Author Topic: Australian Investing Thread  (Read 760726 times)

Stimulated

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Re: Australian Investing Thread
« Reply #2150 on: August 05, 2016, 03:48:04 AM »
OK, this may be where I am getting confused between

"Vanguard Australian Shares Index ETF (VAS)"

and

"Vanguard Index Australian Shares Fund"

because I can't see the difference, apart from the fund one is allowed by my Super as an investment, and has considerably higher fees.
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marty998

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Re: Australian Investing Thread
« Reply #2151 on: August 05, 2016, 05:32:06 AM »
OK, this may be where I am getting confused between

"Vanguard Australian Shares Index ETF (VAS)"

and

"Vanguard Index Australian Shares Fund"

because I can't see the difference, apart from the fund one is allowed by my Super as an investment, and has considerably higher fees.

One is the ETF traded on the ASX and one is the managed fund (unlisted)

Also - dividends from shares held in Super - what happens to them?  Do they top up the cash account or how does it work?

Thanks for any advice.

Here's my best guess, while I work in Super this isn't really my specialty. If your in a Super funds investment strategy like 'Australian shares'  the fund pools everyone's money and invests in Australian shares like BHP, WOW etc. You then own 'units' of Australian shares. At the time you invest you are given a unit price. Each Australian share might be initally worth $1.00. If you have $1000 invested in Australian Shares then you own 1000 units. The assets that support these units grow/increase due to capital gains, dividend payments, franking credits, options etc... Based on the movement of assets the value of your Australian share 'units' will change. By the end of the year each unit might be worth $1.20. So dividends are priced into the value of you unit, its not just capital gains.

Yes this is along the lines of what happens. Industry and retail Super funds will appoint a fund manager (a "mandate") to manage a pool of money in a particular asset class. The fund manager buys and sells the assets as a group, and then the Super fund's back office will maintain the allocations back to individual investors.

So when you switch out of an Aus shares option for example, you don't trigger CGT... the pool of money is still invested, but the Super Fund will change your allocations via unit prices.

You might wonder then how they can accurately credit returns on investments... here's the rub, it's not 100% accurate.

Most industry funds will maintain a small reserve of uncredited investment returns in order to smooth out the differences between the actual pot of money invested in an asset class, and the sum of the total amount invested by all members in the fund in that asset class. You will see this on the balance sheet of the fund in its annual report.

The system works because not everyone asks to redeem their money at the same time. The only time when the entire books reconcile exactly will be when the Fund decides to wind up, liquidate all assets to cash and return all money.

marty998

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Re: Australian Investing Thread
« Reply #2152 on: August 05, 2016, 05:40:27 AM »
I forgot what I was going to write.... oh yes... Suncorp profit.

Down a little. Insurance profit was down, but the banking profit was up. SE Qld property market must be going alright for that to happen.

More wet and wild weather in Sydney this past couple of days will not be good for the Insurance division in 1H17 as well....

FFA

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Re: Australian Investing Thread
« Reply #2153 on: August 05, 2016, 07:11:39 AM »
So when you switch out of an Aus shares option for example, you don't trigger CGT... the pool of money is still invested, but the Super Fund will change your allocations via unit prices.
When you switch, wouldn't the fund pass on the instruction to the fund manager (e.g. sell $X of Australian shares and buy $Y of Global shares, ... or whatever the switch happens to be). So it might trigger a capital gain (inside the "pool", not for you personally) if the fund manager then goes and sells the actual shares within the portfolio to effect this. However as per most managed funds, they might have a small cash allocation to manage redemptions, in which case there is no capital gain triggered. Or it might be offset by inflows in which case shares would also not be sold and no CGT.
In any case going back to the original question, I still interpret this as per my earlier post that the dividends (net of 15% tax) are re-invested in the same category. They do not go into cash or get re-invested as per your desired allocation for future contributions.

