Author Topic: Australian Investing Thread  (Read 791771 times)

FFA

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Re: Australian Investing Thread
« Reply #1600 on: December 30, 2015, 06:14:49 AM »
Newly post-divorce I now find myself with no job and no home, no debt but I am cashed up with cash of 450k, shares (CBA,NAB, Telstra) worth 230k and super of 240k.  I was retrenched from the resources industry last year and now at 60 seemingly unemployable.
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I am going around in circles trying to figure out a strategy for the next 7 years before I can apply for a pension. I would like to have a coherent idea before I go to a financial planner.

I also agree a financial planner (fixed fee, no commissions) seems a good idea to get guidance on the combination of your cash/shares, super and how it fits with pension eligibility. Before that it would certainly be worthwhile to read (or re-read) the relevant MMM blog posts, and perhaps bogleheads.org if you want to delve deeper into investment philosophy and planning.

I think the rent or buy decision is an important crossroads to decide. If you opt to buy with cash, then your investment funds will be limited. If you decide to rent, then you have substantial investment funds to allocate.

A few further thoughts on the investment aspects :

Share portfolio : I would encourage you to diversify. Two oz banks and a Telco is a very narrow portfolio for 230k. You could consider swapping (at least some if not all) for a few index ETF's (e.g. Vanguard Australian Shares - VAS and Vanguard Global Shares - VGS) and cover the entire world. However you need to weigh up any capital gains tax liabilities before selling the CBA/NAB/TLS.

Cash : I'd recommend looking into high interest savers such as ING (100k limit), RAMS (250k limit, no withdrawals though, so might not be suitable!) and Ubank (200k limit). You can achieve 3.3-3.5% if you jump through a few hoops (e.g. make a deposit $200 or $1000 per month; can just shuffle money between them if need be). You need to live off this interest so I would be getting the absolute best rate possible, but you do need to be disciplined/focused to meet the bonus interest criteria each month.

Super : I'd recommend reading superannuationfreak.blogspot.com . My wife is in the hostplus indexed balanced option, which I believe is the best value in town, so I suggest it's worth a look. If the asset allocation 75/25% might be a bit aggressive, you could dampen it, e.g. 80-90% indexed balanced / 10-20% Cash. Although on an overall basis, you already have quite a large allocation of cash. Anyway as I said earlier, this comes back to the key question of whether you opt to buy a place.

While you're on superannuationfreak's blog, I'd definitely recommend reading this post too : http://superannuationfreak.blogspot.com.au/2014/10/everything-you-need-to-know-about.html

Good luck !

The Traveller

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Re: Australian Investing Thread
« Reply #1601 on: December 30, 2015, 08:24:32 PM »
Many thanks everyone for your suggestions.

Using the FFA/dungoofed strategy provides a taxable income of around 25k/year albeit the safer path of cash and bonds does seem to limit portfolio capital growth and renting at 200/week to $250/week would use up 40% to 50% of income, which short of finding some type of employment, leaves a very frugal lifestyle.

Happy suggested buying a PPOR before 67 (well in my case before 66.5 years)

I had come to that conclusion myself as renting in retirement is an increasingly expensive option and pension rules currently benefit the house owner over renter. So using the incoming 2017 changes at 66 depending what my asset base was I could purchase or build a PPOR that leaves me within the range of the Asset free threshold of 250k and pension cut-off threshold of 547k.

Somewhat depends on the rules of the day in 2 or 3 changes of governmentís time.

So itís the interim period I need to work through.

Purchasing a house Option:
In country Victoria in a small to medium town I could purchase a cheap house for between 120k to 200k. In say Ipswich area of Brisbane 180k to 250k and stamp duty is half cost of Victoria. If I used 200k to 250k inc stamp duties and legals to purchase then my cash reduces to 200k to 250k.

This together with share portfolio of 230k at an overall non-super portfolio earnings of 4%pa (as per FFA/Dungoofed strategy) gives and income of 17k to 19k less rates.

This seems to provide more options including renting the property if I got a job elsewhere or if I spent a year or two away. Or I could get a lodger. After 6 years I would hopefully have some tax free capital growth on upgrading.

I have a lot more reading to do and thanks for the various links

FFA

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Re: Australian Investing Thread
« Reply #1602 on: December 30, 2015, 10:19:15 PM »
Hi traveller,

if you buy a place and let's say you have 230k residual cash. that leaves your AA (ex super) at 50/50 oz shares/cash.

It's actually quite a reasonable split between growth and defensive assets for someone who's 60 years old. Of course is also depends on your risk tolerance and how your super is invested, which I don't really know.

Anyway, it's a good coincidence that your natural position falls this way, at least the high level AA is somewhere near the right spot.

What needs attention is the sub split within Growth and Defensive. Especially the Growth which is very high risk / undiversified, although the franked dividend yield from those shares is nice. I'd suggest at least 20% international exposure (e.g. VGS). And would rather see at least half the ASX exposure in an index ETF (e.g. VAS) instead of the direct shares. As I mentioned before, CGT exposure on selling the CBA/NAB/TLS needs to be considered before selling to buy into VAS/VGS. If you bought a long time ago and have very low cost base (high CG), then you might stagger sales over the years to use up any tax free thresholds and avoid CGT (due to nil marginal tax rate). If you have flexibility in your super investment choice, another way is to hold more international shares in super, to offset the lack of international shares outside. This also helps your income in the interim period, since the VGS yield is lower.

