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advice please! funds that invest heavily into australia
c brown
Posted: 16 February 2013 21:39:28(UTC)
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Dear all

I have invested my yearly isa allowance into latin america, china and global emerging markets for the past 5 years and I am very happy with them. I went against all fa advise and went by feel. I'm just a beautician so I try my best. I currently use skandia with my' 'fa' dealing with purchase etc. I need to learn by myself, I know! I am trying to find a fund that is heavily involved in australia as the country seems to be doing well with no heavy banking debt (maybe I'm wrong) or exposure to europe. I have found first state asia pacific leaders. Does anyone know of any other funds?

Aside from that I have also thought about aberdeen new thai but am unsure due to instability in the south of the country. Also have heard vietnam, I know one fund isn't doing too well but its the longhaul I'm interested in, in those sectors. Any ideas, information will be greatly received and appreciated. So pleased I found this site.

Kind regards
C
TJL
Posted: 17 February 2013 08:27:03(UTC)
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An ETF would give you exclusive exposure to Australia, but is the Australian market not at a significant high at the moment? (so you'd be buying at the top - sorry if I've got this wrong).
Other than that it might be worth checking out all the main asia pacific funds/trusts (Aberdeen for example, who specialize in this area) to see which has the highest Australian exposure.
Do you not fancy diversifying away from asia pacific and emerging markets? (although I'm glad it's paying off for you, and some of them are being tipped for this year I believe).
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c brown on 17/02/2013(UTC)
Micawber
Posted: 17 February 2013 10:55:07(UTC)
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Yes, the Australian index is currently near a high but then so are many other indices near their highs, so are bonds, so is gold....

On the plus side, Australia has comparatively low government indebtedness for a developed country, resources, loads of shale oil/gas to come, is stable and with good governance and likely to do well as other Asia-Pacific economies grow. The pound has steadily depreciated against the Oz dollar so that works in your favour too.

On the minus side, there's talk of a property bubble but then so there is in many another country and the government has scope (because of relatively low indebtedness) to manage the economy (as in UK) so that prices can fall over time in real terms rather than collapse in a burst bubble.

ishares have an ETF tracking the Australia index. It's risen with the index about five percent in the past six weeks. Heavy on financials and miners IIRC.

Alternatively some funds (OEICS) in the region have a decent weighting towards Australian companies plus exposure to emerging economies in the area.

I'm looking at the ETF myself (and wishing I'd bought at the beginning of the year) to hold on a five-to-ten year view. But after the recent equity surge I'll probably hold off to see whether there is a "correction" before the middle of the year.
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c brown on 17/02/2013(UTC)
TJL
Posted: 17 February 2013 15:20:58(UTC)
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Micawber,
I believe the iShares Australian ETF is based in dollars, do you know how that works for a UK investor using a standard UK platform?
I ask because I have a crazy notion to invest a modest amount in a Philippines ETF, some of which are dollar based, although I appreciate there is a sterling option offered by db x.
There must be a latent gambler in me somewhere.
Regards.
Micawber
Posted: 17 February 2013 16:03:15(UTC)
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I can't say that I do know how that works as I have not yet tried actually to buy some: but on my ISA platform (TD) stockwatch, whereas the ishares Canadian ETF (ticker is FTSE:ICAN) is shown in dollars, the Australian one (SAUS) is shown valued in pounds. Or on google finance search FTSE:SAUS.

Am I going to have a problem?? The only ETF I actually hold on that platform is the ishares S&P Agribusiness commodities producers index (FTSE:SPAG), bought in mid-Jan 2013, which is going OK (+4.4% in five weeks).
....
I am about to start a non-ISA platform with HL

PS: another quick look at the SAUS spec shows it does have an ISA wrap - see http://uk.ishares.com/en/rc/products/SAUS (and so does the Canadian one)
Jeremy Bosk
Posted: 17 February 2013 16:37:15(UTC)
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Investing in Australia has been debated and reported on this site several times in the past. To find the previous mentions, go to the Google search engine and in the search box enter: "site:citywire.co.uk Australia" without the quotation marks.

