very interesting, and two weeks ago people were all raving about RAs when I stated my concerns
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Retirement Annuity - Allan Gray?
- Thread starter supersunbird
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very interesting, and two weeks ago people were all raving about RAs when I stated my concerns
Yeah that's 'cos they don't owe SARS anything... short lived happiness in my opinion.
My RA with ABSA is still there, inactive - and it only started returning when I stopped contributing. Until then it never outperformed the fees. I'd like to move it away from ABSA - but never get the time.
I have one with Alan Gray, which returned about 20% last time I checked - split across various funds.
I don't mind the fee's - but - the fund at least needs to perform.
supersunbird
Honorary Master
Well, the problem is he went though ABSA in the first place (they seem quite expensive), and believed their word. And old thread before I got interested in these things so never saw that thread. So due to the high fees, the fund performance was negated, but the chosen funds could just have performed badly too and combined they kept his stagnant.
If you want to get it through a broker you and he must discuss his lumpsum fee (if you have a lumpsum) and the annual fee. If it's too high then don't use him. You can even just do it yourself.
Lets look at that Coronation Balanced Plus Fund:
http://www.coronation.com/Assets/za...arch/2015-March-Balanced-Plus-Fund-Static.pdf
So the fund fee is 1.25% (excl. VAT). The Total Expense Ratio was 1.61% (as at 31/03/2015). So that's what you would have paid whether inside an RA or just going straight for the Unit trust, no difference.
Now here you can read about an RA with Coronation:
http://www.coronation.com/za/personal/retirement-annuity
So as you can see no extra cost to be in an RA with them, no initiation fees or broker fees (just the funds fees) if you don't use one and just go direct. You just fill in the forms (and deposit the lumpsum if you have one, don't need a lumpsum can just do monthly) and then register for an online account and you can have the ability to check the fund anytime you want.
I have been contributing R1000 to a Coronation RA (with other unit trusts making it up, not the Balanced) on a monthly basis from end February 2013, so this year in February I had contributed R24 000 in total so far, and the fund value then stood at around R29 000 (after the fees).
Will continue shortly.
If you want to get it through a broker you and he must discuss his lumpsum fee (if you have a lumpsum) and the annual fee. If it's too high then don't use him. You can even just do it yourself.
Lets look at that Coronation Balanced Plus Fund:
http://www.coronation.com/Assets/za...arch/2015-March-Balanced-Plus-Fund-Static.pdf
So the fund fee is 1.25% (excl. VAT). The Total Expense Ratio was 1.61% (as at 31/03/2015). So that's what you would have paid whether inside an RA or just going straight for the Unit trust, no difference.
Now here you can read about an RA with Coronation:
http://www.coronation.com/za/personal/retirement-annuity
So as you can see no extra cost to be in an RA with them, no initiation fees or broker fees (just the funds fees) if you don't use one and just go direct. You just fill in the forms (and deposit the lumpsum if you have one, don't need a lumpsum can just do monthly) and then register for an online account and you can have the ability to check the fund anytime you want.
I have been contributing R1000 to a Coronation RA (with other unit trusts making it up, not the Balanced) on a monthly basis from end February 2013, so this year in February I had contributed R24 000 in total so far, and the fund value then stood at around R29 000 (after the fees).
Will continue shortly.
supersunbird
Honorary Master
Now first you have to decide if you want to have the benefits of an RA within the limitations imposed. Saturnz clearly has decided its not for him, while I have decided it is, after seeing family and friends parents having bad retirements.
Do you know what the benefit and the limitations are having read up on that already?
Obviously there are other providers.
Managed fund providers like Allan Gray and Investec to name but a few, and on some platforms you can access some other providers funds, like with Allan Gray, their costs can vary grealty.
There are also index fund providers like Sygnia and 10X
Now index providers like 10X generally have lower fees:
https://www.10x.co.za/individual/retirement-annuity-fund/retirement-annuity/
They charge an annual fee of 0.9% (excl VAT) for amount under R1 million. Sygnia charges even less at 0.4%. But their funds are not the same, won't perform the same. One has to decide what suits you.
You can also have more than one RA, and use different providers.
Do you know what the benefit and the limitations are having read up on that already?
Obviously there are other providers.
Managed fund providers like Allan Gray and Investec to name but a few, and on some platforms you can access some other providers funds, like with Allan Gray, their costs can vary grealty.
There are also index fund providers like Sygnia and 10X
Now index providers like 10X generally have lower fees:
https://www.10x.co.za/individual/retirement-annuity-fund/retirement-annuity/
They charge an annual fee of 0.9% (excl VAT) for amount under R1 million. Sygnia charges even less at 0.4%. But their funds are not the same, won't perform the same. One has to decide what suits you.
You can also have more than one RA, and use different providers.
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supersunbird
Honorary Master
I have used a FA, but that was for life insurance/dread disease and such cover. He pointed out likely things I do need or don't need. Investing is in no way complex compared to that side of things.