If you do end up working again, definitely ask the financial adviser about super strategies - salary sacrifice / transition to retirement / recontribution. There's lots you can do, some of them are loopholes likely to be closed very soon by the Govt. I don't know details as it's too far off for me, except that it can make a big difference for someone over 55, so I suggest you look into !
« Last Edit: December 30, 2015, 10:28:44 PM by FFA »

Primm

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Re: Australian Investing Thread
« Reply #1603 on: December 31, 2015, 03:10:18 AM »
Buy in Ipswich! We did, primarily for the cost. $260k for a gorgeous house when Brisbane is at least double that. No-brainer, and we're in the most awesome little old community (established as well as age of occupants...) with a crime rate of practically zero because all the oldies sit on their verandahs all day and call the cops any time anyone suspect comes around.

Primm

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Re: Australian Investing Thread
« Reply #1604 on: December 31, 2015, 03:24:29 AM »
And while I'm here, I have a question as well.

Changing jobs so will have access to a "self-invest" option for my super which I plan to take advantage of.

I'll be transferring around the $200k mark. My options are as follows. I'm 46 and realistically won't be retiring for another 10 years (started this caper a bit late), so I'd love to hear thoughts on how I should break up my investments.

VAS     Vanguard Australian Shares Index / MER 0.15%
VSO    Vanguard MSCI Australian Small Companies Index / MER 0.30%
VHY     Vanguard Australian Shares High Yield / MER 0.25%
VAP     Vanguard Australian Properties Securities Index / MER 0.25%
DJRE    Dow Jones Global Real Estate Fund / MER 0.50%
VTS     Vanguard US Total Market Shares Index / MER 0.05%
VEU     Vanguard All-World ex-US Shares Index / MER 0.14%
WXHG  SPDR S&P World ex Australia (Hedged) Fund / MER 0.48%
WDIV  SPDR S&P Global Dividend Fund / MER 0.50%
VGE     Vanguard FTSE Emerging Markets Shares ETF / MER 0.48%
VGB     Vanguard Australian Government Bond Index / MER 0.20%
OZF     SPDR S&P/ASX 200 Financials ex A-REIT Fund / MER 0.40%
OZR     SPDR S&P/ASX 200 Resources Fund / MER 0.40%

Rules are can only invest a maximum of 85% in shares or ETFs (so 15% has to stay in my base account) and can't have more than 25% of total amount in any single ETF / share.

Thank you!

superannuationfreak

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Re: Australian Investing Thread
« Reply #1605 on: December 31, 2015, 04:56:40 AM »

Changing jobs so will have access to a "self-invest" option for my super which I plan to take advantage of.


Review the non "self-invest" options also.  You may find there are options which are also inexpensive and don't incur extra admin fees (often $180-400 p.a.) or brokerage.  That said, there are some nice ETFs in the list (I primarily like VAS, VEU, VTS from that list but YMMV).  You may need to supplement with those in-built investment choices or LICs (if offered) to get the allocation you want, particularly if you want more than 25% Australian Shares.
« Last Edit: December 31, 2015, 04:59:16 AM by superannuationfreak »

FFA

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Re: Australian Investing Thread
« Reply #1606 on: December 31, 2015, 05:08:47 AM »
hi primm, your AA should be set based on your risk tolerance/appetite, which you didn't really tell us about.

Some use rules of thumb like "age in bonds", which would mean 54% shares / 46% bonds... A Balanced setting. If you went with this, you might choose something like :

VAS 25%/ VEU 15% / VTS 14% = 54%
VGB 25% / Other Fixed income option or Cash in base account 21% = 46%

Maybe a better way is to consider how comfortable you are to see your super balance fall from 200k to 175k (ok?) or a tad further to 150k (still hanging in ?) .... 125k (eek!) ... Think back to 2008 and try to recall/visualise how you will cope.

Let's say you decide 125k is your max pain threshold. If we assume shares can fall 50% in a bear market, whereas defensive assets preserve capital. Then it suggests an allocation of 150k shares / 50k defensive. (In this stress test the shares have fallen from 150 to 75k, causing the balance to be at 125k.) It turns out more aggressive than the rule of thumb, more like a Growth option. Possible allocation might be :

VAS 25%/ VHY 13%/ VEU 19% / VTS 18% = 75%
VGB 10% / Other Fixed income option or Cash in base account 15% = 25%

As per superannuationfreak, I like the straightforward lowest cost ETF's. Keep the portfolio simple yet well diversified. I'm not into property, personally I feel VAS has enough. I added VHY in the second example because VAS was max'd to 25%. VSO sounds appealing but the small ords index is not a good benchmark, its one of the few sectors you are better off with an active manager. Hope it gives food for thought.

