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Author Topic: Investment pointers 2015  (Read 8821 times)

jonb

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Investment pointers 2015
« on: January 22, 2015, 02:31:27 pm »
Hello to the forum!

I have held a portfolio in Allan grey balanced for around 5 years now and have been adding to it over this time

2012 and 13 did great and I hardly worried however I noticed for 2014 especially toward the end of the year I lost and my yearly growth was pretty low.

I work abroad in the Netherlands so not always easy to go visit an adviser plus want to keep costs to a minimum! Something, maybe intuition is pushing me to re-look this investment stratergy and perhaps look at some other options especially in the year ahead which might be a tough one in SA.

Can any one give some pointers on

A) investing on this side instead in a balanced type retail offering and taking money out AG SA to do so ?

B) rather diversify out of AG balanced and spread across some other funds ( Bonds, Equity, Balanced ) perhaps in other investment houses ( Satrix, coronation )

C) sit tight and hold on AG balanced is a decent place just carry on saving  :whistle:

I know investment advice is taboo, but to be honest out here it super difficult to get anybody to bounce ideas off

Hope i am in the right place!!

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jonb

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Re: Investment pointers 2015
« Reply #1 on: January 22, 2015, 02:33:59 pm »
And a last option I forgot to add!

Sit in some safe option like fixed deposit and earn the 6-7% in a relatively "safe" way ?

I know a lot might say why not pull it out and invest in EU or US,

Thing is those markets are foreign to me and for some reason SA just feels safer ??  :wtf:
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Neil

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Re: Investment pointers 2015
« Reply #2 on: January 22, 2015, 03:24:04 pm »
Well the the question you need to ask yourself is: Do I want to pay Capital Gains Tax? If you dont want to, and you have a long term investment horizon (5-10 years or more), then leave it where it is, markets are volatile by nature. If you have a short investment horizon (less than 5 years) then definitely move it to something safe, like a dollar denominated Gilt fund or something like where your risk is low and you are getting a real return of greater than 1% or so.

When I say "long term investment horizon" I mean that you are like 30 years old where you only plan on using that money in the next 20 years or so. "Short term investment horizon" I mean that you like 55 years old and you look to use that money in the next 5 or so years.



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Disclaimer:The views/opinions expressed in this post are that of the writer and are not to be interpreted as advice, nor as a indication to buy/sell any investment or equity. The writer will not be held liable for any profit or loss resulting from reading of this post by the reader in any form.

NakedPeanut

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Re: Investment pointers 2015
« Reply #3 on: January 22, 2015, 03:43:11 pm »
Like Neil said, markets are volatile and it depends on your investment horizon.

I feel if you move it now, you need to consider:
Funds average a certain performance over a couple years, thus it varies each year.
Last year was quite crappy, especially from a top40 perspective if i look at my holdings.
You could be selling low and buying high in another fund.

Thus I'd probably keep the money there.
But there are obviously other things to consider like changing circumstances, appetite for risk etc.
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jonb

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Re: Investment pointers 2015
« Reply #4 on: January 22, 2015, 04:17:59 pm »
Really appreciate that feedback  :TU:

Get both points, expect don't really understand the capital gain tax point. How can you avoid this by holding out longer ? i will pay this whenever i sell out right ?

Is it worth diversifying within a investment house ( for example splitting investments between a few funds ) rather than holding in one balanced product?

Or is balanced spread enough?

Thanks again, this is great getting some feedback!
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Orca

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Re: Investment pointers 2015
« Reply #5 on: January 22, 2015, 04:42:22 pm »
Are you directly with Allan Grey or via PSG, Orbit etc? If directly, you are paying 1,5% management fees pa for a small account and 1.0% for a large account. With PSG you pay less for the exact same "AG Balanced Fund A" ie 0.9% pa. this makes quite a difference if your gains are low and invest long term.
Your fund has made 7.6% the past year and this excludes your management fees. This is not bad as the ALSI has done 5.5% over the same period.
Here is a chart of your UT. Looks very similar to the ALSI and the Top40 charts. Your UT is a high equity fund and a similar one with Coronation Industrial Fund consistently does 20% pa and the chart for this same period did not flatten out like this chart.
If you are not directly with AG, you can easily transfer to any other fund.
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jonb

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Re: Investment pointers 2015
« Reply #6 on: January 22, 2015, 04:54:16 pm »
HI Orca

Thanks for the info, makes a lot of sense. Had no idea about PSG being 0.9 vs 1.5. yes I am direct with AG.

