Question re management costs

Just received my latest quarterly statement from the last distribution (BT are a bit slow ) and noticed that the management cost were significantly higher this quarter.

Does anyone know the reason for this?

Also, I have approximately one sixth of my holdings in the US fund (compared to the Oz fund), yet the management costs were nearly the same as the Oz fund. Does that sound right?

I haven't spoken to anyone at Navra at this stage, wanted to run it past the knowledgeable folk here first to get an opinion(s).

Performance fees ... the Navra Australian funds outperformed the index in the 1st quarter of 2007.

Not sure about the US funds (I haven't followed that carefully) - but possibly the same reason.

Ah ok.

Should have realised.

Thanks for the quick reply Sim.

Another question if I may. Are these costs tax deductable and if so, will they appear on the annual tax statement or do we just show our accountants the quarterly statements?

Your returns are net of fees ... so there's generally no need to separate them out.

You should show your accountant the statements which detail the distribution breakdown ... there may be franking credits and capital gains included in the distribution income which will need to be accounted for separately.

Thanks again Sim. Much appreciated.

Can someone please clarify this for me. With the Navra fund there are three statements; the 'Distribution Statement', the 'Quarterly Statement' and the 'Annual Tax Statement'.

On the Quarterly Statement it shows the number of units held there but there is also an amount shown under Management Costs which says "This approximate amount has been deducted from your investment and includes all the management costs that were not paid directly out of your account".

This amount does not appear on the Annual Tax Statement so I have never claimed it as a deduction on my tax return whereas a friend of mine has been.

Before anyone says it, yes I will seek advice from my accountant but I thought I'd see what some of the other Navra unit holders are doing because often you can ask the same question to two different accountants and get two different answers.

Does that friend of yours use an accountant to do their tax?

You should not be claiming those management costs - they come out of the capital of your account (which causes a drop in unit price and which means your subsequent capital gains when you sell will be smaller).

As far as I'm concerned, you are doing the correct thing and your friend isn't.

Thanks for the explanation Sim. I knew there was a good reason for not claiming these management costs but I couldn't remember what it was.

Yes, he does use an accountant and after bringing the content of this thread to his attention he has now been advised not to claim them as they will offset any future capital gain.