marty998

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Re: Australian Investing Thread
« Reply #2154 on: August 05, 2016, 08:03:28 AM »
So when you switch out of an Aus shares option for example, you don't trigger CGT... the pool of money is still invested, but the Super Fund will change your allocations via unit prices.
When you switch, wouldn't the fund pass on the instruction to the fund manager (e.g. sell $X of Australian shares and buy $Y of Global shares, ... or whatever the switch happens to be). So it might trigger a capital gain (inside the "pool", not for you personally) if the fund manager then goes and sells the actual shares within the portfolio to effect this. However as per most managed funds, they might have a small cash allocation to manage redemptions, in which case there is no capital gain triggered. Or it might be offset by inflows in which case shares would also not be sold and no CGT.
In any case going back to the original question, I still interpret this as per my earlier post that the dividends (net of 15% tax) are re-invested in the same category. They do not go into cash or get re-invested as per your desired allocation for future contributions.

If I recall correctly Perpetual manages $30 billion on behalf of Australian Super in the Australian shares option. Chances are in this example there will be hundreds of people switching in and out of the shares option, as well as contributions going in so when you switch your money it will be grouped and netted with every other transaction and whatnot.... I guess it's impossible to determine.

Dividends do get reinvested in the same option however I do not believe fund managers will automatically opt for DRPs if available. This is because automatically reinvesting dividends may quickly result in unbalanced portfolios (especially with Banks paying comparatively larger dividends), and managers may breach stock limits (e.g. 5% substantial shareholding disclosure, 20% takeover provisions etc).

Dividends go into a general cash account within the mandate and then are invested as per the Fund Managers' portfolio strategy and investment style. Most Aus shares mandates written between a manager and a Fund/client will permit a 0-5% cash allocation. Fund managers actually hate having cash because any allocation to cash over the long term is a drag on performance.

chasingthegoodlife

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Re: Australian Investing Thread
« Reply #2155 on: August 06, 2016, 12:39:08 AM »
Ok, I have a (possibly stupid) question about entering ETF income on my tax return.

I have done my own taxes for years using eTax but this is my first time using MyTax and also my first year inputting income from ETFs, as opposed to mutual funds.

My mutual fund income was easy, but looking at the tax statements from my Vanguard ETFs, the amounts have 'Individual Tax Return Label' codes next to them that only seem to correspond to the Mutual Funds section of MyTax. The Dividends section only allows franked/unfranked/franking credits and withheld tax to be entered. A quick google found someone on Whirlpool suggesting it should be input under the 'Trusts' section but that doesn't seem to match up either.

Can anyone point me in the direction of a good explanation on how to enter this ETF tax summary into MyTax?

If it's too complicated I'll see an accountant but it seems a shame for such a small amount of income.

I guess another alternative would be to wait until Vanguard make the data available to the ATO for pre-fill, if in fact they do this?

Any info is welcome!

marty998

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Re: Australian Investing Thread
« Reply #2156 on: August 06, 2016, 01:18:48 AM »
Yes it should be ok to enter the data into the trusts/managed funds sections. Why doesn't it match up? It works the same way, and all the labels will be there. The only item that is not entered into your tax return is tax deferred income.

You should not enter it in the dividend income section.

Trevor Reznik

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Re: Australian Investing Thread
« Reply #2157 on: August 06, 2016, 02:41:14 AM »
Yes it should be ok to enter the data into the trusts/managed funds sections. Why doesn't it match up? It works the same way, and all the labels will be there. The only item that is not entered into your tax return is tax deferred income.

You should not enter it in the dividend income section.

This.  Just enter it exactly where the Vanguard statement tells you to.  If you already have amounts there from mutual funds etc than you need to add your vanguard amounts onto that.

Stimulated

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Re: Australian Investing Thread
« Reply #2158 on: August 06, 2016, 02:48:36 AM »
Just moved my AU$95000 in super from cash into $60000 VHY $35000 VAS.