My question i guess was is it worth pulling out of the investment now to get a better rate or is it correct in thinking as nakedpeanut ( :LHST:) above suggests you would lose by selling out and buying in again on a different fund

Or am i to believe its easy to change investments providers ( example AG to PSG ) without to much issue ( you would pay capital gains right ? )

And yeah, Coronation IND fund and others perform higher pretty regular... in someone who knows markets .. the returns a balanced fund such as AG has been giving me ... is there better out there in a stable package ?

Last question! AG BF did 7.6 last year ... excluding fees .. are you sure ? so in reality it was like 6%? I could have been in Capitec or a bond for 7.25 for the year
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Orca

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Re: Investment pointers 2015
« Reply #7 on: January 22, 2015, 05:20:56 pm »
Here is a link to play around with. http://www.equinox.co.za/unittrusts/funds/fundresults.asp?func=perf
Click on "Performance" and chose "5 Years" as you would want stability.
Take note that Coronation Industrial Fund was 20% this year but averaged 40% pa the past 5 years.
Also note the "Risk Clock" top LHS for every UT. Yours is moderate to high. Not bad.

Not sure about your situation. Are you emigrated from SA or never been a citizen?
In my case, I emigrated so pay no Capital Gains Tax to SARS if I sell now.
« Last Edit: January 22, 2015, 05:23:15 pm by Orca »
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jonb

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Re: Investment pointers 2015
« Reply #8 on: January 22, 2015, 05:31:46 pm »
awesome, will play around on equinox site. thanks for the tip!

I have been in their Netherlands for 2 years now. I hold dual citizenship for SA and UK/EU

So is growing the investment in SA and then pulling across here an option ?

Are you in Portugal ? Nice if so .. best place in Europe in my opinion!
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Patrick

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Re: Investment pointers 2015
« Reply #9 on: January 22, 2015, 06:17:12 pm »
Fees add up fast, so try your best to keep them as low as possible. There an article in the insufficient blog about that. On another note, if you're not staying in Sa and therefore not paying tax here it shouldn't matter when you sell tax wise.
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jonb

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Re: Investment pointers 2015
« Reply #10 on: January 22, 2015, 06:25:50 pm »
Hi Patrick, Thanks for that... re: Fees yes I am just learning that now! It really is not clear to be honest!

DO you have a link for that article ? tried to Google it with no luck

If I sell Then I still have to declare to SARS right ? I still do a tax return yearly even though not living in SA
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Orca

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Re: Investment pointers 2015
« Reply #11 on: January 22, 2015, 06:30:14 pm »
Not the most scenic but Portugal has the best climate.

If you sell now you would be liable for Capital Gains Tax at 33.3% of your gain. Deduct R30k  as an exclusion before hand.

On the otherhand, if you are not taxed in SA being under the threshold, you would have to add the CGT to your Netherland taxable income as most countries tax you on worldwide income.

Whatever tax you might pay to SARS, you will get credit for in the Netherlands.   
« Last Edit: January 22, 2015, 06:48:50 pm by Orca »
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Orca

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Re: Investment pointers 2015
« Reply #12 on: January 22, 2015, 06:39:07 pm »
To add to this. If you are a resident of the Netherlands for tax purposes, you can get an international certificate of residence from your tax authority and send it to SARS. That will enable you to be exempt from tax in SA.
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jonb

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Re: Investment pointers 2015
« Reply #13 on: January 22, 2015, 06:56:25 pm »
Thanks for that, the equinox site is really interesting

I see there are a number of funds especially on Coronation which have fared well over the past 3 years including 2014

I know this is no indication of how its going to play out 2015 and forward
'
But doesn't it make sense to take out of one balanced fund and do a mix like industrial / financial and some more safer option like balanced and strategic income

This would give a better outcome right ?? I think brings me back to the original question

is it better to have one fund ( example AG balanced fund  )

Or split it over some funds in an investments house such as coronation who has different option to really tier your portfolio ?

I think that was my main query... as for the tax info you have given me , that is just a bonus to learn.. so thank you!
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Orca

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Re: Investment pointers 2015
« Reply #14 on: January 22, 2015, 07:12:33 pm »
Actually Patrick is quite correct about the tax. Non residents only pay CGT on property stocks if it holds more than 80% stake in fixed property. So you are good.
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