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Your TFIA/TFSA

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I believe in buy/hold when it comes to investment. I have the following three funds in my TFSA portfolio:

 

60% DBXWD

20% PTXTEN

20% STXILB

 

I max out my allowance over three months ("dollar cost averaging") and re-balance all my investments yearly to maintain my AA.

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I believe in buy/hold when it comes to investment. I have the following three funds in my TFSA portfolio:

 

60% DBXWD

20% PTXTEN

20% STXILB

 

I max out my allowance over three months ("dollar cost averaging") and re-balance all my investments yearly to maintain my AA.

 

What made you decide to buy STXILB?

I had a look at them, but could not make myself a compelling enough case to buy it.

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What made you decide to buy STXILB?

I had a look at them, but could not make myself a compelling enough case to buy it.

 

I could have probably gone with a money market account, but I wanted to keep the TFSA itself balanced as well according to my AA. That way I can manipulate my taxable investments without having to chop and change the TFSA as well. So that leaves normal bonds and inflation linked bonds. I don't want bonds for growth, I want them to help me sleep at night when 2000 or 2008 happens again and the market drops by 60+%. So I am not concerned about the yield, but it would be nice if they at least beat inflation (hence inflation linked bonds).

 

The two main alternatives to STXLIB are the Ashburton Inflation ETF (ASHINF) and NewFunds/ABSA ILBI (NFILBI). STXILB is a total return fund like NFILBI, so interest/coupons are reinvested automatically. STXILB will (probably) do that for less cost than NFILBI (~0.6%). At the moment the transaction cost for STXILB is unknown due to its age, but the TER is 0.25% vs ABSA's 0.43%. Although they don't track the same index, the holdings are virtually identical.

 

Bond funds are normally difficult to choose - I will have a look again next year when I re-rebalance and invest for 2018.

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my TFSA's are both 100% cash as of yesterday. Waiting for a pull back....patience needed! :)

 

BTW - getting 4.79%(yearly) percent paid daily on EE - will be a bit more as it's compounded daily.

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my TFSA's are both 100% cash as of yesterday. Waiting for a pull back....patience needed! :)

 

BTW - getting 4.79%(yearly) percent paid daily on EE - will be a bit more as it's compounded daily.

 

Interesting, which ETFs?

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For the moment I am just trading my ETF's on support/resistance. So more looking at liquidity. But I do try to have at least two in distinct sectors - so could be Indi + resources or property. looking at around a 4 - 8% on each trade Risky, as i know need a pull back and if the market takes of, will be in the @#[email protected] But i have 100% confidence that our politicians will have something to say that will kill the market - just need to wait. BTW since march am now 18.5%.

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CoreShares PropTrax Ten

+4.80%

CoreShares S&P Global Property Exchange Traded Fund

+3.52%

CoreShares Top 50

-2.21%

Satrix MSCI Emerging Markets ETF

+5.94%

Satrix MSCI World ETF

+5.06%

Sygnia Itrix MSCI World ETF

+10.70%

 

 

Now let's hope Trump and Rocket Boy don't crash the offshore markets...

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CoreShares PropTrax Ten

+4.80%

CoreShares S&P Global Property Exchange Traded Fund

+3.52%

CoreShares Top 50

-2.21%

Satrix MSCI Emerging Markets ETF

+5.94%

Satrix MSCI World ETF

+5.06%

Sygnia Itrix MSCI World ETF

+10.70%

 

 

Now let's hope Trump and Rocket Boy don't crash the offshore markets...

 

That is quite motivating! 

 

Does the ETF reflect as Sygnia's in EasyEquities?

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So as things stand now and for this year*:

 

Offshore (50%)

STXWDM: 40%

STXEMG: 10%

 

Local (50%)

STXQUA: 35%

PTXTEN: 15%

 

We're looking at buying a house and also planning a wedding so I might stop my TFSA contributions for 2018. I'm happy with the makeup of it at the moment but I'm toying with the idea of moving it when our finance minister (whoever it may be) gives the go-ahead. The biggest reason being that after three years of maxing out my TFSA contributions it is getting to a sizable value which I do not really want on the TFSA platform.

 

Option 1: Move it to ABSA Stockbrokers. The only problem here is that it is a manual process. I cannot schedule a debit order and let it execute at market buys. So no "auto pilot" mode which kind of sucks.