Hopefully that should grow faster than the tiddly % I was getting.
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slothman

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Re: Australian Investing Thread
« Reply #2159 on: August 06, 2016, 10:13:18 PM »
Is anyone familiar with the ATO's income tax estimator tools?

I'm trying to replicate the following scenario from the "Comprehensive tax calculator 2015" into the "Income tax estimator 2016":
Quote
Individual receives $28,571 in gross dividend income ($20,000 net dividend and $8,571 in franking credits) and no other income. Tax resident for the full year. $0 tax payable and franking credits fully refunded. Note: $8,571 in franking credit assumes dividends are fully franked and company tax rate of 30%.

Screenshot below:
http://imgur.com/a/P3W40

Link to estimator tool:
https://www.ato.gov.au/calculators-and-tools/Income-tax-estimator/

However I can't seem to find where I can input "Franking tax offset (imputation credit)" into the 2016 tax estimator tool. Any ideas?
« Last Edit: August 06, 2016, 10:16:17 PM by slothman »

faramund

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Re: Australian Investing Thread
« Reply #2160 on: August 07, 2016, 02:57:33 PM »
Is anyone familiar with the ATO's income tax estimator tools?

I'm trying to replicate the following scenario from the "Comprehensive tax calculator 2015" into the "Income tax estimator 2016":
Quote
Individual receives $28,571 in gross dividend income ($20,000 net dividend and $8,571 in franking credits) and no other income. Tax resident for the full year. $0 tax payable and franking credits fully refunded. Note: $8,571 in franking credit assumes dividends are fully franked and company tax rate of 30%.

Screenshot below:
http://imgur.com/a/P3W40

Link to estimator tool:
https://www.ato.gov.au/calculators-and-tools/Income-tax-estimator/

However I can't seem to find where I can input "Franking tax offset (imputation credit)" into the 2016 tax estimator tool. Any ideas?

Isn't there a simple and a more complex calculator on the ATO site. In any case, if you put your income as being ~$28000 from shares, once it spits back your tax bill - I believe all you have to do is take the franking credit off that - to find out what your tax bill is. 

(so if you say you have income from shares of ~28000 and it says your tax is ~3000, You should get about ~3000-$8500 = $5500 back from the ATO.

Ozstache

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Re: Australian Investing Thread
« Reply #2161 on: August 07, 2016, 05:25:11 PM »
In any case, if you put your income as being ~$28000 from shares, once it spits back your tax bill - I believe all you have to do is take the franking credit off that - to find out what your tax bill is. 
That is my understanding as well ie. you gross up your income to $28571, work out what tax is payable on that then subtract the franking credit from the tax payable. It is done this way to make the tax calculation compatible with whatever tax bracket you actually fall in.

I couldn't find where to input franking credits in the 2016 calculator linked either, so the franking credits have to be subtracted manually in the last step.

Stimulated

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Re: Australian Investing Thread
« Reply #2162 on: August 07, 2016, 09:13:24 PM »
Hi, question about prioritisation.

Should I be maximising concessional superannuation salary sacrifice payments to my limit of $30,000, or should I be using the money instead to pay off my mortgage?

If I pay extra into super, paying off my mortgage will be delayed by about 1 year at 3.9%.  If I continue to put all my money into paying off the mortgage it will be gone by around April 2017.

So it seems that its a no-brainer to pay extra into super but I wanted to check if I had missed anything?
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Ozstache

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Re: Australian Investing Thread
« Reply #2163 on: August 08, 2016, 12:20:49 AM »
Hi, question about prioritisation.

Should I be maximising concessional superannuation salary sacrifice payments to my limit of $30,000, or should I be using the money instead to pay off my mortgage?

If I pay extra into super, paying off my mortgage will be delayed by about 1 year at 3.9%.  If I continue to put all my money into paying off the mortgage it will be gone by around April 2017.