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c brown on 17/02/2013(UTC)
c brown
Posted: 17 February 2013 16:48:44(UTC)
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Dear micawber

Thank you very much for your advice. Sorry to sound silly but does that mean I can use my isa allowance to invest in the etf australia? Also what do you mean by currency correction? Is that to do with the devaluation of aus dollar? I have also looked at agriculture and natural resource funds, the latter being quite volatile, but am looking at 5 10 years.

Kind regards
Micawber
Posted: 17 February 2013 17:44:41(UTC)
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I'm not in a position to give advice, just to share thoughts. You make your own decisions. If you read the back posts and news items over the past few months you'll see that views on Australia are mixed.

The index is high, and has gone up lately. It may fall off a bit (a 'correction'). Personally I'm waiting for that, but that's my own decision.

I should be able to buy into my shares ISA and if you have a shares ISA you should be able to do likewise, if that's what you want to do. If you aren't familiar with ETFs I suggest you read up on them. You might prefer to look for other options and broader ones as suggested by others.

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c brown on 18/02/2013(UTC)
c brown
Posted: 18 February 2013 15:57:40(UTC)
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Thans micawber. I have been reading up loads and will now do the same re etfs! Good luck!
Micawber
Posted: 18 February 2013 19:18:45(UTC)
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Check this out from today's The Australian:
http://www.theaustralian...-e6frg916-1226580162344

Interesting and relevant.
"Australian share market sentiment has been quite negative for the past two years that it's now seeing a significant mood shift in response to an improving economic landscape, particularly in China,'' said RBS Morgans investment adviser Christopher Macdonald. "We are seeing some excellent results coming out of this reporting season, and even average results are being rewarded as money is flowing out of cash and bonds in search of capital growth and higher yields.''

"I think Australian equities can run a little bit further before we set up those classic conditions where there will be a collective sense that the market has gone too far too fast and needs to pull back,'' Mr Macdonald said.

"That said, the longer we can stay above 5000 and avoid any global hiccup, then it does start to look like a genuine floor.''
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c brown on 27/02/2013(UTC)
DGL
Posted: 19 February 2013 18:06:44(UTC)
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invest in Oz ?
1. Increasingly dependent on china's demand for minerals
2. V strong currency which has damaged all other industries (including tourism)
3. Labour Govt headed by a mad Welsh woman who wants increased taxation from the 'rich' miners.
4. Still heavily unionised (not been through the Thatcher revolution)
5. Property prices - in trendy bits of Sydney now competing with Central London for $ / sq foot.

Great place to visit - Lions this summer, Ashes next winter (if you can afford it...) but investment ? not for me !
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DAVID ARBUTHNOT on 11/04/2013(UTC)
Alan Selwood
Posted: 27 February 2013 14:56:41(UTC)
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DGL said:
invest in Oz ?
1. Increasingly dependent on china's demand for minerals
2. V strong currency which has damaged all other industries (including tourism)
3. Labour Govt headed by a mad Welsh woman who wants increased taxation from the 'rich' miners.
4. Still heavily unionised (not been through the Thatcher revolution)
5. Property prices - in trendy bits of Sydney now competing with Central London for $ / sq foot.

Great place to visit - Lions this summer, Ashes next winter (if you can afford it...) but investment ? not for me !

Having recently spent a few weeks in OZ, I can vouch for the strength of currency crucifying the tourist industry there. One small restaurant owner I chatted to after our meal said that when the £ was worth 3$AUD, there were loads of tourists and they spent well. But at 1.5$AUD, the tourists were there but not spending much. Since he said that, the currency has strengthened yet more against the £. I can only assume, therefore, that tourism takings from foreigners will be taking a big knock - though it didn't seem a problem to the locals to spend what we thought was far too much.

I agree also about the political sentiment. The woman is a complete prat, who should be taken off to somewhere quiet to play with her toys: she has no more sense of how to run a country than UK Labour and Lib Dem nutters.

Australian mineral firms - Chinese demand is crucial and not as obvious now as it was. Should be a good idea as and when the Chinese demand for iron picks up in a steady trend. BHP Billiton and RIO are good UK proxies for investing in that sector, I think.
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c brown on 27/02/2013(UTC)
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