Easy Equities ETF plan

[rjozen]

I have been doing some research, Reading quite a lot of historical post here, since my first post regarding this ETF and investing on EE.

I Read a lot of articles, about diversification is key, or the bogglehead lazy 3 fund plan. ( Top US, Total world and bonds)

I don't have my final answer to my own question yet, but I have some funds targeted on EE, as I get funds free, that i will push towards. The plan is for long term investing, After i have put in RA, and Bond and when i have some funds free to invest somewhere else like on EE.

TFSA: (first priority to max out soonest each year)

• Sygnia S&P500 (70%)
• Sygnia FTSE100 (15%)
• Satrix top40 (15%)

USD EE: (when ever funds left over, after TFSA maxed, I will plan to either USD or Local EE ETF)

• Vanguard U.S total Stock (60%)
• Vanguard Total Internatioinal Stock (40%)

Local EE:

Not sure allocation, or split or priority but got my eyes on the following: (wont do all of them, just the few that made my shortlist of most interesting looking ETF)

• 1vest Gold
• Starix Indi25
• Satrix Resi10
• Sygnia 4th Indus
• Sygnia MSCI Mergeing market 50
• Top up on S&P500 as safety
• Top up on FTSE100 as safety

Just sharing my thoughts, any inputs or suggestions or discussions on this would be great.

 

[alfiano]

@rjozen Well done for starting on the journey of educating yourself. You seem to mostly be in the right track. That said:

You are complicating things a fair deal.

• 10X Total World covers your US+International part of the Boglehead 3 fund plan (better than S&P500+FTSE100 - also Sygnia’s FTSE expense ratio is very high).
• Adding more South african exposure is a totally fine idea, 0-30% is okay and so your 15% is good.
• USD EE: Vanguard Total World Stock (VT) is the same as 60% VTI+40% VXUS.

Local EE:
* If you want to play around with investing, go ahead, but keep it to “fun money” like 5-10% of your wealth.
* Otherwise go 10X Total World + bonds if needed. EE USD is better than EE ZAR, just be careful/aware of US estate tax issues when you’re investing more significant sums (like getting above R500k), you may want to use IBKR (which has quite a steep learning curve).

*your bond % can be zero. It’s up to your risk tolerance, a bare in mind you have bonds in your RA.

 

[rjozen]

@alfiano Thanks for the Feedback,

So in your opinion - 10X Total world is better to rather put all in there instead of split between S&P500 and FTSE100?

Also Vanguard VT - better to put it all in jsut that one? instead split between VTI and VXUS?

And final point, Yes TFSA is my main priority, Then next priority would be in USD EE, and last priority at the moment is EE ZAR. For example i am prob in agreement for around 80 USD and 20 ZAR EE. But agian have not made my mind up on the local EE side of things. Any suggestions on the local EE ZAR or you rate 10X just the best bet to be safe?

 

[alfiano]

@rjozen 1) Yes, gives you exposure to all of US, UK as well as Europe+Asia.
2) Yes, unless you want to vary your exposure one way or the other, VT.
3) 10X Total World is the same as Vanguard Total World, so it’s the best but there really is no need to use EE ZAR until you are investing material sums (or for your South African allocation). EE USD is best as the expense ratios are lower.

 

[mugen]

@rjozen TFSA - would just buy 10X Total world, it's what I do. There is significant US exposure. I am unsure about the percentage exposure in the UK. I would not bother with anything local in my TFSA, but that's just a preference thing. I do have some money in a REIT and some in a Satrix Emerging Market ETF though.

USD EE - TBH I would only use this for things I can't get locally. You can save yourself a ton of fees buying and sending dollars to your account and just get SATRIX S&P500 in your ZAR acc.

Local EE - there is a lot going on here, but I am sure you have your reasons. It does seem like a lot of ETFs IMO. There may be some overlap between Resi and Indi though, I'm not 100% sure. It may be a good time to get into Resi as the mining sector has been hit hard - whether or not that'll improve and show some growth in the future is another story. All I know is I bought a lot of mining stocks a while ago, and they all tanked. I am still holding some heavy bags here.

To be honest I have a lot of mistakes I have held onto so how I would do things now isn't quite how I have it. I am just HODLing onto those mistakes now.

 

[alfiano]

@mugen Re cost of EE USD vs EE ZAR, the increased forex/other costs (incurred twice, once when you buy and once when you sell) are outstripped by the higher expense ratios (incurred annually) on ZAR ETFs in fair time.

Eg: Vanguard S&P500 is 0.03%, Satrix S&P500 is 0.25%. That's 0.22% per year. Within five-ten years (which should be your minimum holding time for an equity investment), you've broken even on the forex fees and if you're holding for decades, it'll be materially better. There is also a small CGT benefit as South Africa targets a higher inflation rate band than the USA.

Just be aware situs tax implications.

 

[mugen]

@alfiano Yeah those are some good points

 

[rjozen]

@alfiano Am i correct in saying the fees of Satrix and Synias s&p500 end up being the same?

Satrix 15% management and 25 Ter
sygnia 15% management 5 &other ans 20% TEr

 

[rjozen]

@mugen Thanks for the input and feedback!
Is there a reason for satrix sp500 over sygnia?

On local i have not selected any etf as yet. Those are just the ones that looks most interesting. Definitely wont use all of them' rather 1 or 2 to have some local coverage on a very small percentage. But which ones i have no clue as yet...

And i see 10x total world is very popular pick. Lot of people reccomend it. I currently have it in my tfsa aswell.

Why do you prefer it as the only one in your tfsa?

 

[rockyravoli]

@rjozen Just curious but why 1invest gold vs Absa newgold ?

 

[rjozen]

@rockyravoli They very similiar if not mistaken if i saw correct the invest is slightly lower management fees of 0.25 vs absa 0.30%.

 

[rockyravoli]

@rjozen Yeah that's a ratio and not a percentage - not sure what the diff is tho.

The Absa is cheaper per share and the fund is twice the size but also fucking absa

 

[thevaliantx]

@rjozen Buy directly through signia instead of through EE who will whack you with fees

 

[alfiano]

@thevaliantx Sygnia usually works out to be more expensive than EE as they charge unavoidable annual fees. EE’s fees are brokerage (two-off) and you can avoid the Thrive “inactivity fee” by setting up a small deposit monthly.