Advice needed - Portfolio

[supersunbird]

One more question. Lets say my RA is spread out over three unit trusts , each with an annual fee of 1% , will my total fee per year be 3%?

No,

1% on a R500 fund is R5. If its 3 R500 funds its R15. 1% on a R1500 fund is R15. So the overall fee remains 1%.

 

[Radioboy]

Supersunbird, you are a champ! thank you!

Last question. Promise.

As my units trusts are all with Coronation, it would make sense to move my RA to them as well. Now, I should probably choose funds that I'm not already investing in, Right?

I currently have funds in Top20, Property Equity & Global managed. I assume that I should compare all the different funds and what their asset allocation is before making a choice. There is no point in investing in the same asset twice... right?

ok, that was two questions. Sowy.

 

[Hendrix]

Are you planning to move the current capital in your RA to Coronation?
If so, Coronation will assist you, it's a long process to do a section 14, I did one in January, from Liberty to Coronation.
I paid a 25% penalty on my capital, but decided to take the knock now rather than later.

At least, no penalties in future with Coronation...

 

[supersunbird]

It makes sense in some regards in that you can then see your RA and unit trusts on one screen. No issue with investing in the same asset twice, the one (unit trusts) is just more accessible when needed and can be used for medium (and also long term) term savings and can even be carried over into retirement at the end of the day. While the RA has tax benefits and is used just for retirement savings and cant be touched by yourself or others until that time (age 55).

First off good unit trust fund selection, nice diversification. Personally mine is Property Equity & Emerging Markets (my equity is in Satrix ETFs but Top20 is perhaps an additional future option for myself)

I feel that under R800 I feel its not possible to properly do your own fund allocation and that it best to go with a balanced asset fund in that case. Remember the minimum per individual fund in a Coronation RA is R200 and it has to be Regulation 28 compliant.

So for R800 you can have R400 in Top20 and R200 Emerging Markets or Global Managed and R200 Bond Fund, you can not have R200 Property since you will not be Regulation 28 compliant because Top20 and the overseas funds have property components. For a R1000 and further up the same ratios generally apply (50% local equity, 25% foreign funds and 25% bonds) bit the bigger the amount per month is the more you can tweak.

Now at R2000 and above per month you hit the sweet spot. You can have a allocation of R1000 (50%) in Top20 and R250 (12.5%) Emerging Markets and R250 (12.5%) in Global Managed and R300 (15%) and R200 (10%) in Bond Fund.

Or for R2000 and above per month you can have a allocation of R500 (25%) in Top20 and R500 (25%) in the Equity fund and R250 (12.5%) Emerging Markets and R250 (12.5%) in Global Managed and R300 (15%) and R200 (10%) in Bond Fund.

In my case once the R2000 is reached I'd look at diversifying to another provider with the next R1000 and above after that by taking an RA with another provider, say with 10x that offer an index tracking RA (it covers all asset classes) or the Alan Gray platform that offers you a whole other array of unit trusts you can choose from other providers to offer a bit of fund diversification. I'd probably go for the 10x one myself, like a half-half mix of managed funds and index trackers.

Hope that's offer some insight and is clear enough and is not too much info.

 

[Radioboy]

Are you planning to move the current capital in your RA to Coronation?
If so, Coronation will assist you, it's a long process to do a section 14, I did one in January, from Liberty to Coronation.
I paid a 25% penalty on my capital, but decided to take the knock now rather than later.

At least, no penalties in future with Coronation...

Yes, I am moving from Liberty. Dealing with them has really been a headache. I can't even trust them to follow debit order instructions correctly, so there is no way I can trust them with my cash.

I'm prepared to loose some capital. Rather get myself out of the "old style" RA now while I still have time to make for the capital lost by moving.

I contacted Allan Gray and Coronation. With Allan Gray I can't transfer my capital and continue my contributions, if I want to carry on contributing, I will have to open another account with them. Which means more fees. So I think Coronation it will be then.

Do I contact / approach Coronation first, or Liberty. Where do I start?

Thanks for helping

 

[Radioboy]

supersunbird, since I joined MYBB, you have always given me great advice. Thank you so much!

After doing some reading, I actually wanted to move to it to AG, but would have ended up with two RA's. So for the sake of saving in a RA I will move it to Coronation. It is also more convenient.

I think I am just gonna chuck all the cash into the BALANCED PLUS FUND. Then as soon as I have more money to invest ill change some of the funds. Luckily I'll have the freedom to do so without paying stupid fines.

 

[supersunbird]

supersunbird, since I joined MYBB, you have always given me great advice. Thank you so much!

After doing some reading, I actually wanted to move to it to AG, but would have ended up with two RA's. So for the sake of saving in a RA I will move it to Coronation. It is also more convenient.

I think I am just gonna chuck all the cash into the BALANCED PLUS FUND. Then as soon as I have more money to invest ill change some of the funds. Luckily I'll have the freedom to do so without paying stupid fines.

Its a pleasure

Great choice, you can build the contributions up till you reach R2000pm perhaps and then change the fund allocation as you desire.

Unfortunately (or is that fortunately lol?) I have never had to do a section 14, i'm sure Hendrix can help. I predict he will tell you to contact Coronation first and that they will help you from there.

 

[Radioboy]

Gosh, just read the transfer can take up to 180 days. :wtf:

So, i started the whole process of moving my RA from Liberty to Coronation. Will only loose about R2000 in fines/charges.

Well worth it !

 

[Hendrix]

Coronation were very helpful with my transfer.
Only 2k? Is there little in the fund? (sorry if it's a personal question)
My transfer was done in 60 days.

 

[Radioboy]

Coronation were very helpful with my transfer.
Only 2k? Is there little in the fund? (sorry if it's a personal question)
My transfer was done in 60 days.

It was by no means a big fund. The total transfer is just under R30k. I was also surprised as i read some people lost between 25% to 30% of their capital.

I did have a few things that counted in my favour though. I made a HUGE issue of the confidentially breach when the mistakenly emailed my mom's portfolio/will to me as well when they continued to deduct money from my account for unit trust accounts that were closed weeks ago, and frankly - i just think they are very glad to get rid of me. I was by no mean an easy client.

So yeah, I am happy to be in Coronation's hands now.

 

[Hendrix]

I wonder if the Big Insurance companies are worried, as they are losing a lot of business.
Same goes for Financial Advisors, people have burnt their fingers once too many times.

 

[Radioboy]

I wonder if the Big Insurance companies are worried, as they are losing a lot of business.
Same goes for Financial Advisors, people have burnt their fingers once too many times.

I doubt it , there will always be misinformed/ignorant/unsuspecting folks that they can pray on. Although , and I hate to admit this, the Gov have done a quite a lot recently to protect the consumer. It can only get better from here...