Happy New Year to all  !!
« Last Edit: December 31, 2015, 05:10:21 AM by FFA »

deborah

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Re: Australian Investing Thread
« Reply #1607 on: December 31, 2015, 02:20:20 PM »
I am amazed. The Motley fool is recommending ETFs - see http://www.canberratimes.com.au/money/investing/five-simple-trades-to-get-you-started-with-share-investment-20151230-glx5ix.html

Admittedly, they also recommend that you invest only 50% in them, and the rest in Westfarmers and Telstra etc., but as they are a stock picking service, it is quite surprising.

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Re: Australian Investing Thread
« Reply #1608 on: December 31, 2015, 02:34:50 PM »
Interesting. Thinking about the psychology, if you had 50% of your portfolio in ETFs then three single stocks then it only takes one of them being a winner to get you hooked on the stock picking game. A bit like the pokies (ie get one small jackpot while losing money overall keeps you hooked) or golf (most of the day spent in the rough but one beautiful shot will get you coming back again next time).

chasingthegoodlife

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Re: Australian Investing Thread
« Reply #1609 on: December 31, 2015, 04:00:23 PM »
Traveller - I recently  bought a house in country Victoria and have been very very happy with the decision so far.

Which towns are you considering?

A few things to think about if you plan on purchasing the property as your long term retirement home are the accessibility to specialist medical services and whether the property will be accessible and easy to maintain as you age (eg stairs, land size, no shower-over-bath etc)

Also, you mention potential for capital gains on the property and subsequent upgrade - if this is your hope look closely into the markets you are considering. Much of country vic does not have the same potential for capital gains as melbourne and markets can be 'slow' too - many houses in my town are listed for a year  before selling.

Sorry to derail the investing thread - pm me if you want to discuss in more detail.


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chasingthegoodlife

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Re: Australian Investing Thread
« Reply #1610 on: December 31, 2015, 04:06:42 PM »
Superannuation freak has a good point about admin fees for self invest options - in my fund they do not seem worth it despite low MER. Does anyone here have a SMSF, and if so have you found it worth it? I imagine it would only be efficient for very large balances.


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Primm

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Re: Australian Investing Thread
« Reply #1611 on: December 31, 2015, 04:14:31 PM »
hi primm, your AA should be set based on your risk tolerance/appetite, which you didn't really tell us about.

True. Basically I love my job, and while I would like to be retired in about 10 years if the shit hit the fan and I had to keep working that wouldn't be the end of the world. So for my age (I really hate that term) I am quite risk-tolerant.

Other factors which contribute to this are no dependent children and a husband who is an only child with an expected inheritance when we hit retirement age (parents are late 80s and not in good health) of not much more than a house, but it's in a good tourist area with estimated value at the moment of about $450k. Also we will have paid off our mortgage and finished renovations in our "forever" house by then as well.


Quote
Some use rules of thumb like "age in bonds", which would mean 54% shares / 46% bonds... A Balanced setting. If you went with this, you might choose something like :

VAS 25%/ VEU 15% / VTS 14% = 54%
VGB 25% / Other Fixed income option or Cash in base account 21% = 46%

Maybe a better way is to consider how comfortable you are to see your super balance fall from 200k to 175k (ok?) or a tad further to 150k (still hanging in ?) .... 125k (eek!) ... Think back to 2008 and try to recall/visualise how you will cope.

Let's say you decide 125k is your max pain threshold. If we assume shares can fall 50% in a bear market, whereas defensive assets preserve capital. Then it suggests an allocation of 150k shares / 50k defensive. (In this stress test the shares have fallen from 150 to 75k, causing the balance to be at 125k.) It turns out more aggressive than the rule of thumb, more like a Growth option. Possible allocation might be :

VAS 25%/ VHY 13%/ VEU 19% / VTS 18% = 75%
VGB 10% / Other Fixed income option or Cash in base account 15% = 25%

As per superannuationfreak, I like the straightforward lowest cost ETF's. Keep the portfolio simple yet well diversified. I'm not into property, personally I feel VAS has enough. I added VHY in the second example because VAS was max'd to 25%. VSO sounds appealing but the small ords index is not a good benchmark, its one of the few sectors you are better off with an active manager. Hope it gives food for thought.

Happy New Year to all  !!

That gives me food for thought, thanks for that. I haven't yet consolidated my old super into the new one so it's all academic at this stage. I forgot about including the 15% of "non-invested" funds as being part of the safe cash option too.

Review the non "self-invest" options also.  You may find there are options which are also inexpensive and don't incur extra admin fees (often $180-400 p.a.) or brokerage.  That said, there are some nice ETFs in the list (I primarily like VAS, VEU, VTS from that list but YMMV).  You may need to supplement with those in-built investment choices or LICs (if offered) to get the allocation you want, particularly if you want more than 25% Australian Shares.

Thank you. I honestly was a bit excited about the fact that I could pick and choose and didn't think to consider the extra cost, will have to do some research into how much that will be, including the cost of adding my contributions on a reasonably regular basis as well.

Cheers guys, and Happy New Year to you too!

chasingthegoodlife

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Re: Australian Investing Thread
« Reply #1612 on: December 31, 2015, 04:14:48 PM »
Superannuation freak has a good point about admin fees for self invest options - in my fund they do not seem worth it despite low MER. Does anyone here have a SMSF, and if so have you found it worth it? I imagine it would only be efficient for very large balances.


