SATRIX Question

[Candystore]

If I invest offshore (e.g. S&P 500) specifically for the purpose of moving away from tying up money in SA, would it not be better to then rather NOT use a local platform like SATRIX? Rather use an international platform, or does it not matter? Is SATRIX itself safe from collapse (yes, I am a worst-case scenario person). What would such an international platform be? Thanks.

 

[backstreetboy]

Interactive brokers, tdameritrade, n26 bank and degiro, Etoro etc. etc.

 

[mr_norris]

would it not be better to then rather NOT use a local platform like SATRIX?

Yes and no. The local ETFs still track the index, so the percentage returns would be much the same. If you are worried about the rand tanking you could invest in a dollar based ETF. Just understand that it's quite expensive to transfer, and it's very sad when you buy dollars when the rand is weak and shortly afterwards it gets stronger

Other than the brokers backstreetboy mentioned, Easy Equities has dollar based ETF's on their platform, but the forex charges apply.

 

[azbob]

Who's the cheapest between SatrixNow, Coreshares and EE?

 

[koffiejunkie]

It doesn't matter, but you'll lose money in the transfer and currency conversion if you use an overseas broker.

Satrix still invests in USD shares, so if the rand tanks, the Rand value of your investment will go up, and when the Rand recovers, your investment will go down accordingly. Ultimately, all that matters is the USD value (or more specifically, the index itself).

 

[zerocool2009]

Who's the cheapest between SatrixNow, Coreshares and EE?

EE zero monthly costs! Satrix have backend costs deducted every 3 months

 

[Candystore]

OP here: Maybe my initial question was unclear. Can e.g. SATRIX or Easy Equities go the same way as ZAR X recently? If it goes south, do my investments survive?

 

[koffiejunkie]

Can e.g. SATRIX or Easy Equities go the same way as ZAR X recently? If it goes south, do my investments survive?

Any business that needs a licence to operate can go that way if they fail to live up to the requirements, or run out of operating funds, or whatever.

In SA, you own the underlying shares. If Satrix go out of business, their assets will most likely be bought by another company, and you'll continue as normal. If you are invested in their funds, probably the same, but if the worst happens and their funds have to be disbanded, there will be some (no doubt, drawn out) process to recover the underlying shares and parcel them out appropriately.

If you invest with an overseas broker, you may have that protection in theory, but it will be a lot more complicated (and costly, to you) to recover your investment. To this end, if you want to use an overseas broker, and/or overseas funds - stick to Europe. Consumer protections are better, tax implications are better due to the double tax agreements. Vanguard, for example, domicile their funds in Ireland. Their S&P500 (VOO) equivalent is VUSA (in GBP) or VUSD (in USD) (same fund, there's another code for EUR too) and it's traded on most of the major exchanges in Europe, so you have quite a lot of choice. It's exactly the same underlying assets, so you get exactly the same gains. The fund fees are generally a tiny bit more, but usually the tax benefits more than makes up for that.