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A worried Fin24 user seeks advice on whether he should switch his investments to Satrix. He writes:
I'm a pensioner with investments in a few Stanlib European and global equity feeder funds. They treated me well over the last one-and-a-half years but I am getting worried (why - not sure?) and wish to switch say R150 000 to Satrix.
Do I take Satrix 40 or Satrix Dividend Plus? I use the investment to live - from time to time withdrawal. Thanks for this great service Fin24.
NFB Financial Services Group director and CFP® professional Grant Magid responds:
Taking into account the limited information we have, it would be remiss of us to assume that this is your only investment in your portfolio.
While global equities have generally performed well over the past couple of years, the strategy you have employed varies quite substantially from someone of a similar risk profile, which we have assumed to be cautious to moderate.
Over the longer term investing in equities has typically provided investors with higher annualised returns, but with significantly higher levels of risk and volatility.
Couple this volatility and the added risk of currency fluctuations, and you have a very risky portfolio for someone looking to draw an income from the portfolio. Much like you we have concerns over the current valuations of offshore equities, albeit we are more comfortable with European stocks and those in the US.
You mention you would like to switch R150 000 to either the Satrix 40 or Satrix Dividend Plus funds.
Without full knowledge of the representation this amount makes up in your portfolio and your liquidity requirements, it would be difficult to suggest which would be the more appropriate fund. Our concern is the local equity market is currently trading at or near record levels and the common view in the market is future returns are likely to be muted.
One general recommendation would possibly be to reduce the risk in the portfolio and switch to a more cautious, stable type of investment approach.
A unit trust investment in the cautious to moderate space may be better aligned to your assumed risk profile. There are a number of funds you can chose from, including Stanlib funds should you wish to remain with your current investment house.
This cannot be construed as formal financial advice, and it would be in your interests to contact an independent financial adviser who will be able to provide professional guidance with regards to your entire financial plan.
This could include personal tax efficiency, income structuring, discretionary investments, retirement investments, estate duty, life and disability insurance, and medical aid assistance.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
I'm a pensioner with investments in a few Stanlib European and global equity feeder funds. They treated me well over the last one-and-a-half years but I am getting worried (why - not sure?) and wish to switch say R150 000 to Satrix.
Do I take Satrix 40 or Satrix Dividend Plus? I use the investment to live - from time to time withdrawal. Thanks for this great service Fin24.
NFB Financial Services Group director and CFP® professional Grant Magid responds:
Taking into account the limited information we have, it would be remiss of us to assume that this is your only investment in your portfolio.
While global equities have generally performed well over the past couple of years, the strategy you have employed varies quite substantially from someone of a similar risk profile, which we have assumed to be cautious to moderate.
Over the longer term investing in equities has typically provided investors with higher annualised returns, but with significantly higher levels of risk and volatility.
Couple this volatility and the added risk of currency fluctuations, and you have a very risky portfolio for someone looking to draw an income from the portfolio. Much like you we have concerns over the current valuations of offshore equities, albeit we are more comfortable with European stocks and those in the US.
You mention you would like to switch R150 000 to either the Satrix 40 or Satrix Dividend Plus funds.
Without full knowledge of the representation this amount makes up in your portfolio and your liquidity requirements, it would be difficult to suggest which would be the more appropriate fund. Our concern is the local equity market is currently trading at or near record levels and the common view in the market is future returns are likely to be muted.
One general recommendation would possibly be to reduce the risk in the portfolio and switch to a more cautious, stable type of investment approach.
A unit trust investment in the cautious to moderate space may be better aligned to your assumed risk profile. There are a number of funds you can chose from, including Stanlib funds should you wish to remain with your current investment house.
This cannot be construed as formal financial advice, and it would be in your interests to contact an independent financial adviser who will be able to provide professional guidance with regards to your entire financial plan.
This could include personal tax efficiency, income structuring, discretionary investments, retirement investments, estate duty, life and disability insurance, and medical aid assistance.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