So it seems that its a no-brainer to pay extra into super but I wanted to check if I had missed anything?
That depends on how many years between the age you intend to FIRE (if indeed FIRE is your intention) and your preservation age. Putting too much into super, despite its significant tax advantages, early on can work against a young FIRE age quite simply because you can't access it for such a long time. See http://forum.mrmoneymustache.com/investor-alley/australia-early-retirement-planning-calculator/msg1011873/#msg1011873 for further discussion of this concept.

Stimulated

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Re: Australian Investing Thread
« Reply #2164 on: August 08, 2016, 12:27:05 AM »
Hi, question about prioritisation.

Should I be maximising concessional superannuation salary sacrifice payments to my limit of $30,000, or should I be using the money instead to pay off my mortgage?

If I pay extra into super, paying off my mortgage will be delayed by about 1 year at 3.9%.  If I continue to put all my money into paying off the mortgage it will be gone by around April 2017.

So it seems that its a no-brainer to pay extra into super but I wanted to check if I had missed anything?
That depends on how many years between the age you intend to FIRE (if indeed FIRE is your intention) and your preservation age.

Between 8 and 13 years until FIRE.  Nearer 8 hopefully.  And 13 years until Super preservation age.
« Last Edit: August 08, 2016, 01:00:17 AM by Stimulated »
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faramund

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Re: Australian Investing Thread
« Reply #2165 on: August 08, 2016, 01:54:14 AM »
Hi, question about prioritisation.

Should I be maximising concessional superannuation salary sacrifice payments to my limit of $30,000, or should I be using the money instead to pay off my mortgage?

If I pay extra into super, paying off my mortgage will be delayed by about 1 year at 3.9%.  If I continue to put all my money into paying off the mortgage it will be gone by around April 2017.

So it seems that its a no-brainer to pay extra into super but I wanted to check if I had missed anything?
That depends on how many years between the age you intend to FIRE (if indeed FIRE is your intention) and your preservation age.

Between 8 and 13 years until FIRE.  Nearer 8 hopefully.  And 13 years until Super preservation age.
I'm a bit similar 5 year until FIRE, and then 9 after that until I get super. So I don't put extra into super, but also, not into my mortgage, but .... into shares directly.

Stimulated

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Re: Australian Investing Thread
« Reply #2166 on: August 08, 2016, 01:59:20 AM »

I'm a bit similar 5 year until FIRE, and then 9 after that until I get super. So I don't put extra into super, but also, not into my mortgage, but .... into shares directly.

That was another option for me, I just wondered whether that was tax efficient given the 15% tax rate we are charged to put the $30k into super and the fact that eventual super payouts are tax free.  It seems to buy shares out of fully-taxed income and then be taxed again on the dividends is more expensive?
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marty998

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Re: Australian Investing Thread
« Reply #2167 on: August 08, 2016, 02:01:06 AM »
That's the choice you have make Stimulated. Everyone is faced with that trade off and there is no one right answer for all circumstances.

ynotme

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Re: Australian Investing Thread
« Reply #2168 on: August 08, 2016, 04:35:44 AM »
I think of super as old lady/man money and a buffer when I need it later. If you believe you will have enough outside of super to see you through to preservation age, then you could salary sacrifice and make the most of it. If you have a lot in super already and need to build up funds outside super to get you through till you can access your super, then it may be better to keep the money outside of it.

Stimulated

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Re: Australian Investing Thread
« Reply #2169 on: August 08, 2016, 04:39:01 AM »
I think of super as old lady/man money and a buffer when I need it later. If you believe you will have enough outside of super to see you through to preservation age, then you could salary sacrifice and make the most of it. If you have a lot in super already and need to build up funds outside super to get you through till you can access your super, then it may be better to keep the money outside of it.

Balanced approach.  Like it.  Will have to do some sums.
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faramund

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Re: Australian Investing Thread
« Reply #2170 on: August 08, 2016, 06:44:19 PM »

I'm a bit similar 5 year until FIRE, and then 9 after that until I get super. So I don't put extra into super, but also, not into my mortgage, but .... into shares directly.

