NAB Equity Builder - too good to be true?

Discussion in 'Sharemarket Investing Platforms, Tools & Services' started by BPhil, 27th Nov, 2017.

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  1. bill_murray

    bill_murray Member

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    Did anybody have any luck applying for the NAB EB through the link provided above?

    I am on the EOI form wait list since September 2021 so not too sure if I should wait it out or try and use the link provided that Chris21 used.

    Looking at getting 30k on a 80% LVR so hoping would fly through as I have a pretty vanilla set up.

    Cheers!
     
  2. Gockie

    Gockie Life is good ☺️ Premium Member

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    I'd use Chris' link.
     
  3. hydroboy

    hydroboy Member

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    I don't think facility size or LVR will make any difference to processing time.

    I haven't heard anyone taking longer than 2 months processed via the shortcut method despite what they may receive via email warning them otherwise.
     
  4. Gockie

    Gockie Life is good ☺️ Premium Member

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    Would you believe I ended up ordering a whole new printer for this? Reason being, the printer/scanner we have at home doesn’t do wifi, you have to put in a USB stick to get your scanned documents and my work computer security policies mean we can’t use USB as a input device on the computer (they are disabled due to possibilities of viruses).
    I’m not going into the office for the foreseeable near future, so it was time to upgrade this piece of home office equipment….

    I ended up ordering this if anybody is interested. Epson Ecotank has many positives. Long lasting ink, don’t need to refill often. Plus it has ADF (note: Single sided only) and double sided printing.

    WorkForce ET-4750 - Quality Refurbished Products - Epson Australia Online
     
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  5. Eggman

    Eggman Member

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    A bit quiet here, are we all in the red? I am :(
     
  6. Invest2021

    Invest2021 Active Member

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    Looks like you can only invest in ETFs and Managed funds using NAB equity builder. Given the discount in NDQ ( -17.5% YTD) - does it make a good buy?
     
  7. hydroboy

    hydroboy Member

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    Makes it a better buy then on January 1!
     
  8. gkp

    gkp Well-Known Member

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    Need some inputs as I couldn't get this info from NAB Equity builder team

    1. I have a split loan set up in 2021 to access equity from my PPOR and used these funds purely to buy VAS, VGS.
    2. The interest payable on this loan is tax deductible as I invested in income producing assets.
    3. Last month, I have been approved for 100k NAB Equity builder loan
    4. Can I use the VAS, VGS units bought using the funds from the equity loan as security and transfer them to NAB for LVR purposes ? Has anyone done this before or in a similar position to me? What are the tax implications to consider and if the above is actually doable ?

    Regards
    gkp
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The loan relates to the purchase of shares so if you are not selling the shares there should be no issue.
     
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  10. gkp

    gkp Well-Known Member

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    Thanks Terry for replying. Yes, no selling of shares involved. I will fill out the form and see how this goes with NAB.
     
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  11. Chris21

    Chris21 Well-Known Member

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    Investment strategy for 250k EB loan.

    Total amount to invest - $250k (NAB EB loan ) (70%) + $100k (PPOR equity) (30%)

    $100k in VAS ( only 2% down YTD)
    $175k in IVV ( 12% down YTD)
    $75k in NDQ (19% down YTD)

    Time horizon- Minimum 10 years. Possibly longer 20 yrs
    Objective - CG. Dont need high yield as we both are in highest MTR
    Investment pattern - invest in 10 chunks of 25k EB loan money over next 6 months

    Appreciate any comments and suggestions on my investment approach?
     
  12. nofriends

    nofriends Well-Known Member

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    given the above, my comment is 250k in VGS irrespective of its YTD percentage.
     
  13. Chris21

    Chris21 Well-Known Member

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    Thank you for comment. Love the diversification but returns higher in IVV

    6838C413-1FBA-4CB9-87AB-E0C804141F88.png
     
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  14. Hockey Monkey

    Hockey Monkey Well-Known Member

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    US returns have been good in the past, particularly the last 10 years or so. Beware chasing past performance, particularly when using leverage which will magnify failed bets. 5 years is just noise.

    Backtest Portfolio Asset Class Allocation

    With NDQ, before fees, the returns have been quite similar over the long term (50 years), however NDQ has had double the volatility and given the higher 0.48% MER would be behind after fees.

    Ben Felix video worth watching regarding investing in tech
     
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  15. Chris21

    Chris21 Well-Known Member

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    Thank you for sharing your prospective.

    What you recommend for 15-20 years time horizon chasing CG?

    Option 1 - VAS (30%) and VGS (70%)
    Option 2 - VAS (20%) and IVV (80%)
    Option 3 - VAS (10%), NDQ (20%) , VGS (70%)
    Option 4 - VAS (20%), VEU (10%) , IVV (70%)
     
  16. Hockey Monkey

    Hockey Monkey Well-Known Member

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    If I was forced to choose from those options, I would choose option 1. The others are overweighting US and/or tech potentially chasing past performance.

    What I actually do is closer to 4 but at global market cap weight, currently something like VAS (20%), VEU (32%), VTS (48%).

    I personally then tilt 20% to factors like size, value and profitability via US listed AVUV/AVDV/AVES which if you buy into the research, have expected higher returns and offer diversification above and beyond the market factor.
     
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  17. Chris21

    Chris21 Well-Known Member

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    Thank you for sharing your views.

    A powerful share market investment strategy

    Above blog also talks about fundamental / dimensional / quality based indexing approach rather than traditional market cap based indexing. It claims "the fundamental index has beaten the Australian market (ASX200) by 2.47% p.a. over the past 10 years and the US market by 2.43% p.a. over the past 20 years" and "S&P/ASX 200 Quality Index has outperformed the ASX200 by 2.94% over the past 10 years."

    So does it make sense to replace VAS with QOZ (available in EB). I know fees are higher but returns are higher as well. In contrast IVV & VTS has performed better than QUS over 10 yr period (unlike claimed by the author), so may be keep it the allocation.

    I will look into AVUV/AVDV/AVES. But historical returns seems be lower than S&P 500.
     
  18. Hockey Monkey

    Hockey Monkey Well-Known Member

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    I’d exercise caution making investment decisions based on a 10 year period. There is very little information about the future in such a short period.

    the past decade just happens to be a period where US equities performed very well. If you look at the decade prior, the US did very poorly with the period often called the lost decade for US equities

    Factor investing isn’t for everyone. You need to be prepared for potentially a decade or more of underperformance before they appear just like the past decade where factors generally did terribly until the past couple of years. If you lose your nerve and sell while down, you would have been better off never owning them. Small cap value is a classic example that some had given up on until recently

    Personally not a fan of Betashares ETFs. Prefer true Fama French 5 factor funds from Dimensional or Avantis. You wouldn’t normally tilt 100% factors either. Market cap weight funds still make a good core of a portfolio with 100% market cap a good default. I personally tilt about 20% towards AVUV/AVDV/AVES. Others go much higher.

    Checkout some of the Ben Felix Common Sense Investing YouTube videos or this paper he wrote if you want to go down the rabbit hole

    Five Factor Investing with ETFs - PWL Capital
     
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  19. Redwing

    Redwing Well-Known Member

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    @Chris21

    What did you wind up going with?

    I see NAB EB recently raised rates to 4% also (was 3.75% for a while)
     
  20. DanW

    DanW Well-Known Member

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    Will be 4.5% soon.
    I'll still use their product though.
    No margin calls beats margin call risk any day, even if the interest rate is higher.
     
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