The JSE and finance forum for South Africa
General Category => Shares => Topic started by: jonb on October 10, 2016, 01:57:37 pm
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Hi All
a real investor 101 question here!
For SA portfolio I am using Easy Equities portfolio and from what i can gather it is not possible to reinvest dividends
This means when I reinvest myself I pay more costs which in the long run costs the investor more and you lose the compounding effect
Does anybody have a way around this ? are there any investment products which automatically reinvest all dividends?
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I assume you mean it's not possible to have the dividends automatically reinvested. In general ETFs don't work like that while unit trusts do. With the ETF you will always have to spend money to re-invest, even if it's set to automatic like some brokerages do.
Fortunately with Easy Equities there's no minimum fee, so it doesn't make a difference whether you're investing a small amount of dividends or a large amount of capital. You pay the 0.25% fee both times.
With a regular ABSA stockbrokers account you'd pay the minimum R120 per transaction meaning a lot of the time you actually lose money reinvesting dividends.
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Thanks Patrick
thats really it for me , if you getting charged 0.25 ex vat each time you reinvest your dividends ( maybe you do this once/twice a year? )
Then perhaps the argument that ETF vs Funds (especially since many TER costs have been reduced to sub 1% ) because ETF is seen as the cheaper route is floored?
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I think we're misunderstanding each other. You're only charged 0.25% of the amount being reinvested, not your total holding, so it makes no difference if you're charged R500 X 0.25% four times a year, or R2000 0.25% once a year.
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It's called a Total Return ETF. NFSWIX and NFEMOM are examples of ETFs that reinvests the dividends for you.
Sent from my LG-V490 using Tapatalk
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Got you
however if you paying 0.5 % for an ETF because you are fee adverse but then reinvesting the dividends and paying .25 % ex vat on the dividend amount say once a year when reinvesting
Doesn't it makes sense then to look at some options that are managed and charge say 1% and all dividends automatically invested?
I guess it comes down to why you use an ETF and for me it was always cost based , but just find I am spending more having to always reinvest than i had initially thought!
I like the idea of my investment compounding , do you think its a strong positive to have this done automatically and included in a TER annual fee ?
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AHA!!!!
Thanks Hamster
that is what I am looking for !
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It's called a Total Return ETF. NFSWIX and NFEMOM are examples of ETFs that reinvests the dividends for you.
Sent from my LG-V490 using Tapatalk
The total expense ratio of NFSWIX is 0.36% so you are indirectly paying for that reinvestment of dividends.
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It's called a Total Return ETF. NFSWIX and NFEMOM are examples of ETFs that reinvests the dividends for you.
Sent from my LG-V490 using Tapatalk
The total expense ratio of NFSWIX is 0.36% so you are indirectly paying for that reinvestment of dividends.
Explain? What makes NFSWIX's TER so different from the others? STX40 is close to 0.45%
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I have two main goals in investing:
1) Don't screw up. This is the number 1 problem with most people's investing. I avoid this by not picking shares, funds or countries.
2) Don't waste money on fees. Simple, just keep costs as low as possible. But you need to consider all the costs.
The total expense ratio is an annual cost, while transactional costs (fee percentage + spread percentage) happen when you buy and sell. The Easy Equities 0.25% cost is a transactional. That's why when most unit trusts charge 1% they take far more money than an ETF charging 0.4% with transactional costs of 0.25%.
As an example, if you had to buy R100 000 in STX40 (don't do that, you can buy the ASHT40 much cheaper!), and reinvest the dividends, using easy equities, you'd pay about the following for the first year:
EE buying fees (incl VAT): R285
+Spread % (from midpoint, currently 0.17%): R170
+EE Reinvestment fees (3% div assumed): R8.55
+TER: R440
Total costs=R903.55
Your costs are R903.55 of your R100 000 in the first year. With a unit trust charging 1%, you would spend R1000 in the first year, so it's pretty close, but then let's go on to the second year where you invest an additional R100 000, assuming a 10% growth in the first year:
EE buying fees (incl VAT): R285
+Spread % (from midpoint, currently 0.17%): R170
+EE Reinvestment fees (3% div assumed): R17.95
+TER: R924
Total costs=R1396.95
So in the second year, your total costs would be R1396.95, while with the 1% unit trust, they would be R2100. A much bigger difference.