That was another option for me, I just wondered whether that was tax efficient given the 15% tax rate we are charged to put the $30k into super and the fact that eventual super payouts are tax free.  It seems to buy shares out of fully-taxed income and then be taxed again on the dividends is more expensive?

If you imagine having most of your income coming from super-tax free. You can then earn around 40-50K annually from share income with very low taxes - so I think I do have a bit of a tax hit in not putting money into super, but I don't think its so big when it comes out.

I'm in the above situation - I have a large amount in super because of compulsory allocations, and about one-third as much out of super.

I also like to use leverage/debt with all the associated risks of that, but with hopes of higher annual returns - I can do that with my out-of-super funds, but not with the in super funds.

Stimulated

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Re: Australian Investing Thread
« Reply #2171 on: August 08, 2016, 08:15:53 PM »
OK, so given that I have a lot of funds outside of super, including investment properties which I intend to sell gradually in the tax years after FIRE, taking the capital gain and investing it in equities as well as living off it, I think the correct option for me is to increase super contributions to give me greater tax-free income later on in retirement.

I think......
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Ozstache

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Re: Australian Investing Thread
« Reply #2172 on: August 08, 2016, 09:24:19 PM »
That depends on how many years between the age you intend to FIRE (if indeed FIRE is your intention) and your preservation age.
Between 8 and 13 years until FIRE.  Nearer 8 hopefully.  And 13 years until Super preservation age.
I take what you're saying here to mean you will have 5 years to run after you FIRE until you can access super (ie. 13 - 8).



Based on the above graph from the post I linked earlier, a 5 year run is achievable by an approximately 15% SWR (notwithstanding sequence of return risk that can be mitigated by holding mostly cash for such a short period and that it is a US-centric graph so a slightly lower SWR than shown is more applicable for Oz) ie. you will need approx 7 times your estimated annual FIRE expenses to get you through to preservation age, after which your super kicks in. If this is the case, once I knew I could produce that 7x expenses outside of super, I would then be loading up super too.

marty998

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Re: Australian Investing Thread
« Reply #2173 on: August 09, 2016, 04:28:31 AM »
More discussion in the papers today about super changes.

Scott Morrisson holding firm... his argument seems to be that Rich people are complaining about not being able to earn hundreds of thousands tax free in super earnings.

I think he's onto a winner... needs to hold firm on this. Even though it is not the proposal I wouldn't mind seeing the 15% tax on earnings come back on pension earnings

Eucalyptus

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Re: Australian Investing Thread
« Reply #2174 on: August 09, 2016, 04:40:47 AM »
More discussion in the papers today about super changes.

Scott Morrisson holding firm... his argument seems to be that Rich people are complaining about not being able to earn hundreds of thousands tax free in super earnings.

I think he's onto a winner... needs to hold firm on this. Even though it is not the proposal I wouldn't mind seeing the 15% tax on earnings come back on pension earnings

That's not a bad idea actually; set aside taxes on Super for future pensions.

I was surprised to find out the other week that compulsory super goes up to 12% in a few years. Not a bad thing at all. Did some calcs, and even with a potential FIRE date at 46 years old, and, given many years of little income/super due to study, I won't have much trouble past 60 when super cuts in. Luckily my fund is pretty low fee and well managed. If they remain gainfully employed for most of their lives from the age of early 20s to 60, most Australians in the future will easily get by on the compulsory employer 12%. Even if the extra 3% ends up really coming out of a lack of salary increases, I think its worth it.

Fresh Bread

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Re: Australian Investing Thread
« Reply #2175 on: August 09, 2016, 07:20:46 PM »
Hello everyone,

Ratesetter sent me an email today saying market rates for 5 year loans are at 12%. No doubt by the time everyone reads their email a lot more money will go on and bring the rate down but I just check and it's saying 12.7%.

