@rjozen Be careful of hypothetical questions, peoples positions differ.
Stop thinking in terms of currency or platform. They both just a way to get to funds for a desired allocation. The funds you mention have different allocations as well (Short, long, country specific etc.)
- EE is just a platform. You should buy funds ideally unless there is a term needed, which should then not be regarded as your "long term" but rather a term place to XYZ reason
- See 1, buy the market, then tilt to your more specific needs with educated reason for tilt
- For ZAR
- Taxable accounts would be Satrix funds, they are cost effective atm for both local and foreign if I recall.
- In RA would be Sygnia all bond index if you manage your RA yourself, else just whatever the manager is allocating - partly due to my self managed RA being with Sygnia
- I don't buy global bonds in my RA due to costs
- For USD, AGGG due to estate taxes, else BNDW (so depending on your USD holding value. Estate taxes is only really consideration at around 250k+ USD value)
- I don't buy local bonds in foreign currency accounts due to cost effective access locally already and contain them already in RA.
- Whatever the global allocation is atm - that is what I buy. A simple a fund that would automatically mimic that, don't need to tinker.
- For local bias, I add a small percentage, although depends on how far away from retirement you are. This would mostly be within RA already and no where else. If I need more local bias tilt, will be depending on where I do that tilt (within RA, taxable account etc.).
- 90/10 atm
- Mostly due to bonds in RA.
- Everywhere else I do not do bonds or income based investments for my long term portfolio, yet.
- Going forward, my new allocations will contain bonds that will slowly change my portfolio allocation. 10 years before retirement you should already have some direction of allocation going on and slowly adjust towards retirement. This is because something like sequence of return risk exists as well. Running a 100/0 portfolio until day of retirement, getting a strong market downturn, can dramatically effect your retirement if not managed.
- This is what works for me. Understand my position is most probably very different to yours.
- This is meant for one of your last retirement withdrawal vehicles in order to maximize tax free growth (so it needs to sit the longest). 100% Equity here as it beats bonds in the long run. For simplicity, I just buy global funds and forget it for eternity. 5-10 years away from withdrawing from it, I will adjust things over time and introduce an allocation that is fit in conjunction with the rest of my portfolio. Since no CGT is applicable here, I don't need to worry about triggering tax with rebalancing.
Big note - I do not live in South Africa atm. I haven't contributed to an RA in many many years as it mathematically doesn't make sense for my position/needs. My long term position is aggressive in allocation as I'm covered on the short-mid term quite well. Dependents etc. is covered as well. No depts anywhere. Ability to pay cash for anything I need.
Now, for yourself.
If you want bonds, understand that you will already have exposure in your RA which if I recall will be a chunk of your portfolio atm and going forward. For TFSA, unless you want to 100% maximize taxation of every drip, just buy global MCW index fund here and move on. In your taxable accounts, see what is needed further and tilt here. Again USD/ZAR doesn't matter. But if you do plan on investing for say 7+ years, the fees and options you have in foreign currency is superior than what we have in ZAR. E.g. VT fund vs GLOBAL (tickers of funds). Satrix Global vs AGGG or IGLO or BNDW etc. etc.
Again, starting out keep it simple! Understand what or why you are picking a fund and how it compliments your investment strategy.