Feel like seeing year 3? Ok :)
EE buying fees (incl VAT): R285
+Spread % (from midpoint, currently 0.17%): R170
+EE Reinvestment fees (3% div assumed): R28.30
+TER: R1456.40
Total costs=R1939.70
So in the third year, your total costs would be R1939.70, while with the 1% unit trust, they would be R3310. Are you seeing the trend? The TER is the big influencer in the prices. That's the one you really must aim at to keep costs low.
And now, as always there is a caveat. If you can get a unit trust with the same TER and performance as the ETF then the unit trust will be cheaper. In the states you can buy the Vanguard funds through an ETF or unit trust (they call them mutual funds) at the same TER. In those cases the unit trust will be cheaper overall.
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I wasn't targeting NFSWIX specifically. The point I was making is that the costs are included in the TER, even if they are reinvesting the dividends for you in the ETF itself.
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Patrick as always.... a rock solid dissection :D
This is very clear once explained this way and makes a lot of sense and kind of what i was looking for , thank you
Printing this out and sticking it on the fridge!
regarding Unit trusts having same TER as ETFs ... i am sure its coming ( some guys like coronation and others are trying to capture this ) but still some way to go so I am going to be sticking to ETF's for now!
Did you ever manage to take everything offshore? the $ growth should start seeing some reen now with the Pravin G episode starting today!
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What would your views as a decent income growth ETF vehicle for SA?
DIVTRX
CSEW40
CSTOP50
NFEMOM
Patrick , i like your idea of not picking single stoicks for fear of being wrong :) what would be your choice here? i remember some past discussions on here talking about DIVTRX ... is this still the preferred SA ETF?
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What would your views as a decent income growth ETF vehicle for SA?
DIVTRX
CSEW40
CSTOP50
NFEMOM
Patrick , i like your idea of not picking single stoicks for fear of being wrong :) what would be your choice here? i remember some past discussions on here talking about DIVTRX ... is this still the preferred SA ETF?
I would also like to know. I'm just getting into investing and have a Balanced Fund A Unit Trust from Old Mutual which I see charges 2.17% which feels pretty high.
I'm also using Easy Equities and have some money in Coreshares Global Property and Coreshares S&P 500. Looking at also putting money into DIVTRX.
Help a nooby out ?
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What would your views as a decent income growth ETF vehicle for SA?
DIVTRX
CSEW40
CSTOP50
NFEMOM
Patrick , i like your idea of not picking single stoicks for fear of being wrong :) what would be your choice here? i remember some past discussions on here talking about DIVTRX ... is this still the preferred SA ETF?
DIVTRX and PTXTEN since their aim is to provide income.
CSEW40, CSTOP50 and NFEMOM are all geared for capital growth. Personally, I got rid of my Top* index ETFs and swapped them for NFEMOM. My TFSA consists mainly of DIVTRX and I'll move more and more of my TFSA investments towards DIVTRX and property ETFs when the market favours me getting rid of the INDI.
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What would your views as a decent income growth ETF vehicle for SA?
DIVTRX
CSEW40
CSTOP50
NFEMOM
Patrick , i like your idea of not picking single stoicks for fear of being wrong :) what would be your choice here? i remember some past discussions on here talking about DIVTRX ... is this still the preferred SA ETF?
DIVTRX and PTXTEN since their aim is to provide income.
CSEW40, CSTOP50 and NFEMOM are all geared for capital growth. Personally, I got rid of my Top* index ETFs and swapped them for NFEMOM. My TFSA consists mainly of DIVTRX and I'll move more and more of my TFSA investments towards DIVTRX and property ETFs when the market favours me getting rid of the INDI.
