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Critique my ETF portfolio
#16
So I am filling up my TFSA for the first time this year and will be adding some ETFs to diversify my portfolio.

At the moment I have the following:
Satrix 40
Satrix Indi25
SYGNIA 4IR
CoreShares S&P500

The plan is to have the following with a 40(local)/60(international) split:

INDI25
ABSA NFTRCI
CTOP50

GLPROP
SYGNIA 4IR
STXEMG
STXWDM (or ASHGEQ)

If I add the Emerging Market and World ETF, is it worth it to keep a portion in the S&P 500?

#17
Bandit is the expert on ETFs here, so I would wait for his comments before taking any action, but my immediate observations are:

1) Ashburton Top 40 is the exact same index as Satrix Top 40, but with lower fees, so I'd definitely recommend going Ashburton rather than Satrix for this one if you choose a Top 40 Index. But...

2) CTOP50 has much lower Naspers exposure than either Top 40 index, so if you're doing INDI also, then you have so much Naspers exposure (INDI is 40% Naspers), that either Satrix or Ashburton Top 40 (which are both also 20% Naspers) would be almost be duplication and put tons of risk in one company and you're at risk of a Steinhoff type collapse of a large chunk of your investment if something goes wrong with Naspers. If you're going to keep INDI, then I'd definitely go for CTOP50 rather than either Ashburton Top 40 or Satrix Top 40. Without INDI, I'd go for Ashburton Top 40.

3) Since you don't have mid-cap in your investment, CTOP50 is also better than a Top40 index, since it has some mid-cap exposure as well.

4) If you have STXWDM or ASHGEQ, then S&P is duplication. Remember, however, that you can only trade within the TFIA, and can't withdraw and then deposit again, so be careful if you sell S&P that the money doesn't get paid out to you but gets reinvested right away.

5) STXWDM is 60% US markets, whereas ASHGEQ is much more balanced globally, so you should decide on whether you think US will outperform the rest of the world under Trump before deciding on which of these two to buy.   ;-)

6) Just out of interest, why NFTRCI? This is very low risk and will give you an almost guaranteed 6-7% return, even in a bear market, but certainly no higher. I'm not saying it's bad as part of your portfolio - if the JSE crashes, this one will probably be the best to have, but I'm just wondering if you have a bleak outlook on the economy this coming year? This one can sometimes be frustrating as it will take you over three months just to recover your fees, due to its straight line 0.5% per month return. I bought it once and regretted it and sold it after a few months for a few cents above what I bought it for.

7) For your local mix, also have a look at STXQUA (Satrix Quality Portfolio) which has done remarkable well since its inception compared to the other indices, and is a different basket of companies from the above, chosen on performance rather than market capitalization.

8) In general, Satrix is expensive with fees compared to others such as Ashburton or Sygnia. If you decide to go for STXWDM rather than ASHGEQ, then have a look at SYGWD as a cheaper alternative.

Overall, though, it looks good.

With your preferences I'd go for:

Local:
CTOP50
STXIND
(And maybe STXQUA also with your mix to balance performance and market cap.)

Global:
ASHGEQ (or STXWDM or SYGWD)
STXEMG
GLPROP
SYG4IR

That's my 2c...

#18
So I updated/rebalanced my TFSA:

STXQUA: 35%

STXWDM: 40%
STXEMG: 10%
PTXTEN: 15%

More consolidated and to the point Smile

Took a bit of a "gamble" on STXQUA. But when I saw the constituents and that a lot of them are in that share portfolio I put together I thought "why not" Tongue
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#19
I think your STXQUA gamble might just pay off. When Naspers and Steinhoff crashed, STXQUA stayed very green. It has a lovely mix of companies and I personally think it has a bright future.

I see you've dropped SYG4IR. It's done dismally since inception. I hope it recovers soon, but I am disappointed so far.

#20
(01-09-2018, 10:04 PM)SaurusDNA Wrote: I think your STXQUA gamble might just pay off. When Naspers and Steinhoff crashed, STXQUA stayed very green. It has a lovely mix of companies and I personally think it has a bright future.

I see you've dropped SYG4IR. It's done dismally since inception. I hope it recovers soon, but I am disappointed so far.

NPN crashed? NPN tracks tencent and the ZAR strengthened

#21
(01-09-2018, 10:35 PM)Bundu Wrote: NPN crashed? NPN tracks tencent and the ZAR strengthened

Yes, I suppose so.

I was just thinking that I might have too much in global ETFs at the moment. If you consider that Naspers is already a rand hedge, I might have too little locally.

Most of the ETFs are red because I've just re-balanced and sold my duplicated ETFs to buy new ones, but I'm hoping it won't take too long for them all to turn green...

JSE Finance Forum Attachment - Filename: Capture.JPG   

If you don't count the rhodium, I have 70% global and 30% local. Too much global?

#22
Consolidating and rebalancing my TFSA like this easily cost me about 0.5% of my portfolio. Transaction fees are a real bitch but luckily EasyEquities is cheap. Imagine you did that on OST or FNB etc.

SYG4IR...well I've sold it off now so chances are it'll skyrocket. It just doesn't have a place in my portfolio since I don't want my offshore exposure too fragmented. Almost went ASHGEQ instead of WDM+EMG for the same reason.
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#23
And I picked STXWDM over SYGWD because there's something about Sygnia managing ETFs that just doesn't feel right unless you use it via their Alchemy platform.
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#24
(01-06-2018, 04:52 PM)SaurusDNA Wrote: With your preferences I'd go for:

Local:
CTOP50
STXIND
(And maybe STXQUA also with your mix to balance performance and market cap.)

