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SaurusDNA

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Posts posted by SaurusDNA

  1. Well, once again, Rhodium was on a different planet to everything else, with the 1nvest Rhodium ETF (ETFRHO) delivering growth of 187.1%. Originally, the reason for the stellar growth of Rhodium was the change from platinum catalysts to rhodium in the auto industry, but now I suspect that it is purely momentum. I wonder how long this can go on. Every year, I think the performance cannot be repeated and then each year is better than the last. It's kind of like Bitcoin at the moment. It could collapse at any time or could go past the moon.

     

    The top 10 performing ETFs in South Africa tracking market indices for 2020 were:

     

    SYG4IR:     68.1%     (Sygnia Itrix 4th Industrial Revolution Global Equity ETF)

    STXNDQ:     56.1%     (Satrix Nasdaq 100 ETF)
    ETF5IT:     49.9%     (1nvest S&P 500 Info Tech ETF)
    SYGUS:     26.3%     (Sygnia Itrix MSCI USA ETF)
    STX500:     24.3%     (Satrix S&P 500 ETF)
    STXEMG:     24.2%     (Satrix MSCI Emerging Markets ETF)
    SYG500:     23.8%     (Sygnia Itrix S&P 500 ETF)
    ETF500:     23.0%     (1nvest S&P 500 ETF)
    CSP500:     22.7%     (CoreShares S&P 500 ETF)
    STXWDM:     22.0%     (Satrix MSCI World ETF)

     

    Source: https://www.moneyweb.co.za/investing/etfs-investing/local-etf-returns-is-the-market-mood-shifting/

     

    Once again, SYG4IR has had amazing performance despite having many critics in the financial world. I think with ETFs, popular is good, and as long as it remains popular, it will keep growing. In a way, I think it's similar to Rhodium - growth can carry on for many years as long as there is momentum.

    Also, as predicted, STXNDQ did finally overtake ETF5IT. I personally don't like ETF5IT since roughly 40% is made up of just two companies - Microsoft and Apple. I just don't see how these two companies can continue repeating their stellar financial results of 2020 year after year, but then you never know.

    Interesting that all of them are offshore this year - Bandit was right with his prediction.

    So what are your predictions for 2021? My guess is that there will be a strong rebound in local property, but let's wait and see...

     

     


     

    • Like 1
  2. So I have been planning my Tax Free Investment Account portfolio for 2021 and this is what I've decided to buy in the year ahead in terms of my ETF picks:

     

    Composition:

    70% Offshore Equities

    20% Local Equities

    10% Local Property

     

    My portfolio will then look as follows:

     

    Offshore (70%):

    ASHEQF:      25%
    STXEMG:     25%
    STXNDQ:     10%

    SYG4IR:       10%

     

    Local (30%):

    STX40:          7%
    NFEMOM:     7%
    STXQUA:       7%  

    CSPROP:       10%

     

    The local picks may seem strange at 7% each, but I cannot decide between the three local equity ETFs. NFEMOM has done very well in terms of local ETFs and will probably continue to shine. STX40 contains the more resilient stocks that are most likely do perform best in difficult times. And STXQUA, well, I just love the composition of shares in the basket. My TFIA already contains ETFs in the composition above, so I'll just continue to buy in the same ratio.

     

     

     

    • Like 2
  3. It's that time of year again - albeit a very unusual year!

     

    So my personal top five stock pics for next year are as follows (in order):

     

    #1)  DGH   (Distell)  - This one's share price has been hammered by the lockdowns and stocks are dirt cheap. But drinking never stops and eventually, sales and profits always return. This company is also huge and very resilient. If I had to choose just one stock for the coming year, it would be this one.

     

    #2)  APN   (Aspen) - With an agreement to produce a COVID vaccine, the exposure to this company should be massive once they begin production.

     

    #3) PPC (PPC Cement) - This one is tricky, because they have a significant debt problem to solve. If they fix their debt problem, they could be at R6.00 by the end of 2021. If they don't, they could be at 60c. But this year has been fantastic for the company. They have increased profits and reduced debt considerably. If they keep it up, good things are in store for this company.

     

    #4) DCP (Dischem) - Dis-Chem has launched it's new innovative Clinic Connect - a  nurse-led healthcare system where nurses take your vitals and symptoms etc., and can video-chat a Doctor for a script should one be required, with clinic visits being substantially cheaper than Doctor visits, and you can still get a prescription. If this takes off, this could do wonders for the group.

     

    #5) SSS (Store-Age) - Largely unaffected by COVID, because people who rent storage keep renting the storage, even during tough times. With a dividend yield at over 8% and good financials, this one is bread and butter, even through terrible times.