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steveo

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Re: Australian Investing Thread
« Reply #1613 on: December 31, 2015, 06:39:14 PM »
Superannuation freak has a good point about admin fees for self invest options - in my fund they do not seem worth it despite low MER. Does anyone here have a SMSF, and if so have you found it worth it? I imagine it would only be efficient for very large balances.

For me personally I don't think its worth it. My fund is an industry super fund which appears to simply index with associated minimal costs and good performance.

FFA

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Re: Australian Investing Thread
« Reply #1614 on: December 31, 2015, 07:30:22 PM »
ditto, me and mrs ffa are with industry super funds in index options. I can't see the value of smsf even for large balances IF you're an index investor.

Deborah, re: the Motley Fool, yes I was also surprised they endorse Vanguard. I mentioned upthread that I recently took a subscription and this is one aspect that gave them credibility in my eyes. One thing to be aware of with MF as I also said earlier, their advertising is very spammy/full-on. A lot of the free articles you see in google and picked up by the media are by freelancers. It's completely different from what you see as a paid member, when you get the stock recommendations and education pieces from the MF team (e.g. Scott Phillips, Andrew Page etc). Also regarding the endorsement of Vanguard, it's actually not a new thing. I noted one of Bogle's key speeches "Investing with Simplicity" he mentions it then too, and that was 17 years ago !

happy

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Re: Australian Investing Thread
« Reply #1615 on: December 31, 2015, 10:55:46 PM »
Superannuation freak has a good point about admin fees for self invest options - in my fund they do not seem worth it despite low MER. Does anyone here have a SMSF, and if so have you found it worth it? I imagine it would only be efficient for very large balances.

For me personally I don't think its worth it. My fund is an industry super fund which appears to simply index with associated minimal costs and good performance.
I've also come to this conclusion after investigating SMSF in the last 6 months.  Fee-wise, much cheaper to stay in my industry fund.  For the me the issue is having more direct control over my investments versus cost.
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Rob_S

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Re: Australian Investing Thread
« Reply #1616 on: January 01, 2016, 01:31:01 AM »
I have a SMSF lite with a retail fund. The costs are around $300 a month (from memory its about 0.3% of assets in direct investment) and I don't have all that much in it; $80,000 makes me feel a little sad given my age (wtf happened?). For the record it's invested $16,000 in the funds Aus index, $16,000 IHD, $16,000 VAS, $16,000 VHY and $18,000 VTS. I started it last year and viewed it as my training wheels for when I started to really invest. I got the pleasure of experiencing the August correct and subsequent tanking and to be honest didn't feel that bad. August was no GFC but at least I have a little more confidence in my risk tolerance.

Direct investing lets me pursue a low cost dividend strategy. Franking credits work to your favour in the super environment with its 15% tax rate leading to franking credits being paid to you in November.

The returns on my superfund pre the switch to direct investments had been opaque. I had no way of knowing how they came to the % return they did. With control over my investments I can see exactly the number of units/shares I have, when dividends and franking credits are paid and I get to see the DRP do its thing buying more shares. It now feels like a process that I can control and I now trust. It makes it feel more like your money and something I am interested in for the first time rather than the set and forget approach commonly held towards super.

A reason, beyond higher costs, to not go the whole SMSF route could well be the cheaper insurance available in a retail or industry product. You could leave a small amount in a industry fund with insurance attached and have the bulk of your funds in a SMSF if you want to hold onto cheap cover. I've seen plenty of people do this over the years.

With all that said I certainly see the appeal of a low cost industry fund. My wifes super is in HostPlus(?) and has done remarkably well in comparison to my retail fund. I'm hoping with direct investments things will improve. At least now I will know the returns are my fault.
« Last Edit: January 01, 2016, 01:38:57 AM by Rob_S »

deborah

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Re: Australian Investing Thread
« Reply #1617 on: January 01, 2016, 01:42:14 AM »
I have had an SMSF for a long time (I was trying to work it out, and I think it has been about 18 years). From time to time I have decided to get out of it because of the administration work, but each time I haven't liked the alternatives. Obviously things have changed while I have had it, because all the regulations change regularly. In the last few years I have been thinking more about getting rid of it. There are many more alternatives now that make it a less interesting alternative than it used to be, and fund fees have been going down as well.

Financially, I have done better with my SMSF than the alternatives I have been in from time to time. As these were all relatively short term, it could be argued that I wasn't in them for a reasonable timeframe for comparisons, but my money in the SMSF did better in the same time periods. The money is also THERE and it is mine. In the past, on several occasions I have had extreme difficulty in being able to transfer my super from one fund to another. In one case it took 6 months for me to get hold of my money. As I am retired I really like the ease with which I can do transfers (both in and out) - no waiting several days for the money to be in the account. I also like the transparency of an SMSF - you know exactly what you have.

I have been in alternatives when I was about to close the SMSF and at various times when my work wouldn't allow me to put my super into my SMSF.

