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Author Topic: Stockpicking or ETFs  (Read 9010 times)

Patrick

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Stockpicking or ETFs
« on: July 27, 2015, 12:44:06 pm »
So, I quite like this debate as my brother in law is an analyst for a fund management firm. I've written about why I think they're a waste of cash before (http://investorchallenge.co.za/those-fees-are-blatantly-robbing-you/), but now the head of sygnia has jumped in with a great article, also in favour of passive investing: http://www.moneyweb.co.za/investing/unit-trusts/arguments-against-passive-investing/

Is there anyone here who still considers units trusts a decent investment?

Maybe a different question, but how many people here think they can beat the index over a decent period of time?
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Orca

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Re: Stockpicking or ETFs
« Reply #1 on: July 27, 2015, 01:56:34 pm »
Strange that you post that as I have just a minute ago watched a new video on the JSE Power Hour, which Gareth Stobie of Core Shares did for Simon Brown. He spoke on smart beta, costs and performance, as well as covering some of their product range.
He specifically spoke about Passive Investing vs Active Investing and did the sums of costs and tax involved,

It is a no brainer that most active investors will not beat the "smart beta" index funds over time. Sure, I can beat the index 50% of the time but for how long? I will be forced to sell before the 3 year holding period if the stock goes sour and then pay fees and income tax. On the other hand, if the stock falls out of the ETF, there will be no broker fees nor will it trigger a tax event..

http://www.justonelap.com/webinarDetail.asp?intWebinarID=273&utm_source=NL&utm_medium=email&utm_campaign=jul
 
« Last Edit: July 27, 2015, 02:17:41 pm by Orca »
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Mr_Dividend

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Re: Stockpicking or ETFs
« Reply #2 on: July 27, 2015, 02:47:16 pm »
Quote
Maybe a different question, but how many people here think they can beat the index over a decent period of time?

Mind mind says that it should be fairly simple: pick the best performing share in each sector and there you go. It's doesn't have to be the best ether, just above the mean average for that sector. I do realise though, it's not as easy as that - but shouldn't be that hard ether.

I guess you mean the overall index. The overall indes does not pay out a decent enough dividend yield for me - so I compare the Satrix Divi ETF - which has been fairly easy to beat - mainly by not including miners, Abel and builders. I also like that when I did my "mix" I could include some higher growth/lower initial yield (RMI/MPC/CPI) with some boring, but higher paying yields from REITS (SAC, ARA, Fortress A) - instead of JUST divi Yields above say 4.5%

My first full year of "settled" funds will be end of August - so will then compare vs. Index and vs. STXDIV - (although I know my yield is better, round 1 to me  >:( )
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Orca

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Re: Stockpicking or ETFs
« Reply #3 on: July 27, 2015, 04:34:15 pm »
@Mr_D. I don't agree with the STXDIV as your index as you are merely beating the growth of the index and not the dividends produced by the ETF.
Beating the growth of STXDIV could be done with darts chucked at the top 100. One cannot look it's performance and state that you are beating it.

I always use the STXIND as my index to beat.

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gcr

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Re: Stockpicking or ETFs
« Reply #4 on: July 27, 2015, 04:56:17 pm »
Gee guys - what a difficult way to map out how you are going to beat the index
Me I prefer to look at the tea leaves in my mug once a quarter and then make decisions :LHST:
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Mr_Dividend

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Re: Stockpicking or ETFs
« Reply #5 on: July 28, 2015, 08:49:15 am »
@Mr_D. I don't agree with the STXDIV as your index as you are merely beating the growth of the index and not the dividends produced by the ETF. Comparing both, that is why I chose the ETF most aligned with my portfolio.
Beating the growth of STXDIV could be done with darts chucked at the top 100. Depending where those darts land, you could beat any ETF One cannot look it's performance and state that you are beating it. Sorry, but why can't I??

I always use the STXIND as my index to beat.
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