This mutual fund claim to be best performing fund in Australia for last 8 years claiming returns of over 18% per year to its fund investors. Why would this mutual fund invest about 5% of AUM at 10% for 2 years when its investors expect 18% based on last 8 years performance? 10% vastly underperform 18%. How mutual fund going to make up this underperformance on this 5% aum allocation? Answer is this deal got sweetener in it, namely the 1st mortgage in plutonic dome marymia tenements, that will allow mutual fund to potentially foreclose and then sell vango 2yr note at premium once vango default. Clearly mutual fund expect default scenario to make up 8% p.a. interest that mutual fund missing out on over 2 years since mutual fund would not lend money at 10% for 2 years when it's investors expect 18% based on past performance.
VAN Price at posting:
2.9¢ Sentiment: None Disclosure: Not Held