Primm

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Re: Australian Investing Thread
« Reply #1618 on: January 01, 2016, 02:58:54 AM »
The thing is it's not an SMSF as such, it's a "self-directed" portion of an industry super fund (Qld gov - Q-super), so it comes with all the perks of low cost insurance etc. which obviously come out of the "you can't touch this" 15% part, which is why I'm even considering it.

https://qsuper.qld.gov.au/our-products/investment-options/self-invest/

happy

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Re: Australian Investing Thread
« Reply #1619 on: January 01, 2016, 04:01:10 AM »

The returns on my superfund pre the switch to direct investments had been opaque. I had no way of knowing how they came to the % return they did.

Agree, this irks me no end WRT my industry fund.
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Re: Australian Investing Thread
« Reply #1620 on: January 02, 2016, 07:52:10 PM »
Superannuation freak has a good point about admin fees for self invest options - in my fund they do not seem worth it despite low MER. Does anyone here have a SMSF, and if so have you found it worth it? I imagine it would only be efficient for very large balances.


We've had a SMSF for many years.  I think if you have a smaller balance, you're single or you're happy to invest in ETFs / ASX300 shares, then the industry funds will be a cheaper, easier option using their self directed options.  Gives you pretty good choice of investments and reasonable investment control.   This will be more than ample for most people.   If you want to invest in real estate or collectibles, you'll need to go the SMSF route.    We have property in our SMSF as well as equities (ETF's). With the franking credits and property depreciation, we don't pay any tax in our fund at all even though we've a decent chunk in non dividend smaller company / non franking credit international ETF's.   Being able to arrange / control your tax positions is one of the reasons I like SMSF's, as well as the absolute control you have over the funds and the ability to leverage.   

For the non-aussies amongst us, if you sell an asset (including a property) in your superfund once you're in pensions phase then there is ZERO capital gains tax payable.    The government will change this rule eventually, its far too generous, but they most likely grandfather any assets already held (which they have done in the past).



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Re: Australian Investing Thread
« Reply #1621 on: January 03, 2016, 07:12:31 PM »
Hi Traveller, I have found this discussion an interesting read, you certainly are in a good position in the sense that you have lots of different paths you can go down...anyway, thought I would add my 2c :)

Using the FFA/dungoofed strategy provides a taxable income of around 25k/year albeit the safer path of cash and bonds does seem to limit portfolio capital growth and renting at 200/week to $250/week would use up 40% to 50% of income, which short of finding some type of employment, leaves a very frugal lifestyle.

I am wondering if you have considered other accommodation options besides buying/renting a house? I'm always jealous of over 55s when I look for rentals in country Vic, because there are lots of (sometimes standalone) units limited to over 55s, and they are always in the best locations ie. quiet areas with easy access to shops/public transport. My 62yo MIL just moved into one in fact!

If you are living on your own, and would like to travel, renting one of these seems like it would be a good option - it would easily shave $50+ /week off expenses.

superannuationfreak

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Re: Australian Investing Thread
« Reply #1622 on: January 04, 2016, 02:38:23 AM »
The thing is it's not an SMSF as such, it's a "self-directed" portion of an industry super fund (Qld gov - Q-super), so it comes with all the perks of low cost insurance etc. which obviously come out of the "you can't touch this" 15% part, which is why I'm even considering it.

https://qsuper.qld.gov.au/our-products/investment-options/self-invest/

With QSuper I'd (personally) be more comfortable largely using their built-in low cost funds.  You pay 0.20% p.a. even on the self-invest portion, so ETFs can't really compete with 0.07% p.a. (plus 0.20% p.a. admin) for Australian and International Shares in particular (EDIT: Both are passively managed although I see their International is hedged back to AUD, I would ideally want at least half my International unhedged).  Their fees for cash are even lower and even the 0.26% (plus 0.20% admin) fee for Diversified Bonds will be hard to beat with an ETF (0.15% is the base fee + 0.11% last year in fees for outperformance, albeit you may not want as much of an emphasis on international fixed interest as the fund has).  So feel free to use their self-invest but I wouldn't turn up my nose at the passive Australian Shares component particularly.
« Last Edit: January 04, 2016, 02:43:05 AM by superannuationfreak »

marty998

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Re: Australian Investing Thread
« Reply #1623 on: January 04, 2016, 01:33:49 PM »
Chinese stock market down 7% yesterday and the mercy rule invoked with regulators closing it. Wall St down 400 points in sympathy.

Expect a pretty nasty open on the ASX this morning. We had a nice Santa rally over Christmas but someone has decided to stop the music for today anyway.

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Re: Australian Investing Thread
« Reply #1624 on: January 05, 2016, 03:52:04 PM »
Esuperfund is a very cost effective provider of SMSFs. The downside being you are forced to use the brokers they work with.
If you do all the admin and reporting yourself, the only costs you have to pay for an SMSF will be the audit fee and the ATO regulation fee.

For index investing though, I would stick with industry funds, Host plus, Sunsuper, Australian Super.

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Re: Australian Investing Thread
« Reply #1625 on: January 06, 2016, 01:43:47 AM »
A new site went live a few days ago called ETF watch. It's full of useful information about ETF's and LICs.

The guy who built the site says:

It is a database of all of the ETFs and most of the LICs available on the ASX.

It has been designed for investors to be able to filter a fund database and find funds that suit their needs. Some of the cool aspects i think are industry/region categorisations, historic performance, dividend yield, and LIC premium or discount to NAV/NTA (as well as 5 years worth of premium/discount history). There's also a blog and news feed and some general info on ETFs & LICs.

