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Tax-free, what to buy?
Valued Contributor
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Tax-free, what to buy?

tax-free.jpg

 

Disclaimers first. I am more than 10 years from retirement hence a high-risk portfolio and this is what I have bought and balanced the values when I added the new R33k this tax year.

 

DBXWD 40%

Global emerged market exposure nice and simple. One could go with the S&P500 ETF, geographies are the same but in DBXWD financials are the largest sector while in the S&P500 IT is the largest. Which will be better? I have no idea nor do I care to try and guess but I have been buying DBXWD for years and am happy with it.

 

CSEW40 40%

The Top40 equal weight ETF. I will always take equal weight over market cap weighting as it reduces the large stocks exposure (in Top40 right now the top 7 stocks are over 50% of the index).

 

PTXTEN 20%

Always some property as a different asset class with decent yields and this one is top ten equal weighted. One could also use the new Satrix Property (STXPRO) which tracks the S&P SA Composite Property Capped Index and caps the stocks at 10%. Alternatively the offshore GLPROP (DBXWD has some 5% in global property).

 

What's in your tax-free account?

 

Simon

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6 Comments
Occasional Contributor

I have two, mine and the wife's. Mine DBXUS(50%) and CSEW40 (50%) excluding this year's R33000, not sure yet what to do with it. I saw an article that it could be possible in future to have some high interest rate savings in it as well. Do you know anything about that?

Valued Contributor

I read that as well, not sure how high they mean when they say 'high interest'? Surely just money market? You can get that with a tax-free call account via a bank or the NFTRCI ETF from ABSA. this is a three month rolling money market?

 

But some thoughts, only really for retirees? And right now you get a tax-free on interest earned (+r20k or interest tax-free) so not sure the appeal, unless they plan to either do away with tax-free on interest or stop increasing the limit so as too make it useless?

Senior Member

My 1st 30k is in DBXUS but the subsequent contribusions I have allocated to Investec both for me and wife. It is a 12month roll over @ 8.85% effective. It suit me better as I am getting closer to retirement and can change it to montly payout on roll over when needed.

Senior Member

I started last year in Feb with DBXWD - but it has done nonething since then. Bought equal amounts of DIVTRX and PTXTEN - still about R30k in cash waiting for an inspirational moment...

Occasional Visitor

Hi Simon ... I have been buying DBXUS (now SYGUS) in the past 3 years. I noticed now that there is a STX500 etf tracking the S&P.  Is this not a better option for future purchases? Your opinion please? 

Valued Contributor

There is also the core Shares CSP500 .. the SYG is slightly different in that it tracks MSCI USA 600, so some extra in the tail .. not sure performance will be much different so issue is costs, divs and type.

 

STX is total return, no divs paid out and is feeder fund, so they just putting in a US SP500 ETF .. should make it cheap but adds small extra layer of risk, but iShares is the feeder.

 

CS is cheap - but that TER goes up in next few months

 

So really it depends do you want divs and what are the TERs ans STX500 likely cheapest