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Author Topic: DOES ANYONE HAVE A BOND ETF IN TFSA ?  (Read 12800 times)

jonb

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DOES ANYONE HAVE A BOND ETF IN TFSA ?
« on: August 01, 2016, 05:15:10 pm »
For some reason I have been looking at putting a small 10% element of bonds into my TFSA

Looking at Ashburton Inflations ETF or Newfunds Govi

Anyone have any opinions on those two or on including bonds into TFSA as a solid building block ?

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Moonraker

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Re: DOES ANYONE HAVE A BOND ETF IN TFSA ?
« Reply #1 on: August 01, 2016, 06:09:41 pm »
Quote from: jonb on August 01, 2016, 05:15:10 pm
For some reason I have been looking at putting a small 10% element of bonds into my TFSA

Looking at Ashburton Inflations ETF or Newfunds Govi

Anyone have any opinions on those two or on including bonds into TFSA as a solid building block ?
Well, if you think bond yields will go down further from where they are now over the next year or so, then by all means as you will get capital appreciation.
On the other hand should you think yields will rise, you will have capital depreciation but due to reinvestment of interest this will to some small extent be smoothed out.

If you see the bond yields hitting the lows of 2013 you will be rather pleased.


South Africa Government Bond 10Y decreased 0.095 percent or 1.09% to 8.65 on Friday July 29 from 8.75 in the previous trading session. South Africa Government Bond 10Y changed -1.59% during the last week, -1.14% during the last month and +4.85% during the last year. Historically, the South Africa Government Bond 10Y reached an all time high of 20.69 in August of 1998 and a record low of 5.77 in May of 2013.

« Last Edit: August 01, 2016, 06:15:20 pm by Moonraker »
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Orca

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Re: DOES ANYONE HAVE A BOND ETF IN TFSA ?
« Reply #2 on: August 01, 2016, 07:46:42 pm »
Yes....We all have a moment of madness. I don't know much about bonds due to low yields but would you not get more if you held it in cash at the JSE?
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Hamster

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Re: DOES ANYONE HAVE A BOND ETF IN TFSA ?
« Reply #3 on: August 01, 2016, 07:47:50 pm »
If I'm not mistaken, inflation linked bonds ETFs like NFILBI are not subject to capital gains tax...or something like that.

Regardless, I wouldn't bother with it inside my TFSA. Put dividend yielding and high growth stuff in there and take full advantage of the tax benefits.
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jonb

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Re: DOES ANYONE HAVE A BOND ETF IN TFSA ?
« Reply #4 on: August 02, 2016, 10:34:24 am »
Quote from: Moonraker on August 01, 2016, 06:09:41 pm
Quote from: jonb on August 01, 2016, 05:15:10 pm
For some reason I have been looking at putting a small 10% element of bonds into my TFSA

Looking at Ashburton Inflations ETF or Newfunds Govi

Anyone have any opinions on those two or on including bonds into TFSA as a solid building block ?
Well, if you think bond yields will go down further from where they are now over the next year or so, then by all means as you will get capital appreciation.
On the other hand should you think yields will rise, you will have capital depreciation but due to reinvestment of interest this will to some small extent be smoothed out.

If you see the bond yields hitting the lows of 2013 you will be rather pleased.


South Africa Government Bond 10Y decreased 0.095 percent or 1.09% to 8.65 on Friday July 29 from 8.75 in the previous trading session. South Africa Government Bond 10Y changed -1.59% during the last week, -1.14% during the last month and +4.85% during the last year. Historically, the South Africa Government Bond 10Y reached an all time high of 20.69 in August of 1998 and a record low of 5.77 in May of 2013.


Thanks for this,

If you look at attached results YTD in NFGOVI, pretty good versus average returns in other TFSA vehicles

A lot of people advise using as a building block in a portfolio, I know the vanguard total bond I have a small position in international portfolio works well when stocks go down or sideways... I guess a safe haven and a bit like gold without the volatility ?

I know its terrible to look at past performance, however , i do feel case for raising interest rates has lost some ground over the remaining year and with outside money looking for yield this might not be such a bad idea?

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czc

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Re: DOES ANYONE HAVE A BOND ETF IN TFSA ?
« Reply #5 on: August 02, 2016, 11:23:00 am »
Surely you get better yield with a dividend equity than bonds?
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jonb

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Re: DOES ANYONE HAVE A BOND ETF IN TFSA ?
« Reply #6 on: August 02, 2016, 11:38:16 am »
yeah, sure in Long term this will probably ring true, I was just interested if anyone saw bonds as a decent building block, look at it as something to smooth out your total portfolio

For example your dividend paying ETF runs through a tough time for Q3 and Q4 however bonds being a safe haven for volatility surge ahead, so instead of having all your cash in one vehicle you balance it a bit with the vision of year on year having a more balanced approach?

A kind of anti equity hedge that is not as volatile as gold :) 

I like the call out of @Moonraker saying just keep in cash getting 6-7% ... my problem with that is I will use that cash! i cant keep cash as am always scanning possible buys  :P






Quote from: czc on August 02, 2016, 11:23:00 am
Surely you get better yield with a dividend equity than bonds?
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