     

     

    Other notable mentions:
    CML - Coronation

    L4L - Long4Life
    CPI - Capitec

    DSY - Discovery
    SRE - Sirius

     

     

    • Like 1
  4. Well, I started the year with a savings challenge too - I started with R10 in week 1, R20 in week 2, R30 in week 3 etc. straight into a Tyme bank account that I opened for that purpose. Was getting 9% earlier this year, now 6%. Still going strong - haven't missed a weekly payment yet.

     

    • Like 1
  5. For cellphones, you can download the free version of the TrueCaller App (from Google Play Store) that has very effective spam and advertising blocking capabilities. I've been using it for a few months now and I hardly get spam calls anymore on my cell phone.

     

     

     

    • Like 2
  6. I've had the same problem with DialDirect. They post me hard-copy adverts nearly every week, and almost daily spam in my inbox, with no unsubscribe option in their mails. I once e-mailed them and asked them to stop, but that simply (seemingly) increased the amount of spam I received. And this has been going on for years!

    • Like 1
  7. So ASHGEQ will suspend trading on 9 September and the ETF will be replaced with the Ashburton Global 1200 Equity Fund of Funds ETF (ASHEQF) (also launched on 9 September). This is the new feeder fund discussed in the previous post. (Source: ASHGEQ SENS announcement 1 September 2020)

     

    We shouldn't notice any immediate difference in our portfolios, I guess, except the change of code from ASHGEQ to ASHEQF.

     

     

     

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  8. Just a update on ASHGEQ: The proposed restructuring was approved by the majority of shareholders.This means that ASHGEQ will now become a feeder fund (owning the ETFs that make up the index rather than owning the individual companies). So while the index will remain exactly the same, the management costs and TER for ASHGEQ should now come down significantly.

     

    The individual constituents comprising the S&P Global 1200 Index are:

     

     iShares Core S&P 500 ETF
     iShares MSCI Europe UCITS ETF EUR Dist
     iShares S&P/TSX 60 Index ETF
     iShares Core TOPIX ETF
     iShares Asia 50 ETF
     iShares Latin America 40 ETF
     SPDR S&P/ASX 50 Fund

     

    (Source: ASHGEQ SENS announcement 11 August 2020)

    • Like 1
    • Thanks 1
  9. ASHGEQ is only 7% emerging markets. The other 93% is basically the same index as STXWDM anyway. What makes the ASHGEQ so attractive here is that the 7% emerging markets exposure is only the best emerging market companies in the world, so in addition to the 93% that is the same as STXWDM, you're getting a 7% of carefully chosen top performers as well, so out-performance is expected. I think most on this site, as well as Simon Brown and Kristia van Heerden from JustOneLap, prefer ASHGEQ to STXWDM. In fact, Simon and Kristia call ASHGEQ the "One ETF to rule them all" and mention on their website that if they had to put all their money into just one ETF, it would be ASHGEQ.

     

    Regarding local ETFs, there are two reasons why some local exposure is important:

     

    1) Most importantly, South Africa has higher inflation than the developed markets. This means higher growth. If a can of beans at Checkers costs R100 now and we have 6% inflation, next year, the can of beans costs R106, and the profit that Checkers makes goes up by 6%, so Checkers grows by 6%. Now, in a country with no inflation (Europe) or 1% inflation (US), that means a company similar to Checkers only grows by 1% because the price of their sales only increases by 1%. Over ANY 10 year period in history, South African market growth has been higher than the developed markets indices, simply because we have higher inflation. As long as the Reserve bank continues their inflation targeting policy at 4-6%, South Africa market growth is expected to be higher than foreign markets. Higher inflation = higher growth. For the same reason, that's why over the long term, emerging markets (which have higher inflation rates) always outperform developed markets. Don't be overly seduced by the high returns of the US in the past two or three years - there are short-term factors at play too - but as I have mentioned, choose any 10 year period in history, and South African growth is higher than the developed markets.

     

    2) South African share prices and growth don't depend on the value of the Rand. If the Rand weakens, your local shares stay the same and your foreign shares make money from the exchange rate. However, if the Rand strengthens, you lose on Foreign shares, but not on local shares. Hence, local shares decrease your downside risk if the Rand strengthens. In other words, local shares reduce your currency exposure risk.

     

    With regards to local ETFs, it's anyone's guess which ones will do best. Vanilla ETFs such as STX40 have probably been the ETF of choice up till now, but it has extreme exposure risk due to the heavy weighting of a few companies at the top of its constituent list. Smart Beta's like Coreshare's SMART just haven't lived up to their promises. And then globally, the momentum factor is consistently being shown to perform better than other ETF methodologies, so NFEMOM is probably not a bad choice. CTOP50 is an attempt at doing a top 50 without the concentration risk, which is probably also not a bad idea either.  But I think any combination of STX40/CTOP50 and NFEMOM is good.