I've been poking around on it today and like what I see. I figured it's worth a share.

http://www.etfwatch.com.au/

nnls

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Re: Australian Investing Thread
« Reply #1626 on: January 06, 2016, 01:57:43 AM »
A new site went live a few days ago called ETF watch. It's full of useful information about ETF's and LICs.

The guy who built the site says:

It is a database of all of the ETFs and most of the LICs available on the ASX.

It has been designed for investors to be able to filter a fund database and find funds that suit their needs. Some of the cool aspects i think are industry/region categorisations, historic performance, dividend yield, and LIC premium or discount to NAV/NTA (as well as 5 years worth of premium/discount history). There's also a blog and news feed and some general info on ETFs & LICs.

I've been poking around on it today and like what I see. I figured it's worth a share.

http://www.etfwatch.com.au/

thanks for sharing Rob_s

limeandpepper

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Re: Australian Investing Thread
« Reply #1627 on: January 06, 2016, 07:01:08 AM »
Nice find Rob, thanks for that! :)

steveo

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Re: Australian Investing Thread
« Reply #1628 on: January 06, 2016, 06:51:33 PM »
Thanks for that ETF list. The problem is that now I can see so many options.

Rustycage

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Re: Australian Investing Thread
« Reply #1629 on: January 06, 2016, 08:10:56 PM »
The bloke that created the ETF list website is also a member of the Whirlpool forum: he's seeking some feedback so post here if you come up with anything

http://forums.whirlpool.net.au/forum-replies.cfm?t=2486777

For those that don't use Whirlpool at all, ignore most (probably all) of the other threads on the finance section. Lots of BS :D

FFA

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Re: Australian Investing Thread
« Reply #1630 on: January 06, 2016, 11:16:54 PM »
Thanks for that ETF list. The problem is that now I can see so many options.
haha yes, choice overload... seems a useful site. "The lowest cost ETF portfolio available on the ASX" is a good article. I still gravitate back to the 50/50 VAS/VGS default case. You can spend a lot more time, and come up with something more complicated, but I'm not sure it will be any better.

steveo

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Re: Australian Investing Thread
« Reply #1631 on: January 07, 2016, 12:25:30 AM »
Thanks for that ETF list. The problem is that now I can see so many options.
haha yes, choice overload... seems a useful site. "The lowest cost ETF portfolio available on the ASX" is a good article. I still gravitate back to the 50/50 VAS/VGS default case. You can spend a lot more time, and come up with something more complicated, but I'm not sure it will be any better.

I browsed a bunch of them and then thought VAS/VGS is nice and simple. I intend to also add VAF for a bond proportion within my asset allocations. Interestingly I checked my super fund out today and I can allocate single index options. At the moment I have a 90/10 allocation however I could change that in the future to have more international exposure and hold more ASX outside of super.

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Re: Australian Investing Thread
« Reply #1632 on: January 07, 2016, 01:32:17 PM »
As many you know, Vanguard has introduced new Fixed interest ETFs - VIF and VCF.

While this is welcome, any ideas why they have decided to make them hedged products?  Do they just want to remove any currency risk whatsoever even though it would seem likely that the AUD won't be going back up anytime soon.


superannuationfreak

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Re: Australian Investing Thread
« Reply #1633 on: January 07, 2016, 02:02:24 PM »
As many you know, Vanguard has introduced new Fixed interest ETFs - VIF and VCF.

While this is welcome, any ideas why they have decided to make them hedged products?  Do they just want to remove any currency risk whatsoever even though it would seem likely that the AUD won't be going back up anytime soon.

Yes, Vanguard are taking the "bonds are for safety" view. It makes sense since otherwise currency volatility would likely swamp the bond returns.

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Re: Australian Investing Thread
« Reply #1634 on: January 07, 2016, 04:07:14 PM »
Hi everyone, does anyone use MVW ? Market vectors equal weight ETF

This is a bit of a backflip by me, as I have been consistently against "smart" etf's and favouring the low fee/ market cap. However my ongoing unease about ASX concentration is leading me to think MVW is a good idea (not instead of VAS, but in conjunction with).

Currently I have my oz etf holdings in VAS 75-80% and IOZ 20-25%. The reason for IOZ was just to not have everything with Vanguard. Aside from that it doesn't give me much, the cost is slightly higher than VAS and the index is asx200 instead of 300, not much different.

So an idea currently hatching for me is to sell my IOZ and buy MVW. MVW cost at 0.35% is relatively double, but still in the bigger picture, not that bad. I can see value in it for the diversification, not having everything in the big 4 banks etc. An added benefit for me in this case i'm sitting on a decent capital loss on IOZ so I can realise that at the same time (though it's not the objective of this portfolio change, it would be a nice side benefit)

I'm thinking to re-target my oz etf's, something like 70% VAS / 30% MVW...

Would appreciate any feedback on MVW, especially if anyone uses it, how is the liquidity ? Any other thoughts ? Thanks !

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Re: Australian Investing Thread
« Reply #1635 on: January 07, 2016, 04:51:21 PM »
2015 was my first year of investing. I managed to get used to seeing my investments in the green and then in the red. But in the past week I went from about $300 profit for my year, and now I'm down a total of $1,000. That $1,000 psychological barrier is certainly a reality check.