Never saw the question jon, but I think Hamster has listed pretty close to what I would choose if income was my goal. Just before moving my cash offshore I was putting it all in DIVTRX.
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What would your views as a decent income growth ETF vehicle for SA?
DIVTRX
CSEW40
CSTOP50
NFEMOM
Patrick , i like your idea of not picking single stoicks for fear of being wrong :) what would be your choice here? i remember some past discussions on here talking about DIVTRX ... is this still the preferred SA ETF?
DIVTRX and PTXTEN since their aim is to provide income.
CSEW40, CSTOP50 and NFEMOM are all geared for capital growth. Personally, I got rid of my Top* index ETFs and swapped them for NFEMOM. My TFSA consists mainly of DIVTRX and I'll move more and more of my TFSA investments towards DIVTRX and property ETFs when the market favours me getting rid of the INDI.
Never saw the question jon, but I think Hamster has listed pretty close to what I would choose if income was my goal. Just before moving my cash offshore I was putting it all in DIVTRX.
Hey Patrick,
Was your reasoning for DIVTRX because you were not planning to stay in SA?
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Seeing as the title is relevant to my question i'd like to hear your guys' opinions:
1. I have money investing in 2 dividend ETFs in the US.
2. A pays every month giving me about $50 per month
3. B pays quarterly at $110 per quarter.
4. So the total dividend is approximately $1000 per annum
To buy more etfs costs minimum $20 ie R350. The conflict im sitting with is, do I save up to $1000 and then buy some more of these ETFs (only one of the two, because of the $20 per trade) and miss out on a year's growth potential or less and let the fees corrode my return :wall: What would you do?
Conrad
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Seeing as the title is relevant to my question i'd like to hear your guys' opinions:
1. I have money investing in 2 dividend ETFs in the US.
2. A pays every month giving me about $50 per month
3. B pays quarterly at $110 per quarter.
4. So the total dividend is approximately $1000 per annum
To buy more etfs costs minimum $20 ie R350. The conflict im sitting with is, do I save up to $1000 and then buy some more of these ETFs (only one of the two, because of the $20 per trade) and miss out on a year's growth potential or less and let the fees corrode my return :wall: What would you do?
Conrad
Could you not perhaps add some extra funds to your offshore portfolio so that you have enough to make an economical trade. If not I would rather wait till you have at least $1000, markets could also be lower in a year, and paying more than 2% upfront on assumption they will be higher is to me not a worthwhile risk/return analysis.
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Seeing as the title is relevant to my question i'd like to hear your guys' opinions:
1. I have money investing in 2 dividend ETFs in the US.
2. A pays every month giving me about $50 per month
3. B pays quarterly at $110 per quarter.
4. So the total dividend is approximately $1000 per annum
To buy more etfs costs minimum $20 ie R350. The conflict im sitting with is, do I save up to $1000 and then buy some more of these ETFs (only one of the two, because of the $20 per trade) and miss out on a year's growth potential or less and let the fees corrode my return :wall: What would you do?
Conrad
Could you not perhaps add some extra funds to your offshore portfolio so that you have enough to make an economical trade. If not I would rather wait till you have at least $1000, markets could also be lower in a year, and paying more than 2% upfront on assumption they will be higher is to me not a worthwhile risk/return analysis.
If you are in one of the Vanguard funds you can supposedly reinvest dividends back into the fund, but, you would need to check this with your "broker" because it may be cheaper to automatically reinvest rather than take the dividend and then have to invest
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Personally I would if practical change brokerages. $20 is huge, I pay $1.70 minimum or 0.08% with interactive brokers.
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Personally I would if practical change brokerages. $20 is huge, I pay $1.70 minimum or 0.08% with interactive brokers.
I've looked at the website. What do you pays in fees? It shows that monthly fee is $20 pm? And you need $100k invested with them. How do you claim back your 15% dividend tax if the tax rate in USA is 30% on dividends?
