Satrix 40

[RisseN]

Hey everyone,

I would like to setup a monthly debit order of R500 to invest in the Satrix 40. I just have a few questions as I dont know much about this stuff (although im reading as much as I can to get educated):

- It seems as though the two options to go with are either an investment plan or a broker. It seems as though for me the cheapest option would be to just go the investment plan route. ie: go to the satrix website and download the 'new business application' form. Is there any other way that I am not aware of? (I already trade using Standard bank online trading website, but I dont think that caters for this?)

- As part of the new business application form, you state what amount you would like debited, as well as what you would like the annual increase to be. What happens if I would like to increase the amount by more than I originally stated at some point? Or what if on a given month I feel like transferring more than just the normal R500? Is it possible to manually transfer more than what is debited?

- Is there any benefit to using someone like www.etfsa.co.za? Or is going directly through the satrix website fine?

- Are there any tax implications I should be aware of? I remember reading somewhere that I wouldn't be taxed so shouldn't have to worry about declaring this but im not sure exactly.

Thanks for any info, much appreciated

 

[mjkelly]

Hey everyone,

I would like to setup a monthly debit order of R500 to invest in the Satrix 40. I just have a few questions as I dont know much about this stuff (although im reading as much as I can to get educated):

- It seems as though the two options to go with are either an investment plan or a broker. It seems as though for me the cheapest option would be to just go the investment plan route. ie: go to the satrix website and download the 'new business application' form. Is there any other way that I am not aware of? (I already trade using Standard bank online trading website, but I dont think that caters for this?)

- As part of the new business application form, you state what amount you would like debited, as well as what you would like the annual increase to be. What happens if I would like to increase the amount by more than I originally stated at some point? Or what if on a given month I feel like transferring more than just the normal R500? Is it possible to manually transfer more than what is debited?

- Is there any benefit to using someone like www.etfsa.co.za? Or is going directly through the satrix website fine?

- Are there any tax implications I should be aware of? I remember reading somewhere that I wouldn't be taxed so shouldn't have to worry about declaring this but im not sure exactly.

Thanks for any info, much appreciated

Firstly there are a few options when investing with Satrix ETF's. They themselves have different portfolios, ie. Satrix 40, Satrix divi etc..

I assume you know this and intend on investing in the Satrix top 40. On the new business application form, you can select an initial deposit, as well as set up a direct debit for a monthly amount. At any time, by filling in one of these forms, you can make additional deposits or make amendments to your direct debit amount.

I have always just dealt directly with Satrix, and I find them highly competent and efficient. But I have never tried going through anybody else, such as ETFSA.

Lastly, there is no harm in declaring it, as far as I am aware any dividends earned are not subject to income tax, as they have already been taxed as income of the companies in the top40. However when you sell your shares one day, if you make a profit, that profit is subject to capital gains tax. I stand to be corrected on this, I also remember reading about exceptions to this depending on how long you have held onto the shares etc.

Here is also a pretty informative article comparing Satrix to other tracking funds :'Is Satrix really the cheapest?'

EDIT:

As I said I stand to be corrected: Moneywebtax

 

[HavocXphere]

I wouldn't be taxed so shouldn't have to worry about declaring this but im not sure exactly.

Dividends won't be taxed, but you MUST declare them. i.e. tax act says you include it under gross income & then take it back out again as being exempt under s10(1)(k).

If you don't declare it then it screws with SARS' calcs. Especially during tax audits.

 

[RisseN]

Great, thanks for your replies. Much appreciated.

 

[ruan567]

Good idea! I also signed up for the Satrix 40, but I took the smallest option (R300/month debit order). Let's see how it goes.

 

[wizdumb]

rather than setting up a direct debit, can i lets say, invest 10k as a lump sum and later on deposit more as wheni have extra cash? seems like you can, but would it be worth it? i read up on their website, but it is still a little above my fireplace.

//sorry for de-railing the thread a bit