ETF Exchange Traded Funds (ETFs) 2020

ah right. makes sense. thanks for clarifying!

 

For the uninitiated, whats equity pull money?

 

Hi @UncleDrew sorry to rehash old ground but I’m still interested in this. Like you I’m open to being turned around but I didn’t think this was true for an ETF. My understanding is that the market maker keeps the share price at NTA (ignoring spreads). Franking credits don’t have a physical value to the unit trust. It’s only value is in the hands of Investors or more specifically Australian tax residents. For the market maker to price in franking credits they would effectively have to know the tax profile of all investors. My experience in the unlisted space is that franking credits where never included in the valuation of the business - both foreign and domestic investors.
How the market prices them for an ASX company or LIC I’m not sure. Too many market invents on the day to work it out!

 

@Ynot keep in mind though the lender will still require headroom in the loan after pulling equity out. Using redwings example above if the lender needed 20% min LVR on a 100k loan and you wanted to pull 20k out your 'mortgage' would need to be $60k and so on.

 

We compare LICs vs ETFs, which is best?

has anyone seen/read this article - comparison is only for 5 years. Not sure if I should put this in LIC thread as both seems appropriate!

 

Vaccine news a shot in the arm for the market

 

Passive attack

The story of a quiet revolution in asset management begins with Jack Bogle. Actually, it starts in 1974 when Paul Samuelson, an economist and Nobel prizewinner, published an article in the Journal of Portfolio Management arguing that the bulk of mutual-fund managers should go out of business. Most failed to beat the market average and those that did could not be relied upon to repeat the trick. An archetype was required. Someone should set up a low-cost, low-churn fund that would do nothing more than hold the constituents of the s&p 500. Mr Bogle decided that Vanguard, the mutual-fund group he founded in 1975, should take up the challenge. His index fund was denounced on Wall Street as unAmerican. It received only a trickle of inflows. But by the time of Bogle’s death last year, Vanguard was one of the world’s biggest asset managers, largely on the strength of its index funds.

An investor can now buy exposure to the market return (beta, as it is known) for a few basis points. Indeed, “beta is becoming free” is an article of faith among industry bigwigs. Technology allows access to stockmarkets at vanishingly low cost. BlackRock and State Street Global Advisors, the other firms of a leading triumvirate, owe their growing heft to index (or “passive”) investing. These three are the industry’s big winners; everyone else is “fighting for scraps”, as the boss of a midsized asset manager puts it

 

New ETF from Betashares coming. Will be interested in the composition of underlying ETFs. MER 0.19%

Diversified All Growth ETF | BetaShares

 

From reading their website: DHHF is currently trading on the ASX as the BetaShares Diversified High Growth ETF. Following close of trading on 15 December 2020, the fund’s strategy will change to 100% growth and will be known as the BetaShares Diversified All Growth ETF.

Keeping the whole FIRE crowd happy no doubt. or at least trying to stop everyone from going VDHG.

 

DHHF will remove the cash, bond and property components and move to 37:63 split AU:international equities with no ethical slant to keep MER down. I presume the AU portion of the fund will consist entirely of units in A200, but am wondering what the makeup of the international portion will be.

The conservative, balanced and growth diversified ETFs (DZZF, DBBF and DGGF) are changing quite significantly too. Property, bonds and cash are similarly out, mix of international equities is increased relative to local and the investment slant is moving to 'ethical' -- along with this, MER increase from 0.26% to 0.39%.

The change for DZZF, from a 'conservative income' fund to a 'high growth ethical' fund raises questions in my mind about the control one gives to the companies offering your chosen investment vehicle. The option now, if you aren't happy with changes above, is to sell your units and move on, right? Is my thinking correct?

It also makes me wary of buying the 'new' DHHF. If BetaShares' goal is to capture new business, why wouldn't they toy with the fund's AA again down the track instead of creating a new product? Sort of flies in the face of FIRE principles, i.e. picking an investment strategy and sticking to it, through thick and thin. Maybe FUM were so small they didn't care, or maybe it is truly a minority who did care.

 

Had another look and found information regarding DHHF's new composition.

37%
ASX:A200 - BetaShares Australia 200 ETF (Solactive Australia 200 Index)

63%
NYSE:VTI - Vanguard Total Stock Market ETF (CRSP US Total Market Index)
NYSE:SPDW - SPDR Portfolio Developed World ex-US ETF (S&P Developed Ex-U.S. BMI Index)
NYSE:SPEM - SPDR Portfolio Emerging Markets ETF (S&P Emerging BMI Index)

The weighting of international ETFs making up the 63% will be reviewed quarterly and based on the free floating market cap of the constituents of the respective indices.

If I understand the screenshot below correctly, that just means the value of all companies in these three ETFs is summed and if companies under the VTI ETF make up 50% of that total value, then VTI will make up 50% of DHHF's international component, or 31.5% (half of 63%).

 

A great writeup on DHHF and other VDHG alternatives - Passive Investing Australia

 

Hyperion Australian Growth Companies Fund
VS
Bennelong Australian Equities Fund
VS
Vanguard Australian Shares Index ETF
VS
BetaShares Australia 200 ETF

Page 8 shows very interesting results

Please feel free to give your opinion

 

Thank you @Never giveup . That’s a nice comparison. As I mentioned to you I have now added bennelong aus equities fund as part of my aus active holdings. I was concerned about having to much of my active in just Hyperion, even though they have been smashing it.
Looking at the comparison I think there’s is enough difference in the approach between Hyperion and bennelong yet still over 10 years the performance has been similar. Hyperion has had a stellar run in the last few years though.

 

Page 8 is a simulation assuming 6% return and showing a fee comparison. The million dollar question is on page 2 and whether Bennelong and Hyperion can continue to double the returns of VAS over the next 10 years, although that is no doubt skewed by the significant out performance in the past 12 months.

 

Knowing how much will hit the account with the WHF dividend next Friday week, I decided to:

1. do a quick assessment of my cash requirements; and
2. remove any future angst on where to place those funds.

Achieved the above by adding some more VGS.

Back to not caring very much until later this month when it's ETF time.

 

Why can’t you wait until the dividend hits the bank account? Too eager to invest

 

No but why bother waiting when it can be done now?

Always bearing in mind what the cash needs may be during the interim. I don't anticipate there will be an immediate need which can be covered from other sources if necessary.

 

Hi all

I'm fairly new to share investing, having just started this year. My share portfolio outside of super is solely AU shares (largely VAS) and I've been trying to even that out via more international exposure within super. It's now getting to the point where that is not enough and I'd like to get some international exposure outside of super. I like the idea of index funds and I'm inclined to keep it simple and just add VGS but I feel that the FANG stocks are very expensive and I'm not sure I want too much exposure to them. Anyone got any suggestions? E.g. equal weight index (that way I still get some exposure to FANG) or mid and small caps (but then no FANG at all)?

Thanks