Does anyone invest any significant amounts with them? I only have $500 invested in a 5 year loan to try it out but have had no problems. The first couple of loans made from my investment were even paid back early. It's not something we can stick a lot of money in right now as we need the money liquid but it's v tempting at 12%.

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Re: Australian Investing Thread
« Reply #2176 on: August 09, 2016, 07:39:13 PM »
Hello everyone,

Ratesetter sent me an email today saying market rates for 5 year loans are at 12%. No doubt by the time everyone reads their email a lot more money will go on and bring the rate down but I just check and it's saying 12.7%.

Does anyone invest any significant amounts with them? I only have $500 invested in a 5 year loan to try it out but have had no problems. The first couple of loans made from my investment were even paid back early. It's not something we can stick a lot of money in right now as we need the money liquid but it's v tempting at 12%.

That's fairly impressive. The 1 month rates are listed at 3.3%, which is slightly better than what I just got on an online savings account with Rabobank (3.25%, reverts to 2.3% in four months). I might put some in it when my honeymoon rate expires.

Fresh Bread

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Re: Australian Investing Thread
« Reply #2177 on: August 09, 2016, 07:47:11 PM »
And if anyone wants to use my referral link I would be more than happy to provide it ;)

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Re: Australian Investing Thread
« Reply #2178 on: August 09, 2016, 09:32:43 PM »
Using ETFs as equity for home deposit

Is this possible in Australia? How does it work?

Currently I'm saving for a deposit for a PPOR, but it strikes me that it could work out better for FIRE if I instead invested this money directly into ETFs now, and then was able to use the equity in them to get a loan. Is this possible, similar to how it is done with leveraging one property off another?

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Re: Australian Investing Thread
« Reply #2179 on: August 09, 2016, 10:04:38 PM »
Hi all,

I was hoping to get your thoughts on a fund available through my super.
There is a fund available called Perpetual Wholesale Geared Australian Share Fund.
The fund essentially gears up (for free) and allows me double the exposure to the shares they have invested in.

The management cost is a percentage of gross asset value, so 1.17%, at a gearing level of 50% becomes 2.34%.

Now I know this is a very high fee, but to gain double the exposure, with no risk of a margin call, it could almost be worth it…

I am not the greatest fan of their stock picks, with a significant exposure to big banks, top 10 below:
•   Commonwealth Bank of Australia 6.6%
•   Woolworths Ltd 6.5%
•   ANZ Banking Group Ltd. 6.0%
•   Boral Limited 4.7%
•   National Australia Bank Limited 4.5%
•   Premier Investments Limited 4.4%
•   QBE Insurance Group Limited 4.2% Z
•   Energy Ltd. 4.1%
•   Westpac Banking Corporation 4.1%
•   Reece Limited 3.8%

But I was wondering what you thought about the concept, and the fund as a whole, in order to get greater exposure at a fairly decent rate?

Cheers!

faramund

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Re: Australian Investing Thread
« Reply #2180 on: August 10, 2016, 01:36:00 AM »
Using ETFs as equity for home deposit

Is this possible in Australia? How does it work?

Currently I'm saving for a deposit for a PPOR, but it strikes me that it could work out better for FIRE if I instead invested this money directly into ETFs now, and then was able to use the equity in them to get a loan. Is this possible, similar to how it is done with leveraging one property off another?
Well, you can certainly take out a margin loan - but that's risky if a lot, and a high-ish interest rate.

Interestingly, I'm in the same situation, we are going to upgrade our house, and I will be talking to a bank next week about using my shares as equity for that - I'll report back next week on how it goes.

marty998

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Re: Australian Investing Thread
« Reply #2181 on: August 10, 2016, 04:32:15 AM »
Geared funds generally don't bounce well after bear markets... the fund always gets creamed because of the impacts of leverage, and there's not enough capital remaining when markets start to recover.

It will do very well in good times however.

marty998

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Re: Australian Investing Thread
« Reply #2182 on: August 10, 2016, 04:54:56 AM »
CBA result released this morning. Profits up slightly however impact of the capital raising last year was a drag on EPS. Dividend is flat for the year at $4.20 per share.

