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I've conducted an informal experiment today and thought it interesting enough to share here.

I hold an ETF-only portfolio on EE in four diverse ETFs.  I save remaining money distributed evenly in these monthly.  I considered broadening my portfolio to contain more ETFs but wanted to first see the difference in brokerage commissions.

I used the demo account and bought 4 R1000 ETFs and compared the buy and sell costs with 1 R4000 ETF.  I bought everything (4X R1000 + 1X R4000) and then sold it immediately and repeated this exercise twice.  For good measure I bought and sold a third R4000 ETF.  ETFs were chosen at random. 

In terms of brokerage costs alone I saved a marginal R0.36 (0.01%) by only buying and selling one specific ETF compared to 4 different ones.  However, The buy and sell spreads made a startling difference:  On average I lost R38.46 (1.0%) more to the buy-sell spread when selling the four small ETFs (hence the repetition of the experiment - to consolidate this). 

One ETF: MAPPSG's R1000 investment was sold at only R650 and was removed from above calculations.

The take-home for me is:  Less, but better ETFs are key.  From now on I will evaluate and ETFs' buy-sell spreads in the demo account before considering its purchase.  This is why I would never day trade! 

I'd love to see somebody with an ABSA account replicate this perhaps?  I can provide raw data if required.  What are your experiences/ strategies for your passive investing accounts?

EZ

Thanks Moneychief, your buying and selling strategy sounds like a good plan!  I'm considering to only buy 2/4 every month based loosely on the same criteria.

At some stage in the future I will check if the Expense ratio and the spreads are linked.  I suspect its rather linked to liquidity, because my experiments points out that the spread is higher on average when selling four small holdings, opposed to one big one.  MAPPSG is presumably not a popular ETF to buy and sell.  Obviously this leaves a lot of questions, which we can investigate in the future. 

EZ

On the other hand, when you hit sell or buy on EE it happens immediately and you don't have to wait for your limit order to be executed.

I have my ABSA TFSA at the ready though. When we can start moving (one day...hopefully) I might just do it since I transact maybe a handful of times during the year on it.