Easy Equities good or bad?

[zerocool2009]

While I understand your reasoning, I've got too much in my life to have to worry about. So for me, automatic reinvest is one less thing.

Very good reason!

 

[3WA]

ETF: Total return ETFs explained - Just One Lap

What is a total return ETF, who might benefit from them and why tax might be problematic.

justonelap.com

Thanks! So you really do take a tax hit on the dividends and/or CGT when you buy total return ETFs? That's a little bleak.

 

[vavyn]

Thanks! So you really do take a tax hit on the dividends and/or CGT when you buy total return ETFs? That's a little bleak.

I think it's the same for other ETF, ie SYGWD. Dividend tax is a final tax @ 20%. So whether you reinvest it or take it as cash you'll be paying 20% regardless. CGT would be the same thing as when you sell in the future at a profit (hopefully), you will have CGT.

I like what @newby_investor said. I rather reinvest the dividend for future growth.

 

[newby_investor]

I think it's the same for other ETF, ie SYGWD. Dividend tax is a final tax @ 20%. So whether you reinvest it or take it as cash you'll be paying 20% regardless. CGT would be the same thing as when you sell in the future at a profit (hopefully), you will have CGT.

I like what @newby_investor said. I rather reinvest the dividend for future growth.

I think that was a separate discussion though.

These total return ETFs reinvest the dividends of their holdings rather than paying them out. Not an Easy Equities option, it's part of the ETF's structure. Which is all good and well, except that if you hold the ETF in a TFSA, then you don't actually get the benefit of not having to pay dividends tax, as you would with other ETFs which actually pay out their dividends.

If I've understood correctly anyway.

 

[Swa]

I think that was a separate discussion though.

These total return ETFs reinvest the dividends of their holdings rather than paying them out. Not an Easy Equities option, it's part of the ETF's structure. Which is all good and well, except that if you hold the ETF in a TFSA, then you don't actually get the benefit of not having to pay dividends tax, as you would with other ETFs which actually pay out their dividends.

If I've understood correctly anyway.

The way I understand it though is that dividends from holdings get taxed regardless because they pay out to a fund rather than to the TFA. If it was dividends from the fund itself it's eligible for the rebate if held in a TFA. Could be wrong though but I don't see how the company would check and police it to know if their shares are held in an ETF held in a TFA or held in an ETF not held in a TFA.

 

[newby_investor]

The way I understand it though is that dividends from holdings get taxed regardless because they pay out to a fund rather than to the TFA. If it was dividends from the fund itself it's eligible for the rebate if held in a TFA. Could be wrong though but I don't see how the company would check and police it to know if their shares are held in an ETF held in a TFA or held in an ETF not held in a TFA.

Yeah I never bothered to follow this very closely. I'm happy with the fund overall.

 

[frodob]

From: https://justonelap.com/etf-where-should-i-invest-my-dividends/

In a total return ETF, you still pay a dividend withholding tax rate even if you don’t receive any dividends. This gets subtracted from the dividend amount before it’s calculated into the ETF share price. If you hold a total return ETF in a tax-free account, the subtracted tax gets paid into your brokerage account.

 

[frodob]

As we are talking about Satrix MSCI World and Nasdaq 100 ETFs here, could it be that South African Dividend Withholding Tax does not apply as these ETFs ultimately invest in companies not based in South Africa. Foreign Dividend Withholding Tax is still paid, regardless of whether the ETFs are bought in an TFSA or not.

Comparing Ashburton Global 1200 FOF ETF in my ZAR and TFSA accounts, I see Foreign Dividend Withholding Tax was deducted and no South African Dividend Withholding Tax was deducted in both accounts. As the Satrix MSCI World ETF is similar to the Ashburton Global 1200 FOF ETF, I would imagine similar tax patterns would be observed.

So I presume this would be the reason to see the same growth between the same ETFs within the ZAR and TFSA accounts.

 

[3WA]

As we are talking about Satrix MSCI World and Nasdaq 100 ETFs here, could it be that South African Dividend Withholding Tax does not apply as these ETFs ultimately invest in companies not based in South Africa. Foreign Dividend Withholding Tax is still paid, regardless of whether the ETFs are bought in an TFSA or not.