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I think dividendtycoon on here is the same as the one that created this website: http://www.dividendtycoon.com/
A very nice read!
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Personally I would if practical change brokerages. $20 is huge, I pay $1.70 minimum or 0.08% with interactive brokers.
I've looked at the website. What do you pays in fees? It shows that monthly fee is $20 pm? And you need $100k invested with them. How do you claim back your 15% dividend tax if the tax rate in USA is 30% on dividends?
If you have less than $100k invested then there's a minimum fee of $10 per month. Your trading costs are part of this, so if you trade for $6 a month, you'll need to pay an extra $4 at month end. If you have over $100k there's no monthly fee. I'm fortunate enough to be in this group. We have a double tax treaty with the USA, so you will only be taxed 15% on dividends. I don't know how it works because I just buy VWRD which has the tax taken off at source.
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Personally I would if practical change brokerages. $20 is huge, I pay $1.70 minimum or 0.08% with interactive brokers.
I've looked at the website. What do you pays in fees? It shows that monthly fee is $20 pm? And you need $100k invested with them. How do you claim back your 15% dividend tax if the tax rate in USA is 30% on dividends?
If you have less than $100k invested then there's a minimum fee of $10 per month. Your trading costs are part of this, so if you trade for $6 a month, you'll need to pay an extra $4 at month end. If you have over $100k there's no monthly fee. I'm fortunate enough to be in this group. We have a double tax treaty with the USA, so you will only be taxed 15% on dividends. I don't know how it works because I just buy VWRD which has the tax taken off at source.
Sorry for popping in while you guys are busy discussing dividends, but I was just wondering how did you go about starting to invest in that specific fund? Are you from the states or currently residing there?
Say for instance one wants to also invest in a specific Vanguard fund. How does one go about doing that?
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Personally I would if practical change brokerages. $20 is huge, I pay $1.70 minimum or 0.08% with interactive brokers.
I've looked at the website. What do you pays in fees? It shows that monthly fee is $20 pm? And you need $100k invested with them. How do you claim back your 15% dividend tax if the tax rate in USA is 30% on dividends?
If you have less than $100k invested then there's a minimum fee of $10 per month. Your trading costs are part of this, so if you trade for $6 a month, you'll need to pay an extra $4 at month end. If you have over $100k there's no monthly fee. I'm fortunate enough to be in this group. We have a double tax treaty with the USA, so you will only be taxed 15% on dividends. I don't know how it works because I just buy VWRD which has the tax taken off at source.
Unfortunately, $100k is a long way off for us :'( How do you go about getting that other 15% back Patrick?
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Sorry for popping in while you guys are busy discussing dividends, but I was just wondering how did you go about starting to invest in that specific fund? Are you from the states or currently residing there?
Say for instance one wants to also invest in a specific Vanguard fund. How does one go about doing that?
Is the Vanguard fund listed via an ETF of sorts (for example this one: http://etfdb.com/etf/VWO/, which is the Vanguard FTSE Emerging Markets ETF which holds $44bil in assets)? If thats what you're looking for you can either use what Patrick uses to invest. I am using Standard Bank Webtrader and their fee is 0.2% per annum fee and $20 per trade. I don't know if there are other platforms that are as flexible but cheaper (fees are challenging)
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Sorry for popping in while you guys are busy discussing dividends, but I was just wondering how did you go about starting to invest in that specific fund? Are you from the states or currently residing there?
Say for instance one wants to also invest in a specific Vanguard fund. How does one go about doing that?
Is the Vanguard fund listed via an ETF of sorts (for example this one: http://etfdb.com/etf/VWO/, which is the Vanguard FTSE Emerging Markets ETF which holds $44bil in assets)? If thats what you're looking for you can either use what Patrick uses to invest. I am using Standard Bank Webtrader and their fee is 0.2% per annum fee and $20 per trade. I don't know if there are other platforms that are as flexible but cheaper (fees are challenging)
@Conradl, I use the Saxo Bank platform and they don't charge any recurring fee - just the onces off $20 per trade for NYSE. The other cheaper platform is ABSA Word Trader (0.1% fee + the $20 per trade). If I'm not mistaken, Standard Bank Webtrader, ABSA World Trader & Sanlam itrade all essentially use the Saxo Bank platform (i myt be wrong)
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Personally I would if practical change brokerages. $20 is huge, I pay $1.70 minimum or 0.08% with interactive brokers.