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Re: Australian Investing Thread
« Reply #1636 on: January 07, 2016, 05:10:44 PM »
2015 was my first year of investing. I managed to get used to seeing my investments in the green and then in the red. But in the past week I went from about $300 profit for my year, and now I'm down a total of $1,000. That $1,000 psychological barrier is certainly a reality check.

Just keep making regular investments and don't stress it too much.  Look at these times as an opportunity to acquire more shares at cheaper prices.

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Re: Australian Investing Thread
« Reply #1637 on: January 07, 2016, 05:15:47 PM »
Thought you guys might be interested these eBooks on Investing by Mebane Faber which just dropped to $0: https://www.ozbargain.com.au/node/229386

These are really easy to read.

He puts forward a convincing argument in "Global Value" on investing in countries with low Cycically Adjusted Price to Earnings.  Not quite individual stock picking, more "country" stock picking.. i.e. plough into Russia and Euro countries at the moment with CAPE <10, and stay away from US with CAPE >25.  Interested in the groups thoughts on this.  I read a paper from him in 2012 leading to me invest using his approach and had some good returns, but it was in a market where there were good returns everywhere.

« Last Edit: January 07, 2016, 05:18:14 PM by sirdeets »

dungoofed

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Re: Australian Investing Thread
« Reply #1638 on: January 07, 2016, 05:25:42 PM »
Thanks sirdeets!

FFA - there is also QOZ from Betashares, and I know Colonial First State have a wholesale fund based on RAFI which might be available from your superannuation provider.

Personally I'll be going the stock-picking route to flatten my Australian exposure manually. But only when I see high-conviction bargains; the majority for me will remain in VAS. 

FFA

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Re: Australian Investing Thread
« Reply #1639 on: January 07, 2016, 06:09:49 PM »
Thanks dungoofed, i checked out QOZ too, but the top holdings still look very concentrated in the usual suspects. MVW on the other hand is quite different

cakie

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Re: Australian Investing Thread
« Reply #1640 on: January 07, 2016, 09:16:41 PM »
FFA, I have MVW, original aim was to have my 40% Aust stocks split:
25% VAS
10% MVW
5% VSO

However, this week I have been researching small cap LICs, thinking about adding one in instead of VSO (ATM I only have $1k each in VSO and MVW courtesy of free first month brokerage with Westpac)

I would love any recommendations, that ETF watch site was actually very helpful :) The LIC fees are putting me off though! Might invest in GC1 (newcomer) if I can get it cheap. Won't be for a couple of months at least though.

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Re: Australian Investing Thread
« Reply #1641 on: January 07, 2016, 09:18:36 PM »
After spending all of our $5k savings relocating one year ago, we now have $20k cash and $27k ETFs!! Most of that while living on one income - very exciting :D

DrowsyBee, lost similar amounts since we started in July (~$900), but it doesn't matter too much in accumulation phase...bought VGS yesterday $2 cheaper than previous purchase in October :) Got almost $200 in dividends on its way too...

FFA

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Re: Australian Investing Thread
« Reply #1642 on: January 07, 2016, 09:47:49 PM »
Hi cakie, looks like we're on the same wavelength with MVW then.....

I'm no expert on small cap LIC's. Suggest to check NTA premium in addition to fees. Sometimes the in vogue LIC managers have hefty premiums, even up to 30-40% which is crazy IMO. Others have hefty discounts which seem to stay that way for a long time.

I favour index over active in all cases except Oz small cap. The VSO index is a bad benchmark. Also many of these stocks are illiquid and there might be problems indexing.
 
Other options to consider
- keep life simple and delete Oz small cap.
- I took a motley fool subscription and am doing some direct small cap investing based on their recommendations. I would say this is more hobby/personal interest driven rather than rational economic optimisation of my portfolio


superannuationfreak

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Re: Australian Investing Thread
« Reply #1643 on: January 08, 2016, 12:21:13 AM »
FFA, I have MVW, original aim was to have my 40% Aust stocks split:
...
I would love any recommendations, that ETF watch site was actually very helpful :) The LIC fees are putting me off though! Might invest in GC1 (newcomer) if I can get it cheap. Won't be for a couple of months at least though.

These were my thoughts on MVW/QOZ vs. more focused small/mid-cap exposure:
http://forum.mrmoneymustache.com/investor-alley/australian-investing-thread/msg445457/?topicseen#msg445457

GC1 not only has a 1% base fee but a performance fee against the Small Ordinaries index (ugh).

Although I'm (personally) now leaning towards simplifying to VAS again.  My employer (and I'm sure many of the other industry funds) includes some more varied active ASX exposures and pays much less in fees (and does much more due diligence) than I am able to do as an individual investor.  Since they pay my Super into the fund, that may grow to be enough diversification/excitement (and a lower-tax environment in which to hold potentially higher-turnover strategies).