 

Option 2: Move it to Allan Gray and invest via unit trusts. Will need to keep costs in check though.

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I've just set my future TFIA payments for the year, and my R33000 per year split (R2750 p.m., although I'm hoping it will increase from March) will be as follows:

 

Local (37.5%)

STXIND:  12.5%

STXQUA:  12.5%

CTOP50: 12.5%

 

Offshore (62.5%)

STXEMG: 19.0%

ASHGEQ: 18.5%

GLPROP: 12.5%

SYG4IR: 12.5%

 

 

My rationale is as follows:

 

I went only 37.5% in local ETFs as my stocks portfolio is mainly in local shares, and over 25 years, I like the diversification of global markets.

 

STXIND: It excludes banks and mines, so is largely unaffected by the Rand value or political noise. It performs purely on the value of its companies. Also, it's been the top ETF averaged over 10 years, and I don't see any reason for it to be any different in the future.

 

STXQUA: A new ETF. Great companies, chosen for quality rather than market cap. High dividends as well as growth, so the upward trend should remain constant, ever in a bear market. Might underperform the T40 in a prolonged bull market run though, since it focuses more on dividends than growth, but should outperform the T40 in a fluctuating market. Still, so far, since inception, it has outperformed T40 on growth too, so I'm not complaining!

 

CTOP50: Companies chosen for market cap (long term stability) as the third prong of my local shares balance. Since I have STXIND, I did not want to duplicate my massive exposure in the top 5 like Naspers by having STX40 as well, so I went for a more equally weighted ETF here to balance out the INDI. I don't like the strictly equal weight ETFs like CSEW40 because they lose out on extended bull runs because companies in these ETFs are not allowed to exceed 2.5% even if the share sky-rockets by 1000%, but this one (CTOP50) has more flexibility than strict equal weight ETFS while minimizing any risk.

 

STXEMG: I think emerging markets will outperform developed markets in the next 10 years. Hence the highest allocation to this ETF.

 

ASHGEQ: ASHGEQ rather than S&P500, because there's too much instability in the US at the moment. I'm worried about Trump and the political situation with North Korea. ASHGEQ may slightly underperform the S&P500 (or it may do better), but at least my money's safe!

 

GLPROP: Had to have some property...

 

SYG4IR: My high-risk ETF. It may never take off, or it has the potential to sky-rocket. This is my 12.5% gamble that may lose me 12.5% or may make me very rich!   :-)

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Option 1: Move it to ABSA Stockbrokers. The only problem here is that it is a manual process. I cannot schedule a debit order and let it execute at market buys. So no "auto pilot" mode which kind of sucks.

 

Option 2: Move it to Allan Gray and invest via unit trusts. Will need to keep costs in check though.

 

For TFIA, almost all the stockbrokers charge a standard 0.25% fees per purchase. OST for TFIA is no more expensive than any other and is very good. Only its trading platform is more expensive, but for TFIA, it's also worth considering.

 

Unit trusts are still far more popular than ETFs in this country, but abroad, ETFs are more popular because they are constantly outperforming Unit trusts, because they allow intra-day trading while unit trusts don't. I have a feeling if you stick it out, your Allan Gray and Alexander Forbes are going to go the ETF way of long-term investing as well.

 

I prefer Option 1, but it will cost you a percentage or two of your already existing portfolio if you move (once it's allowed of course). Why not, for now, keep your Easy Equities as they are and contribute there until end of February to keep the accounting simple, and then start your new tax year's TFIA from 1 March onwards putting your money into a TFIA at ABSA or OST until the move is allowed?

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I'll probably keep it at EE until we are allowed to move it. Not keen on splitting it up.

 

SYG4IR has done exactly nothing but go down. High risk, sure, but even with exchange rate fluctuations it just does nothing. I'm too impatient :D

 

Yes, SYG4IR has been very disappointing so far, but I'll keep buying for another year and see what happens.

 

I have a feeling your PropTrax 10 will have a record year, since SARB may cut interest rates several times this year. I'd love to have it in my portfolio too, but I'm out of space!

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Mine's down 4.36%. The plus side is that I'm not planning to sell any time soon, so I consider this a plus in the long run as I can buy cheaply now.

 

I'm trying to buy as much as I can while the price is rock bottom.

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