promised a follow-up to my post on Australian managed futures funds. Obviously, I'm not currently in the market for any new investments in Australia, but one day I will be. And one area where I want to increase exposure is in managed futures funds.

The Macquarie Winton Global Opportunities Trust is a managed futures fund listed on the Australian stock exchanges. The advantages of this is that there is no minimum investment required and you can redeem your investment at any time. The downside is that there is usually a large spread between buy and sell prices and the stock is not marginable with CommSec. It does trade at a discount to net asset value though. Also the stock is in fact a seven year capital protected product similar to the Man OM-IP funds. At the end of this period you can receive units in an unlisted fund. For the 2007-8 year earnings per share were 31.8 cents but only 5.8 cents were paid out as a distribution. It seems the distributions are interest on the funds cash, while net capital gains will be paid out at maturity. This allows investors to take advantage of the long-run CGT rate. By contrast, the unlisted Macquarie Winton Global Alpha Fund pays out all earnings, is not capital protected and as a result has somewhat lower fees. Returns are comparable to the other Winton funds:

The fund has been about flat since the end of July. The Winton funds appear to be beating benchmarks.

Independent research on the fund was lukewarm - with "approved" or "recommended" assessments rather than higher ratings. One analyst was worried about the capital protection structure and costs, while the other regarded the underlying fund as too much of blackbox. I think neither critique is now particularly relevant after three years of fund existence. In conclusion the fund has some pros and cons relative to the other products available. You'd have to assess how important each of those is to you when deciding which to invest in.

You can get lots more info on the fund from Macquarie's website.

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