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Difference between funds
- Thread starter derp90
- Start date
mr_norris
Expert Member
I suggest downloading the MDD's for each fund and taking a look. But otherwise, it looks to me like the Class B one is for TFSA's only. The only other difference i could see is a minor percentage diff with the top 10 holdings.
zerocool2009
Honorary Master
zerocool2009
Honorary Master
The diff is mostly, read how ETF’s differ from Unit Trusts.
1. Its costs
2. And how pricing is updated (as in the price per “share”)
1. Its costs
2. And how pricing is updated (as in the price per “share”)
I'm going to do some reading on these differences for sure.
This appears to highlight unit trusts as having an advantage from looking at applicable fees: https://www.sygnia.co.za/press/a-beginner-s-guide-index-tracking-via-etfs-vs-unit-trusts
mr_norris
Expert Member
You need to look at the mdd for each fund. The etf fund you mentioned has a TER of 0.62%. That class B fund has a TER of 0.92%. I didn't read the article you linked to, but from what I've seen, etf's are cheaper. I assume her comparison was just an example.
mr_norris
Expert Member
I've mostly read the sygnia link that explains the differences between unit trusts and ETFs,I can understand why unit trusts might be cheaper.
I think what I should have said is the ETFs I've looked at have been cheaper. But if I'm honest, I've never really compared. I listened to a podcast years ago and they concluded that ETFs were one of the most cost effective ways of investing, and outside of individual stock picks and some alternative Investments, I've always stuck with them.
If I look at some ETFs I hold, it appears that the etf's are cheaper. Some TER examples:
* Satrix 40: 0.10% (ETF) VS 0.45%
* Satrix property: 0.3 Vs 0.45
It also seems like some ETFs don't have unit trust equivalents either.
I don't know how Magda came to the conclusion that unit trusts are cheaper. I'm assuming she is talking about her own platform and offerings. Unless I've misunderstood something.
Otherwise, those minimum disclosure documents are your friend. I always take the time to read them because they give you a good idea if what you're investing in and all the costs.
I think what I should have said is the ETFs I've looked at have been cheaper. But if I'm honest, I've never really compared. I listened to a podcast years ago and they concluded that ETFs were one of the most cost effective ways of investing, and outside of individual stock picks and some alternative Investments, I've always stuck with them.
If I look at some ETFs I hold, it appears that the etf's are cheaper. Some TER examples:
* Satrix 40: 0.10% (ETF) VS 0.45%
* Satrix property: 0.3 Vs 0.45
It also seems like some ETFs don't have unit trust equivalents either.
I don't know how Magda came to the conclusion that unit trusts are cheaper. I'm assuming she is talking about her own platform and offerings. Unless I've misunderstood something.
Otherwise, those minimum disclosure documents are your friend. I always take the time to read them because they give you a good idea if what you're investing in and all the costs.
ros_b
Senior Member
I think she came to that conclusion before Sygnia took over all of the DB-Xtrackers ETFs, and then started issuing their own. I may be wrong, but I think she sings a different tune now.
This video on investment costs by Nerina Visser of etfsa might shed some light: https://justonelap.com/definitive-guide-to-investment-costs/
byronjason
Active Member
From what I understand is that etfs have higher access costs such as strate, brokerage and investor protection fees. Also ETFs are traded so you may pay more to buy a single share in the etf , whereas if you buy a index tracking unit trust directly from the provider I.e Sygnia, Satrix etc you buying at the nav price and there is no access costs when buying into a unit trust (there is an argument that the access costs is already accounted for in the NAV, which is true but the cost is divided between all investors in the UT)
If you look holistically and over a longer period of time it is better to invest in an index tracking unit trust.
happy investing.