     

     

    • Thanks 1
  10. A few things to think about:

     

    1) Why do you want to sell ASHGEQ in favour of STXWDM? A quick graph comparing the two may suggest that STXWDM is outperforming ASHGEQ, but this is not the case, since ASHGEQ pays dividends, but STXWDM does not. Despite the higher TER for ASHGEQ, the graph looks different once you plot the total return for both. In the graph below (since the inception of STXWDM), the dark blue line shows ASHGEQ before dividends. the light blue line is STXWDM total return, and the grey line is ASHGEQ total return (the return once dividends are included). The longer the time period, the better ASHGEQ has been doing compared to STXWDM (the grey line rather than the dark blue should be considered for the full picture).

     

    (Click on the graph to zoom)

     

    image.thumb.png.4689faf696d9ca60e38991752dab2976.png

     

    2) ETF5IT has had an amazing run in the past year. But just about 40% of it (39.33% to be precise) is made up of just two companies - Microsoft and Apple. Since a large chunk of this ETF's performance has been due to good annual returns of these companies for this year, the annual returns next year may look different, and then the ETF may perform very differently. On the other hand, SYG4IR consists of many smaller, newer, developing companies with (possibly) more potential for long term growth. Also, in STXNDQ, exposure to Microsoft and Apple is less at only 24%, giving a more well-rounded ETF. But I get your point - the two smaller ETF's having only 5% of your portfolio each feels like they are not making any difference, so you want to combine them into one. I'm not convinced that ETF5IT will continue to do better than STXNDQ or than SYG4IR going forward, but I may be wrong.

     

    3) Personally, I like the idea of going 20% with STXEMG. This ETF is one third China, and with emerging markets, the potential for (very) long term growth is massive. However, with this one, patience is the key. If you're planning to sell it in the next 15 years, you may as well just sell it now. This one is for the long haul, but has huge promise over the 15+ year period. Especially considering your new proposed portfolio has 70% in developed markets already, the 20% in STXEMG actually feels small. Interestingly enough, the ETFSA international portfolio product has 20% STXEMG in it.

     

    4) I see you want to drop your local exposure from 25% to 10% by dropping NFEMOM to 10% and by selling CTOP50 and buying foreign ETFs with it. If this is the case, then why not put the extra 5% each into SYG4IR and STXNDQ, making these 10% each, rather than going 50% STXWDM? Also, I assume you have sufficient local exposure in other products (pension/RA) etc. to warrant the drop here?

     

    5) Personally, I prefer your existing portfolio more than your new proposed one. However, if you do want to go only 10% local, if it were me, I'd do:

     

    ASHGEQ - 40%
    STXEMG - 20%

    GLPROP - 10%
    NFEMOM - 10%
    SYG4IR - 10%
    STXNDQ - 10%

     

    6) Importantly, don't make the mistake of selling the 5% NFEMOM just so your portfolio gets to its new percentage allocation quicker. If you are going to drop the allocation to 10% , just hold on to what you have and don't buy more until it's just 10% of your portfolio.

     

    7) P.S. Welcome to the forum!  

     

    • Like 1
  11. 16 hours ago, Bandit said:

     

    He's probably right but who cares - it's making me money 😛

     

    Agreed.

     

    SYG4IR invests in companies like Tesla, that has never had a profitable year and constantly loses money, but is growing at an amazing rate due to massive investment in the company. It may be true that it is not sound to invest in companies that are making a loss, but the growth potential here is phenomenal, and if Tesla becomes profitable one day, it may become the world's No. 1 company. I guess as long as this type of ETF doesn't make up the bulk of one's portfolio, or unless you have discretionary funds that you are willing to expose to some risk, it's definitely worth having some, in my opinion.

     

     

    • Like 1
  12. Once you've already got the bond, you're in a much better position to negotiate as it's much easier to move a bond than to get a new one.

     

    My Colleague and I approach the banks every five years to see if anyone's interested in our bond. Last year, my Colleague moved one of her properties that she has had for 5 years from a bank to SA Home Loans. They waived the admin fees, so the only fees my Colleague had to pay was the bond costs, and that they included in the bond. They dropped her interest rate by 2%, since she was above prime rate with the other bank.

    • Like 1
  13. Have you tried SA Home Loans? It's their business and in my experience they will beat any quote (at least from everyone I've spoken to, including my own experience.)

    My wife and I have a joint home loan and we're now paying 6.75% and that's with her having her own business (not salaried).

    • Like 1
  14. 20 hours ago, Anesu said:

    How about a 2020 update? 

