ETF Exchange Traded Funds (ETFs) 2020

But the dividend is not being maintained, the yeild is not even being maintained despite falling share price. It is easy to get 10% yeild the more the price falls the better the yeild, and vice versa. Earning per share are negative. Invest in buisiness's with growing earnings.

 

YMAX
Thanks to SatayKing, mtat, dunno and Fargo for your wise words, charts and forthright comments about YMAX.

The dividends produced by YMAX are greater than its loss in capital and I was favouring the certainty of dividends over an uncertain potential gain in capital with VAS/VGS. As a retiree i am willing to forgo some capital gain in exchange for high dividends but I can see that with YMAX the differential between the two is too high. Like many here I feel that the LICs get the balance about right and I am particularly pleased by how MIR is travelling at present.

 

I have a question for those who invest in ETF for passive income. My understanding is that whenever the ETF internally disposes an asset (e.g. due to re-balancing), it will distribute the capital gain to the investor and triggers CGT even the investor hasn't sold any ETF shares. Does this make it a less attractive investment? Even if the portfolio turnover rate is 1.5% you still needs to pay quite a bit of additional tax.

 

Not really. Someone else may be able to answer this better but here’s my take on it...

You don’t pay 1.5% additional tax. You would pay tax on any capital gains realised from those sales which there may be very little or even none.

Companies are often sold if they fall out of the index which often means they’ve performed poorly and are falling out of the top 200 for example, and are getting replaced with new ones.

Same deal with owning assets inside a LIC or other managed investment.

For this to be completely avoided you’d need to run an entire index portfolio yourself and then also never sell to update the portfolio and avoid CGT.

Sounds like a lot of work

 

Be nice if the dollar could rise a bit more in time for me to buy.

 

Some people will all ways invent excuses. You can sell and avoid CGT,or keep it at negligible levels. There is a tax free threshold, you can nominate which tranche you sell. You can off set gains by selling some duds at the same time and offset against interest and other costs. Use SMSF could be low or tax free. Not much work to look at whats overweight whats doing poorly and sell, takes a few minutes can do it while waiting for the kettle to boil.

 

@dunno was the outperformance due to VGS or VAS or equally both?

 

Might be a silly question, but with the banks loosing ground will the weighting in an ETF like VAS be reduce? For example the top ten share holdings in VAS are the four big banks, and the big companies WES etc. However the bottom 100 companies make up 3% or whatever it is. Is it likely to reduce the concentration risk?

 

I don't consider it a silly question.*

This link may help you. My only gripe with it is it doesn't split Financials into Banks and Other Financials.

Investment Products

* Should always ask the question "What don't I know?" If the answer is anything other than "A heck of a lot," you're lying.

EDIT: If you feel so inclined (I'm not by the way) here is a link to the ASX300 from which you can extract some data (CSV download available.)

ASX 300 List - Data for ASX Top 300 Companies

There are some slight discrepancies between both too (Vanguard holdings are also able to be downloaded). For example VAS classifies Macquarie Group as "Diversified Capital Markets" whereas the ASX300 list places it in the "Financials" sector.

 

Today I baptised to ETFs (VAS @ 75.40 via SW) - I may not get the same price as March lows but as the experts say who cares for long run ..a journey need to be started somewhere...

Big thanks to all the users for contributing and credit goes to all and to name few @SatayKing @Nodrog @Snowball @The Falcon @Redwing @dunno

VAS, VGS, and 1 LIC - simple long term structure for someone like me and good luck to all the experts who might beat the market by tweeking portfolios

 

Is anyone reconsidering their hedging strategy with international ETFs?

My preference was always for un-hedged. Partly because I saw hedging as an additional cost, and some additional tax drag. But mostly because part of the purpose for my international shares was to provide a hedge against the Australian economy and currency - I want to maintain some international purchasing power for travel and imported goods.

I added substantially to the portfolio in March as things were looking grim, mostly 50/50 in int/domestic ETFs, plus a few more speculative purchases. The international, I mostly bought as VGAD - because I didn't believe the currency would say that beaten up forever. That's proven right thus far, with about a 25% gain vs holding VGS based on the times I bought my parcels. However, with the dollar having recovered a bit, I've just unwound this and sold the VGAD for VGS. I'll take a bit of a CGT hit for doing so, but its in my SMSF, so its not too nasty.

Anyone else re-considering their hedging of international shares?

 

www.credit-suisse.com › docsPDF Credit Suisse Global 2012 Investment Returns Yearbook

Before doing anything investing related I strongly recommend people should read all of these Elroy Dimson reports they can get their hands on. They are brilliant and have some of the best long term data and assessments around. Each year is a different theme. This one goes into currency hedging.

 

That’s what I did. My long term asset allocation is to only hold unhedged Global. However when the Aussie Dollar is well below it’s longer term average there’s a value opportunity. There’s no intention to hold VGAD long term though, if purchased in such a circumstance it’s then sold and proceeds used to add to long term holding VGS when the dollar recovers.

This thread might be a better place to discuss such things:

International Shares - Hedged vs Unhedged? [International]

 

I stick to 50/50 currency allocation, so I have VGAD as well as VGS, and buy accordingly to my target allocation. This way I don't have to be timing the currency and will buy the cheaper option everytime I have funds to inject. Simple investing.

 

Vanguard All-World ex-US Shares Index ETF VEU

Distribution per unit US$0.3416

 

The link doesn't work for me, no matter what web browser I use.

Do you have a copy of the PDF you could share? I'd be interested in reading it.

 

Try this link. Scroll down to the Archive section for reports from 2012-2014.

 

It's bad form to reply to yourself (my excuse is that I only remembered after the five minute edit window expired) but I'll note that you can go back to 2009 if you click on the "Load more" button at the bottom of the page.

 

Many thanks, that worked.

 

Exchange traded funds (ETFs) are growing rapidly in popularity among Australian investors. The ~240 ETFs on the ASX hold nearly $70 billion in assets. Of course, not all funds are created the same. Like stocks, some of them have been utter duds and delivered poor returns as they track niche parts of the market or due to flawed and complicated methodologies. As the level of adoption and choice increases, so too does the need for high-quality information that can help investors make better choices with ETFs. That’s why we’ve brought together investment advisers James Whalan of VFS Group and Charlie Viola of Pitcher Partners. They discuss how to navigate the world of ETFs, what to look for in individual funds and how they use them in portfolios. They also nominate the one ETF they would hold if they had only a single choice of fund.