Author Topic: Decisions from here (Australia)  (Read 1497 times)

Sydneyinvest

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Decisions from here (Australia)
« on: August 30, 2017, 03:54:59 AM »
Hi,

Was a previous poster but login details are long lost! :)

Looking for a bit of guidance about best options for investment portfolio going forward. I have a bit of a mix atm;

20k in Vanguard High Growth fund at 0.9% mer (putting about 1k) in each month
26k in individual shares of which 12k is in Argo. Smaller amounts in TGG, GMF and RFG (not actively contributing to any of these but add in when they have a share offer etc)

Trying to work out whether for the sake of fees there is a benefit in looking to move to a ETF (while balancing the risk of liquidity) including starting to shift the money I am adding into the managed fund into an ETF (probably VAS).

A bit reluctant to sell out of the managed fund due to capital gains....I remember reading some time ago where someone had done the maths of the tipping point between the etf and the managed fun in terms of fees and contributions, but can't find it anywhere!

Any thoughts?


steveo

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Re: Decisions from here (Australia)
« Reply #1 on: August 30, 2017, 03:45:36 PM »
Personally I doubt that I would sell those amounts. I have some shares in CBA but I won't sell them until I retire and need the money.

marty998

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Re: Decisions from here (Australia)
« Reply #2 on: August 30, 2017, 03:52:17 PM »
What are your goals? What do you want/need the investments for?

How doe this fit in with the rest of your financial situation... do you rent/own? do you want to retire early? How is you Super going?

So much more info needed before good advice can be given :)

Sydneyinvest

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Re: Decisions from here (Australia)
« Reply #3 on: August 31, 2017, 02:44:14 AM »
Hi,

You are right! More info is helpful!

Mid 30s professional
Owner -200k loan 100k in equity
100k in super
40k in cash - in offset

Currently paying off house as fast as we can with intention of building some shares on the side with a goal of throwing a heap more when house is paid off (about 8 years time).

marty998

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Re: Decisions from here (Australia)
« Reply #4 on: August 31, 2017, 04:40:43 AM »
We?

Ok now you need to mention your partner's situation. Because there will be tax strategies available if you have wildly differing incomes.

Sydneyinvest

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Re: Decisions from here (Australia)
« Reply #5 on: August 31, 2017, 05:12:37 AM »
To clarify - partner and I split down the middle! The above numbers are just my bit. Don't have combined finances.

marty998

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Re: Decisions from here (Australia)
« Reply #6 on: August 31, 2017, 05:51:22 AM »
Ahh see... are you both similar in income and spendings/savings nature? How will this work if you have a million bucks and retire and she doesn't?

Sydneyinvest

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Re: Decisions from here (Australia)
« Reply #7 on: August 31, 2017, 01:42:02 PM »
True! We are both in a similar boat!

marty998

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Re: Decisions from here (Australia)
« Reply #8 on: September 03, 2017, 03:30:20 AM »
If you've only got $20k in the Vanguard Managed Fund built up over the past 2 years it won't have generated a meaningful amount of capital gains if you sell.

Market has been pretty ordinary for a very long time.

Take the small hit and buy the ETF.

misterhorsey

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Re: Decisions from here (Australia)
« Reply #9 on: September 03, 2017, 10:03:49 PM »
I was hesitating to sell down a number of direct holdings due to CGT. The plan was to sell direct holdings and then put the proceeds into VGS.

Then I finally did a spreadsheet to calculate how much I would be liable for.

Well, the 50% discount is very generous.  It was far less tax than I thought.

So taking the short term tax hit may be worthwhile to consolidate your investments for the long term.

Sydneyinvest

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Re: Decisions from here (Australia)
« Reply #10 on: September 04, 2017, 03:09:16 PM »
Hi,

Thanks for the advice - was thinking along the same lines! :)

Sydneyinvest

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Re: Decisions from here (Australia)
« Reply #11 on: September 05, 2017, 04:21:29 AM »
Hi again,

Just wondering what ppl think about the difference in liquidity between a etf and the fund itself (this was one of the reasons I went towards the fund initially).

I am conscious of the growing but still small trades in ETFs on the asx....

Thoughts? :)

marty998

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Re: Decisions from here (Australia)
« Reply #12 on: September 05, 2017, 05:21:33 AM »
For the ETF you do not transact with other buyers and sellers.

Vanguard and other providers like State Street and Blackrock, employ investment banks to act as "market makers".

There will always be liquidity, however the market maker takes a small cut, being the spread between the bid and offer price.

When you buy, the market maker delivers your cash to the fund, and the ETF provider creates the units in the underlying fund for you. When you sell, the reverse happens.

That's the gist of it anyway...

Sydneyinvest

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Re: Decisions from here (Australia)
« Reply #13 on: September 05, 2017, 01:34:47 PM »
Thanks! Makes much more sense now!