ETF Vanguard Australian Shares Index Fund and VAS

This is what Vanguard said when I asked:

"The reason most likely is due to the way the Retail Fund is structured compared to the Wholesale Fund. The Retail Fund is a 'fund to fund' product, since it actually invests into the Wholesale Fund. This can result in the need to pay off capital gain and deliver to the investor in the form of a distribution as opposed to retaining it is growth.

Anther possibility, is that the Retail Fund pays half-yearly distributions, whereas the Wholesale Fund pays quarterly distributions. This means that if one of the quarterly distributions was quite large or small, it could skew the annualised data.

The other possibility that I have discussed with my team, is that because dividends are re-invested until it is time to pay a distribution, the capital gains liability generated will be different between the Retail and Wholesale because the Retail Fund holds onto the funds for longer since it pays half-yearly distributions.

There was a higher level of capital gains paid to investors within the retail fund distribution relative to the wholesale fund. This has lead to a higher income return for the retail funds."

 

My partner is in the wholesale funds and hasnt looked back, come to think of it i dont think she even logs on to check statements etc etc. Set and well and truly forget. Bpay every month done and dusted! Behavioural finance eat your heart out! More time to actually enjoy life and live... distributions reinvested see how it goes in 25 years time.

 

Pippen: does your partner do Australian wholesale fund or the world ? Thanks.

 

Both australia and international share fund wholesale! 100k buy in, can even get in a fund with 5k as long as total balance is 100k. So for example can even do 80k cash reserve fund and 10k australia fund and 10k international fund and replenish cash buffer from work and then divert cash reserve funds into both aust and international fund over time.

Or do the ever reliable fixed interest fund, Australia fund and international fund. Done!

 

I do that with my SMSF but buy the ETF version instead. Have been very pleased with compounding effects of re-investing dividends on portfolio size over past 6 years I have been running my SMSF.

I plan to follow same strategy for investments outside super (tick the DRP).

Cheers,
Oracle.

 

I think I'll stick with the plan to buy EFT or Lics every month. Would you buy, say e.g. $5K VAS and $5K VGS every month (brokage fee is $40 with Commsec) or $10K VAS one month and VGS another month (fee $20 only)? Tx

 

$10k VAS one month and $10k VGS following month

Always look to reduce your costs. Be it brokerage or expense ratio.


Cheers
Oracle

 

I will have a look. Still reading at the moment and have many noob questions. with Self Wealth, when you sell can you have the proceed transferred directly to bank account? I am using commsec atm as all other accounts are with commbank.

For regular investment, what is the minimum ideal buy? e.g. is it better to buy 1k every month, or 2k every 2 months? etc

 

Use this website or numerous others:

Dollar Cost Averaging Calculator - Completing Sydney

 

It would depend on your brokerage fees, just put you buy orders in, less than 2 or 3k may give you high commissions but a low price can make up for it, If your order hasn't filled after a month or 2 increase your amount and increase your price or just put an additional order at a higher price. You could try putting orders in at 3 month lows ,or even 6 or 12 month lows in a down trend. A low ball may trigger @ ex dividend,

 

@Fargo: if you put in order for VAS and VGS now, what are the prices that you'd put in for a month order? Tx.

 

Must resist, but The Force is to strong .....................
Brought my first VAS today.
Phew what a relief.
Thanks to all that helped me to get to this decision.

 

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At this rate @Simon Hampel is going to have to add a a bogglehead subsection to the forum.

 

I also bought some VAS over the last couple of years. The dividend is and passive aspect is very appealing.

Though the tax time I am always confused. How do I adjust the cost base (per annual tax statement they send out) and what does it mean when I sell it?

Anyone do their own tax return with ETF investments?

 

They send out a tax statement and you just enter each respective part into the managed fund distribution section in your online MyGov lodgement...at least that's what I do. Hope I'm not wrong.

 

The easiest way to deal with it is to never sell, that way this adjusted cost base thing will never be an issue.

That's what i thought the idea was anyway - to accumulate enough, and it will throw off sufficient income that you don't have to worry about selling the equity.

Now as for VGS...

 

So the cost base is just on a spreadsheet for me until I sell?? The plan is to hold as passive income.

So I only need to worry about the Div and frank numbers?