Comparing Ashburton Global 1200 FOF ETF in my ZAR and TFSA accounts, I see Foreign Dividend Withholding Tax was deducted and no South African Dividend Withholding Tax was deducted in both accounts. As the Satrix MSCI World ETF is similar to the Ashburton Global 1200 FOF ETF, I would imagine similar tax patterns would be observed.

So I presume this would be the reason to see the same growth between the same ETFs within the ZAR and TFSA accounts.

Interesting. The satrix etfs hold their underlying assets (iShares) in Ireland, so maybe there's a double taxation agreement? Is ASHEQF the same?

 

[zerocool2009]

I have a big choice so make, bringing all my Unit Trust portfolio (TFSA) over to EE or not.

I must say, my EE TFSA grew unbelievable. It was an "ok" year, the last week was just WOW

One great fund was the sygnia 4th industrial rev global !

 

[Krilliano]

I have a big choice so make, bringing all my Unit Trust portfolio (TFSA) over to EE or not.

I must say, my EE TFSA grew unbelievable. It was an "ok" year, the last week was just WOW

One great fund was the sygnia 4th industrial rev global !

I have to make the same decision, will probably decide in new tax year. I have a TFSA via employer/pension fund that has been stagnant, have it 4 years and the total is basically just my contributions. With EE TFSA for 2 years now and lots of growth. SYG4IR is great indeed!

 

[Speedster]

Just did some recon on my TFSA for the past year. Surprisingly STXDIV is up over 12% for the year (including tomorrow's dividend). That's pretty decent for what was a crummy year. My other stock, STXWDM, was up 14.6% in the same period.

EDIT: My R50 EC10 punt is up 270%.

 

[Speedster]

For anyone interested, I just did the purchase for my kids' TFSA for the year. Allocations were as follows:

• STX40: 20%
• STXCHN: 45%
• STXWDM: 35%

This leaves the portfolio balance as:

• STXDIV: 10%
• STX40: 10%
• STXCHN: 22%
• STXWDM: 58%

 

[mr_norris]

My TFSA is screwed because of poor decision making when I started it. While I did mostly offshore, I also had a decent percentage of it in Satrix Prop (WHY?). I bought at a high and it's still down around 50%. What gains I would have made have been negated by that.

I did the same thing with a Coreshares Top 50 ETF (WHY again). But it got to a point where I broke even and sold it to pump into Ashburton 1200.

 

[Dylan_G]

My TFSA is screwed because of poor decision making when I started it. While I did mostly offshore, I also had a decent percentage of it in Satrix Prop (WHY?). I bought at a high and it's still down around 50%. What gains I would have made have been negated by that.

Same.

The why? CSPROP was what Simon Brown said to buy in the TFSA a few years back.

 

[Speedster]

My TFSA is screwed because of poor decision making when I started it. While I did mostly offshore, I also had a decent percentage of it in Satrix Prop (WHY?). I bought at a high and it's still down around 50%. What gains I would have made have been negated by that.

I did the same thing with a Coreshares Top 50 ETF (WHY again). But it got to a point where I broke even and sold it to pump into Ashburton 1200.

That sucks. Sorry to hear!

 

[humbledryer]

Same.

The why? CSPROP was what Simon Brown said to buy in the TFSA a few years back.

I just started my TFSA this year and put the full allowance into STXCHN following Ray Dalio's comments on China.
I guess I will start to diversify next year

 

[Speedster]

I just started my TFSA this year and put the full allowance into STXCHN following Ray Dalio's comments on China.
I guess I will start to diversify next year

Looking at the returns on that, you probably did well!

 

[humbledryer]

Looking at the returns on that, you probably did well!

It's not bad at all so far. But time will tell!

I think I'll add MSCI world

 

[3WA]

While I did mostly offshore, I also had a decent percentage of it in Satrix Prop (WHY?).

Same.

The why? CSPROP was what Simon Brown said to buy in the TFSA a few years back.

I lost a small amount on SA property, and sold it at the all-time low. No regrets - the money I got back went to an ETF that grew enough to recover the loss.

But I can’t help wondering if it'll turn out differently if I buy back in now.