Global:
ASHGEQ (or STXWDM or SYGWD)
STXEMG
GLPROP
SYG4IR

That's my 2c...

So I have done some more reading and some more dart-throwing...Think I am going to move my stuff around and structure my portfolio as follows:

Local:
INDI25 - 20%
STXQUA - 20%
PTXTEN - 5%

International:
STXWDM - 20%
STXEMG - 20%
SYG4IR - 10%
GLPROP - 5%

Not sure if I am a bit light on property but I think this is a nice spread.

#25
(01-10-2018, 02:13 PM)The Local Tourist Wrote: So I have done some more reading and some more dart-throwing...Think I am going to move my stuff around and structure my portfolio as follows:

Local:
INDI25 - 20%
STXQUA - 20%
PTXTEN - 5%

International:
STXWDM - 20%
STXEMG - 20%
SYG4IR - 10%
GLPROP - 5%

Not sure if I am a bit light on property but I think this is a nice spread.

I think this is a really good mix now. Looks well balanced with great potential.

I think this year will be an excellent one for STXQUA, STXEMG and INDI25 in particular, so I like the higher percentages that you've allocated to these right now. You could always buy more property in the future when it starts to pick up.

#26
(01-10-2018, 02:22 PM)SaurusDNA Wrote: I think this is a really good mix now. Looks well balanced with great potential.

I think this year will be an excellent one for STXQUA, STXEMG and INDI25 in particular, so I like the higher percentages that you've allocated to these right now. You could always buy more property in the future when it starts to pick up.

I had the same thought on the property front, keep it in the mix with the potential of increasing it in future.

#27
So, another quick thought.

I have some extra funds in my bond and I am contemplating taking out R33k and filling up my wife's TFSA account. I think there is a bit more longterm benefit and I plan to replace the funds I take out of my bond in a relatively short period after Feb.

So, this is the split in my account:
Local:
INDI25 - 20%
STXQUA - 20%
PTXTEN - 5%

International:
STXWDM - 20%
STXEMG - 20%
SYG4IR - 10%
GLPROP - 5%

The idea is to build up something slightly different in the second account which will allow for even more diversification. From some of my old notes I am somewhere here:

CTOP50
ASHT40 (or satrix)
PTXTEN

ASHGEQ
SYGWD

I am looking for some more international ones though. Think the two that I have selected overlap too much. Maybe I should keep ASHGEQ and add STXEMG, even though it is in my portfolio as well I think it is a great ETF.

Any thoughts or recommendations?

#28
Great idea. The market has returned roughly 15% year on year since forever, which is higher than the average bond rate. That, together with the tax savings, in my opinion, topping up your wife's TFIA is the way to go.

It's an interesting mix you've chosen there. I think I see what you're trying to do. You've matched the market cap weighted indexes with the equal weight indices to balance growth vs risk. The portfolio you've chosen for your wife is rock solid, and should certainly match the market. I like the way you're thinking with your choices - I haven't actually thought of mixing ETFs up this way before.

With the choice between ASHT40 and STX40, ASHT40 is much cheaper than STX40 for the exact same index. The TER for ASHT40 is 0.19% and for STX40 it's 0.45%. That means SATRIX is more than double the costs for the same index! Compounded over 25 years, the difference equates to a lot of money. For this one, ASHT40 beats STX40 hands down. Plus, you already have a lot of SATRIX in your portfolio, and it's always good to balance your brokers too, just in case...

To compliment your own portfolio, which already has STXWDM, I'd definitely go for ASHGEQ. ASHGEQ basically tracks the global market 100% and is the most solid of all the global ETFs and will match the global market pretty much 100%, However, to beat the market just a little, and since you already have STXWDM in your portfolio, I think I'd add STXEMG and STX500 (the S&P500 index, which has outperformed the global market for years) to add some extra USA exposure. Since 2015, emerging markets have had better growth than developed markets, with EMs having 4.5% GDP and DMs having only 2.25%. Much of the EMG success is due to China. Some analysts think China won't be able to sustain their growth, but others say China is the way of the future. I think your choice of adding EMG here as well should depend to some extent on how you think China will do.

Maybe consider:

Local
CTOP50
ASHT40 (NOT satrix in this case)
PTXTEN

Global
Some global mix suggestions:

Mix 1:
ASHGEQ (Globally balanced + some emerging markets)
STX500 (USA S&P500)
STXEMG (Emerging Markets)

Mix 2:
SYGWD (60% USA + some global)
STXEMG (Emerging Markets)
SYGJP (Japan) and/or SYGEU (Euro stocks)

Mix 3:
ASHGEQ (Globally balanced + some emerging markets)
SYGWD (60% USA + some global)
SYGJP (Japan) and/or SYGEU (Euro stocks)

Mix 4:
Only ASHGEQ, since it really is well balanced.

#29
There's no point having both ASHT40 and CTOP50 in the same portfolio. CTOP50 contains all of ASHT40 plus 10 extra. You'll be paying duplicate trading costs etc. for the same stuff. Of those, I'd keep CTOP50.

You can have more diversification buy adding ASHMID to the mix.

Although a bit more different I feel the same about STXWDM and ASHGEQ. Rather pick both STXWDM+STXEMG or just ASHGEQ.
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#30
Today is a perfect example of why CTOP50 is better than STX40.

The all-share index gained 0.10% today, but the top 40 index dropped by 0.03%, purely because Naspers dropped 1.41% during the day. 

On the other hand, the CTOP50, which has a cap of 10% on any stock, gained 0.28%. Same shares as T40 (+10) but with more equal weightings.

With Asian markets faltering in the last few weeks, I'm so glad I have CTOP50!






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