Loan impairment expense is starting to tick up, not withstanding exceptionally low interest rates a growing number of people are having trouble with their mortgages.

Transurban released a pretty solid result. Great position to be in - monopoly provider of motorways to cash-strapped governments around the world. Good business model that will always work, provided the masses continue to drive cars.

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Re: Australian Investing Thread
« Reply #2183 on: August 10, 2016, 08:57:20 PM »
Geared funds generally don't bounce well after bear markets... the fund always gets creamed because of the impacts of leverage, and there's not enough capital remaining when markets start to recover.

It will do very well in good times however.

Thanks Marty, I felt the pain between Aug'14 and the beginning of this year.
I might just leave what I have already put in the fund in there and put the rest in index funds.

See how we go? :)

slothman

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Re: Australian Investing Thread
« Reply #2184 on: August 11, 2016, 05:21:39 AM »
In any case, if you put your income as being ~$28000 from shares, once it spits back your tax bill - I believe all you have to do is take the franking credit off that - to find out what your tax bill is. 

(so if you say you have income from shares of ~28000 and it says your tax is ~3000, You should get about ~3000-$8500 = $5500 back from the ATO.

Wow I can't believe I made such a rookie error. Many thanks for clearing that up!

Fixed such that taxable income is $20,542 ($14,379 in dividends and $6,163 in franking credits) = 100% refund of franking credits and $0 tax payable
http://imgur.com/a/ytq5Z

« Last Edit: August 11, 2016, 05:26:05 AM by slothman »

marty998

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Re: Australian Investing Thread
« Reply #2185 on: August 11, 2016, 05:32:46 AM »
Telstra announced a gigantic buyback today...

Underlying result was pretty ordinary, boosted by one-off asset sales.

Market didn't like it. Watch the SMSFs buy in for the buyback and strip the franking credits which will more than offset the capital losses. Only the ATO loses...

Eucalyptus

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Re: Australian Investing Thread
« Reply #2186 on: August 17, 2016, 08:03:25 PM »
Some questions for others about bonds.

1. Do people worry about geographical diversifying their bonds, eg, holding Aus bond etfs as well as OS bond etfs (eg some kind of global bond etf)?

2. It seems that there isn't an unhedged international bond etf available in Aus, all of them listed on the ASX are hedged. Is hedging ok with international bonds?

pistolpete

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Re: Australian Investing Thread
« Reply #2187 on: August 18, 2016, 11:44:09 PM »
Just a quick question from left field , im wondering who here invest solely in their own name at their own marginal tax rate compared to others who have set up a family trust or discretionary trust of some sort to split income and or dividends?!

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Re: Australian Investing Thread
« Reply #2188 on: August 19, 2016, 03:26:00 AM »
Me. I don't have enough right now to make a DT worthwhile.

I intend to have enough down the line... so you can say I've made the mistake of not effectively future planning my affairs. But nobody knows the future for sure.

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Re: Australian Investing Thread
« Reply #2189 on: August 19, 2016, 03:28:13 AM »
Just a quick question from left field , im wondering who here invest solely in their own name at their own marginal tax rate compared to others who have set up a family trust or discretionary trust of some sort to split income and or dividends?!
Bigchrisb has a trust.. have a look at his journal, there are some details there.
Journalling at Happy Aussie Downshifter

marty998

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Re: Australian Investing Thread
« Reply #2190 on: August 19, 2016, 03:31:23 AM »
AMP released another awful result. There is something fundamentally broken with that company.

FUM not growing in line with system which means the Wealth division isn't performing and Insurance division posted poor earnings as well. Bright spot was the banking division, however it's coming off a very low base and anyone can make money while there's a property boom on.

AMP Capital Investors division will continue to shrink as fee pressures bite. They used to have some extraordinary fat margins... now, not so much with all the competition and fees rates being shrunk.