He wanted to look at my overall wealth picture and I decided to let him, when the got done with the retirement and investments part he just said there nothing he can tell me, I've got it covered.
you need information to make an informed decision either way, if you just "outsource" the decision to someone you will incur huge costs down the line, RA or no RA
the sad reality is that not many people have a proper economic understanding of wealth management, yet alone a basic financial understanding, and if you are lacking in understanding on these two concepts, the best is to buy a property and pay it off quickly. As Warren Buffet says, put your money into things you understand- property is probably the most easiest of the asset classes to understand, and you can live in it.
I fall into this category.
supersunbird
Honorary Master
Yes, and even with that you need information. One must realise there are repair and maintenance bills. What is and isn't a decent interest rate. Do I have to take the banks insurance cover with bond, or can I use a other provider. What do I do once I have paid off the property.
ActivateD
Expert Member
Been thinking about getting an RA via AG as I have a Coronation top 20 account (which is doing badly) and do not want to a large portion of my money to one company.
My company takes 16% of my CTC for the provident fund and I just want to ask the question should I take a RA or just sent a big percentage to my provident fund?
My company takes 16% of my CTC for the provident fund and I just want to ask the question should I take a RA or just sent a big percentage to my provident fund?
D3x!
Banned
very, the first month i grew like 10% in that month, now i am losing money
ActivateD
Expert Member
I will invest for 5 years minimum then decide if I will cash out or not.
Perhaps major difference I can see between an RA, and your other two options, is that with the other two, you would be able to access it at any time. An RA would only be available at 55 I think?
i see that as a plus for the RA option.
Then there's the cost benefit between them all, which would require a much longer answer!
I definitely don't think an RA is a bad idea at all.
I'm in the same boat with this fund, I've slightly lowered my contributions to this one but will ride it out for a few more years.
As an FYI I work with one of our companies funds teams quite closely and have had some interesting conversations on fund growth within the SA market. One point they emphasized was that statistically, and for a number of logical reasons, you will have the smaller up and coming funds outperforming the larger ones as they grow their AUM over time. So you take a fund house like Coronation which is very established in the market both in presence and in terms of the sizes of their funds but rather than dump all your cash into say the Top20 diversify within a smaller fund house but that is also a similar mandate.
Also be aware of who the actual fund manager is, their track record as well as if your favorite fund is changing hands to a new manager. If an option I would rather invest in a particular person in the industry versus a particular fund or company. Obviously depending on if they are still managing similar products.
I haven't any affiliation with the company but Anchor Capital has had incredible performance in their high equity fund. Small fund house, good management team, diversifying into that fund has at least mitigated the lack of performance in the Coronation fund.
Or stuff it, just buy shares in Anchor and double your money every six months
mintydroid
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I'm in the same boat with this fund, I've slightly lowered my contributions to this one but will ride it out for a few more years.
As an FYI I work with one of our companies funds teams quite closely and have had some interesting conversations on fund growth within the SA market. One point they emphasized was that statistically, and for a number of logical reasons, you will have the smaller up and coming funds outperforming the larger ones as they grow their AUM over time. So you take a fund house like Coronation which is very established in the market both in presence and in terms of the sizes of their funds but rather than dump all your cash into say the Top20 diversify within a smaller fund house but that is also a similar mandate.
Also be aware of who the actual fund manager is, their track record as well as if your favorite fund is changing hands to a new manager. If an option I would rather invest in a particular person in the industry versus a particular fund or company. Obviously depending on if they are still managing similar products.
I haven't any affiliation with the company but Anchor Capital has had incredible performance in their high equity fund. Small fund house, good management team, diversifying into that fund has at least mitigated the lack of performance in the Coronation fund.
Or stuff it, just buy shares in Anchor and double your money every six months
Had a look at Anchor Capital. Minimum investment is 1 bar.
D3x!
Banned
SECTION 2: INVESTMENT DETAILS
The minimum lump sum investment is R10 000 per account. The minimum debit order is R500 per month
mintydroid
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Thanks found it now.
Diabolix
Senior Member
I'm in the same boat with this fund, I've slightly lowered my contributions to this one but will ride it out for a few more years.
As an FYI I work with one of our companies funds teams quite closely and have had some interesting conversations on fund growth within the SA market. One point they emphasized was that statistically, and for a number of logical reasons, you will have the smaller up and coming funds outperforming the larger ones as they grow their AUM over time. So you take a fund house like Coronation which is very established in the market both in presence and in terms of the sizes of their funds but rather than dump all your cash into say the Top20 diversify within a smaller fund house but that is also a similar mandate.
Also be aware of who the actual fund manager is, their track record as well as if your favorite fund is changing hands to a new manager. If an option I would rather invest in a particular person in the industry versus a particular fund or company. Obviously depending on if they are still managing similar products.
I haven't any affiliation with the company but Anchor Capital has had incredible performance in their high equity fund. Small fund house, good management team, diversifying into that fund has at least mitigated the lack of performance in the Coronation fund.
Or stuff it, just buy shares in Anchor and double your money every six months
Does Anchor Capital have a online portal like Satrix etc?
+1 Coronation Top 20 is earning less interest than leaving your money in the bank doing nothing...