FFA

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Re: Australian Investing Thread
« Reply #1644 on: January 08, 2016, 01:08:26 AM »
thanks superannuationfreak, it's good to see we are gradually luring you back to this thread :)

for me, the MVW is a swap with IOZ. so it's not about small cap exposure, but really about a better diversified large/mid cap index. offset against 0.35 vs 0.19% MER. and with a positive side effect of a decent capital lost to harvest. I didn't pull the trigger today, might ponder it a bit more. also because I noticed MVW goes ex-div on Monday and I would rather not take the extra dividend (any pay tax on it, even after franking credits). Just watching it today the liquidity seems decent for MVW, better than IOZ. market markets keeping 3c bid vs ask nearly the whole day. IOZ is like that in the afternoon but can be much wider in the morning.

edit to add : regarding QOZ I got as far at the key facts sheet http://www.betashares.com.au/products/name/ftse-rafi-australia-200-etf/#each-keyFacts

.... just a glance at the top holdings made me immediately conclude - why bother, just take VAS. With MVW you are really getting a different portfolio, each holding is 2% or less, so for sure you will have a 20+% reduction in exposure to the big 4 banks.
« Last Edit: January 08, 2016, 01:19:33 AM by FFA »

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Re: Australian Investing Thread
« Reply #1645 on: January 08, 2016, 02:37:30 AM »
Regarding MVW, I keep flipping between buying it to augment my VAS for the same reasons you outlined FFA - wanting more diversification than ASX Top 10. The equal weighting across more companies provides better diversification in the AU market.

The reason I haven't gone ahead with it is because I prefer letting my winners run and selling shares that aren't doing well. With the equal weighting, you keep selling the winners to bring it back to the weighting. I'm still deciding whether to go with MVW or buy some individual shares in the ASX 100 that act more like a high conviction fund. I do have shares like Ramsay Healthcare that I am just happy holding and are otherwise such a small part of VAS . The majority of my AU portfolio is VAS so I don't have a large percentage in any one company.

I think if you want better diversification and don't want to hold individual shares, MVW sounds pretty good.

FFA

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Re: Australian Investing Thread
« Reply #1646 on: January 08, 2016, 04:46:25 AM »
thanks for that ynotme.

yeah indices are never perfect. market cap is also criticised for being overweight the overvalued stocks and underweight the undervalued....

my portfolio is in a bit of a mess and I've been working on getting in order in the new year. it's more complex than it needs to be, but that's probably because I like it that way :) here's what i'm settling on -

Oz shares 55%

- VAS = 20-25%
- MVW = 10-15%  (need to switch IOZ)
- Large cap 8 to 12 holdings max = 10-15%  (need to sell some, thinking to keep ASX, CBA, CSL, IAG, RHC, RIO, TLS, WES, WPL)
- Motley fool Dividend Investor (small/mid caps) 5-10%

Int shares 45%

- Currently all in VEU/VTS (55/45% sub-split)
- Fresh funds into VGS/VGE (90/10% sub-split)


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Re: Australian Investing Thread
« Reply #1647 on: January 08, 2016, 08:02:16 AM »
Hey folks, happy new year!

I've been having a read (albeit slow) through this australian thread, has there been any australian specific discussion for the costs of etf/funds such as vanguards offerings. I'm currently leaning towards investing my money in the funds not etf as I can make weekly contributions for the sweet DCA rather than buying etf and likely only quarterly.

Thanks for the great thread so far!

Rob_S

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Re: Australian Investing Thread
« Reply #1648 on: January 10, 2016, 05:59:42 AM »
However, this week I have been researching small cap LICs, thinking about adding one in instead of VSO (ATM I only have $1k each in VSO and MVW courtesy of free first month brokerage with Westpac)

I would love any recommendations, that ETF watch site was actually very helpful :) The LIC fees are putting me off though! Might invest in GC1 (newcomer) if I can get it cheap. Won't be for a couple of months at least though.

I've been thinking about small cap LIC's tonight. I'm currently interested in MIR, WAM and CDM. I'm all in on VHY at the moment and FFA keeps frowning at the strategy. I can see MIR being a real complement with its focus on small/mid caps but then again I like the yield and international diversity of CDM. MIR is 0.7 fee compared to 0.25 on VHY so I'm not sure if the diversity is worth it. WAM and CDM is 1.0 and then has a 20% outperform fee; I like CDMs investment mix though...

I'll probably just stick to VHY :)

FFA

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Re: Australian Investing Thread
« Reply #1649 on: January 10, 2016, 03:34:47 PM »
I'm all in on VHY at the moment and FFA keeps frowning at the strategy.
my frowns are not having any influence though :)

anyway, it's horses for courses and I applaud you for making your own decision, for your own reasons and planning.

just to clarify my thinking is mainly around diversification.

I feel having some international exposure is a key consideration. especially if you have a lifestyle involving regular international travel, plans to live abroad for periods of time, etc. And the range of companies available in global markets is just so much wider than we have here.

Regarding the type of oz exposure, whether VAS or VHY or some small cap in the mix. I feel these are second order considerations. Less impact. As I suggested to cakie, if you want to keep it simple, leaving out small cap is also a valid option. The thing I worry most about is ASX concentration. That's why i'm looking at adding some MVW as a VAS/IOZ substitute. for me it's a slightly more important issue than the small cap, but that's just me. we each need to decide based on our own judgement and plans.