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Re: Australian Investing Thread
« Reply #2191 on: August 19, 2016, 07:12:52 PM »
Some questions for others about bonds.

1. Do people worry about geographical diversifying their bonds, eg, holding Aus bond etfs as well as OS bond etfs (eg some kind of global bond etf)?

2. It seems that there isn't an unhedged international bond etf available in Aus, all of them listed on the ASX are hedged. Is hedging ok with international bonds?

Hi Eucalyptus - I hold some VIF in my portfolio for the very reason you mention.

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Re: Australian Investing Thread
« Reply #2192 on: August 19, 2016, 07:32:16 PM »
Some questions for others about bonds.

1. Do people worry about geographical diversifying their bonds, eg, holding Aus bond etfs as well as OS bond etfs (eg some kind of global bond etf)?

2. It seems that there isn't an unhedged international bond etf available in Aus, all of them listed on the ASX are hedged. Is hedging ok with international bonds?

Hi Eucalyptus - I hold some VIF in my portfolio for the very reason you mention.

Yeah, VIF looks good with 885 holdings of BBB- to AAA rated bonds, with a good geographical distribution.

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Re: Australian Investing Thread
« Reply #2193 on: August 19, 2016, 09:14:16 PM »
AMP released another awful result. There is something fundamentally broken with that company.
yeah my folks have some which I've been trying to tell them to sell... they say they got them for free so it doesn't really matter !

marty998

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Re: Australian Investing Thread
« Reply #2194 on: August 20, 2016, 05:52:05 AM »
AMP released another awful result. There is something fundamentally broken with that company.
yeah my folks have some which I've been trying to tell them to sell... they say they got them for free so it doesn't really matter !

Funny that... my parents said the same thing until I sold theirs many years back in a small shareholder sale facility that was open at the time.

Peak share price on day 1 of listing in 1998 and it has been downhill pretty much ever since. Executives still hand themselves their bonuses for keeping the lights on & the cosy oligopoly of the large Wealth Management players in Australia ensures they are still limping along.

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Re: Australian Investing Thread
« Reply #2195 on: August 21, 2016, 03:03:49 AM »
Thanks to Marty and Trevor for your thoughts on my tax question the other week. Life has gotten crazy since then and haven't gone back to my return yet. I thought I shouldn't treat it as a managed fund because it was listed but in retrospect that doesn't really make sense.

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Re: Australian Investing Thread
« Reply #2196 on: August 24, 2016, 02:19:39 AM »
Hey guys,

I have a bit of a noob question regarding buying ETFs that's been troubling me. What is the general rule of thumb for parcel size relative to transaction cost? I'm using commsec at the moment at about $20/transaction and buying in 2k or 3k lots (accumulating index funds mainly). What does everyone prefer for minimum share parcel sizes to negate transaction costs? I've heard 1% of a good rule of thumb.

Cheers
Crabby
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Re: Australian Investing Thread
« Reply #2197 on: August 24, 2016, 02:36:26 AM »
What does everyone prefer for minimum share parcel sizes to negate transaction costs? I've heard 1% of a good rule of thumb.

I tend to save up and buy in $5k minimum lots, which is approx 0.4%.

tim

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Re: Australian Investing Thread
« Reply #2198 on: August 24, 2016, 04:10:01 PM »
What does everyone prefer for minimum share parcel sizes to negate transaction costs? I've heard 1% of a good rule of thumb.

I tend to save up and buy in $5k minimum lots, which is approx 0.4%.

tim
i would say 1% max. $5k is better if you can, but depending how long it takes you to accumulate $5k, if more than 4 months, it might be better to invest at least quarterly and incur the slightly higher brokerage whilst staying within 1%.

englyn

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Re: Australian Investing Thread
« Reply #2199 on: August 24, 2016, 08:31:30 PM »
If it's taking months to accumulate $5k, I woulda gone for the managed fund instead of ETF