I've looked at the website. What do you pays in fees? It shows that monthly fee is $20 pm? And you need $100k invested with them. How do you claim back your 15% dividend tax if the tax rate in USA is 30% on dividends?
If you have less than $100k invested then there's a minimum fee of $10 per month. Your trading costs are part of this, so if you trade for $6 a month, you'll need to pay an extra $4 at month end. If you have over $100k there's no monthly fee. I'm fortunate enough to be in this group. We have a double tax treaty with the USA, so you will only be taxed 15% on dividends. I don't know how it works because I just buy VWRD which has the tax taken off at source.
Sorry for popping in while you guys are busy discussing dividends, but I was just wondering how did you go about starting to invest in that specific fund? Are you from the states or currently residing there?
Say for instance one wants to also invest in a specific Vanguard fund. How does one go about doing that?
If i understood the question correctly, all you need is to open a brokerage account that offers international stocks and ETFs. The ones I know are Standard Bank Webtrader (fees 0.25% pa - too high), ABSA Word Trader (fees 0.1% pa), Sanlam iTrade (fees 0,25% pa) and Saxo Bank (no fees - but minimum initial amount required by Saxo Bank is $10,000 but all the other guys require a minimum initial amount of $1,000). When you brokerage is up and running, you can simply transfer the money to the brokers bank account then you good to go. To buy Vanguard ETFs, just enter the name of the ETF you want to buy then click buy. That's just about it
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If i understood the question correctly, all you need is to open a brokerage account that offers international stocks and ETFs. The ones I know are Standard Bank Webtrader (fees 0.25% pa - too high), ABSA Word Trader (fees 0.1% pa), Sanlam iTrade (fees 0,25% pa) and Saxo Bank (no fees - but minimum initial amount required by Saxo Bank is $10,000 but all the other guys require a minimum initial amount of $1,000). When you brokerage is up and running, you can simply transfer the money to the brokers bank account then you good to go. To buy Vanguard ETFs, just enter the name of the ETF you want to buy then click buy. That's just about it
Except SAXO charge you USD100 if the account is inactive for 6months! Thanks for pointing me to ABSA's management fee for EXACTLY the same platform as Std's Webtrader. The fee is 0.2% not 0.25% but still twice ABSA's! Let's see what they have to say for themselves about this...
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If i understood the question correctly, all you need is to open a brokerage account that offers international stocks and ETFs. The ones I know are Standard Bank Webtrader (fees 0.25% pa - too high), ABSA Word Trader (fees 0.1% pa), Sanlam iTrade (fees 0,25% pa) and Saxo Bank (no fees - but minimum initial amount required by Saxo Bank is $10,000 but all the other guys require a minimum initial amount of $1,000). When you brokerage is up and running, you can simply transfer the money to the brokers bank account then you good to go. To buy Vanguard ETFs, just enter the name of the ETF you want to buy then click buy. That's just about it
Except SAXO charge you USD100 if the account is inactive for 6months! Thanks for pointing me to ABSA's management fee for EXACTLY the same platform as Std's Webtrader. The fee is 0.2% not 0.25% but still twice ABSA's! Let's see what they have to say for themselves about this...
My bad, yes the fee is 0.2% for Standard Bank Webtrader. Sanlam itrade charges 0.25% for the same platform. As for Saxo Bank, I asked them about the $100 inactivity fee and they said it doesn't apply to South African residence accounts. Its a fee for folks with accounts domiciled in Europe. So one will never be charged that fee
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My bad, yes the fee is 0.2% for Standard Bank Webtrader. Sanlam itrade charges 0.25% for the same platform. As for Saxo Bank, I asked them about the $100 inactivity fee and they said it doesn't apply to South African residence accounts. Its a fee for folks with accounts domiciled in Europe. So one will never be charged that fee
Now that is interesting news. Have you opened an account with Saxo?