     

    So this year, the markets have gone crazy, but not altogether bad from an ETF point of view. However, the more the markets do wild things, the more I've been inclined to go for vanilla ETFs.

     

    I think I've only made one or two big changes since last year, namely selling my Coreshare's SMART ETF in favour of the Satrix Top 40, and then reducing my allocation of property (CSPROP) from 25% to 15% (I didn't sell - I'm just not buying at the moment until it's less than 15% of my total portfolio.) I used the extra 10% allocation from property to buy Satrix Nasdaq (STXNDQ).

     

    So at the moment, most ETFs are doing really well, especially the foreign ones. My Tax Free investment portfolio and it's performance (total return) looks as follows:

     

    Local ETFs (Total 45%):

    10% Satrix Top 40 (STX40) - Performance in my portfolio: +0%

    10% Newfunds Momentum (NFEMOM) - Performance: +7%

    10% Satrix Quality (STXQUA) - Performance: -10% (Even though this is currently down, I don't want to sell this because I love the shares in this basket and see long term potential.)

    15% Coreshares Property (CSPROP) - Performance: -22% (Would be much worse if not for the massive dividends).

     

    Foreign ETFs (Total 55%):

    25% Ashburton Global 1200 (ASHGEQ) - Performance: +22%

    10% Satrix Emerging Markets (STXEMG) - Performance: +27%

    10% Satrix Nasdaq (STXNDQ) - Performance: +44%

    10% Sygnia 4th Industrial Revolution (SYG4IR) - Performance: +51% ( I know Simon Brown always slams this one as just being popular rather than having actual merit, but it's been my best performing ETF and continues to perform, despite the measly dividends. I don't think I'd be comfortable with it being more than 10% of my portfolio though.)

     

    Things that I've noticed that have happened in my portfolio this year:

    Foreign markets have vastly outperformed local markets this year.

    Emerging market are outperforming developed markets this year, despite COVID (to be expected in the long term, but surprising given the current pandemic.)

    Tech ETFs are outperforming everything else by far.

     

    Changes that I'm going to make: I'm going to buy some Satrix China (STXCHN) after its launch tomorrow, but I don't think I'll put it in my TFIA, as it would go against my diversification policy within my TFIA. But I'm definitely going to buy a fair amount of this ETF outside of my TFIA.

     

     

    • Like 2
  15. On 4/14/2020 at 2:16 PM, Dawood Essop said:

    Feedback requested:

    1. Is my tactical plan really that nonsensical/risky?

    2. I suspect that given the low The NF TRACI ETF will offer low returns given the current interest rates dive?

    3. Are there any other options/suggestions?

     

    image.png

     

    1. See my post above.

     

    2. The NFTRACI should be fairly constant over the short term since it consists of mixed term fixed deposits with predetermined interest rates. However, with the costs, it really isn't any better than a money market account.

     

    3. Tyme bank offers excellent interest rates depending on how long you keep your money there:
    6% interest from day 1,
    7% after 30 days,
    9% after 90 days.
    10% if you give 10 days' notice after 90 days.

    (According to their website.  I have some savings money there and have received these rates too.)

    • Like 2
  16. Hi

     

    Just a few things you may have missed:

     

    When buying or selling a share, you must pay brokerage and Strate fees, and VAT is levied on these costs.

    Then there is securities transfer tax of 0.25% which is levied on every transfer of a security (both buying and selling).

     

    The Newfunds Govi ETF is a total return ETF. All dividends are reinvested in the fund and not paid out, so the return you get is inclusive of dividends. Thus, dividends should be excluded from your calculation.

     

    Finally, the NFGOVI is still subject to volatility and isn't guaranteed like a bank account. It's now actually down roughly 4% since three months ago. Between 10 March and 24 March, it lost almost 24% of it's value. So you'd still be timing the market. I've included the three-month graph below. Also, past performance may be different to future performance since the downgrade to junk status changes the way in which government bonds may be traded in South Africa.

     

    I still think it's a great solid ETF for the medium term, but high risk over the very short term (as in your three months). I'm not sure I'd take that risk if I was planning on investing for less than a year. Especially now in these uncertain economic times where volatility is at an all-time high.

     

     

    image.thumb.png.bb85b75bff484708bd5a077a0121748b.png

     

    • Like 1
  17. 9 hours ago, e4et said:

    What are you guys doing with your TFSA's ?

    I saw Bandit cashed out.

     

    What are the rest of you up to ?

    Riding it out, or pumping more money into it ?

     

    I'm hodling (using bitcoin terminology). I haven't sold anything, and I will buy my R3000 TFIA on the 25th as usual. Rand-cost averaging, I suppose. It will go up again - it always does.

     

    You own the shares, whether high or low. You only make a loss if you sell low.

    • Thanks 1
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