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Good afternoon everyone
I usually read news websites like Moneyweb, Biznews, Fin24, etc. And I use ShareData.co.za to track my portfolio on a daily basis. However, I don't have a good way to track the dividend payout dates. What do you recommend?
ciao!
Ramon
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Good afternoon everyone
I usually read news websites like Moneyweb, Biznews, Fin24, etc. And I use ShareData.co.za to track my portfolio on a daily basis. However, I don't have a good way to track the dividend payout dates. What do you recommend?
ciao!
Ramon
Track the SENS for the shares you are invested in?
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How about a calendar giving the dates for the JSE companies publishing the dividend payouts. I want to add them to my Google Calendar.
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I don't think the companies know the dates themselves so far in advance.
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On my platform I can dive into each share that I holds fact sheet and a component of that is when interim/final ad AGM's will be held - admittedly they don't give the exact dates of future results releases. As an example my Adapt IT shares show the following information
AGM 23 Nov 2018
Final June 18 28 Aug 2018 (year end and release date) unconfirmed
Interim Dec 17 25 Jan 18 (release date) Confirmed
Hope this helps
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If it helps, I keep a file like this around and check it now and again:
<html>
<head>
<title>Investments</title>
</head>
<body>
<h3>Shares</h3>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=AVI" target="_blank">AVI</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=BVT" target="_blank">BVT</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=CPI" target="_blank">CPI</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=CLS" target="_blank">CLS</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=DSY" target="_blank">DSY</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=KIO" target="_blank">KIO</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=NPN" target="_blank">NPN</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=RES" target="_blank">RES</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=SHP" target="_blank">SHP</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=SRE" target="_blank">SRE</a><br/>
<h3>TFSA</h3>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=PTXTEN" target="_blank">PTXTEN</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=STXWDM" target="_blank">STXWDM</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=STXEMG" target="_blank">STXEMG</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=STXQUA" target="_blank">STXQUA</a><br/>
<h3>ETFs</h3>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=PTXTEN" target="_blank">PTXTEN</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=NFEMOM" target="_blank">NFEMOM</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=SYGWD" target="_blank">SYGWD</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=SYG4IR" target="_blank">SYG4IR</a><br/>
<a href="http://www.sharenet.co.za/free/sens/list_sens.phtml?scode=STXWDM" target="_blank">STXWDM</a><br/>
</body>
</html>
Copy the text into a file (notepad will do) and save it as shares.html
Change the lines according to the tickers you are interested in.
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How about a calendar giving the dates for the JSE companies publishing the dividend payouts. I want to add them to my Google Calendar.
Do-able - the info is out there.
Last day to trade, Div Pay-day, Expected results (quarterly, interim, final), Ex-div, AGM's, listings, suspensions.
You won't be able to get a database with this info I think (I'm not aware of one), but we (forum members) could add info to a calendar if somebody create/copy edible calendar which all members can access and contribute to?
Edit:
Could also bring in economic calendar like ZAR PPI tomorrow 9:30, EUR ECB Rated Decision 12:45, EUR ECB Monetary policy statement press conference 13:30, Bank of Japan Monetary Policy meeting minutes 23:50 – if you try to trade ALSI and you’re not aware of these, you’ll burn to a crisp in no time, not even talking about divvies on ALSI, if you’re long you pay the divvie, if you’re short they pay you – to give you an idea, once I had tree contacts on Alsi open, come Friday afternoon 16:50 and I was credited with R60 000. If I was long, I would have paid R60 000 – I’m super aware of world economic calendars and Alsi divvies now. Had reminders set up on my phone, tablet, computer – everywhere. :D