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Online Share Trading

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Exposure to Property

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Contributor
A couple of questions about PLS and PUTs... Barry, you appear to be the resident expert on this? These stocks offer high dividend yields but are they tax-free like ordinary share dividens or are they seen as interest income instead? Also deciding between the property ETF (which has much lower div yields - why?) and individual stocks like APB, GRT, etc. In terms of security as a long term investment (and source of income) as well as liquidity, which would you recommend?
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Valued Contributor
no, they pay interest not dividends. So there is a potential tax implication.
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Super Contributor
Simon is correct.In the case of Property Unit Trusts,u will see that they do not state a dividend yield only an earnings yield....The reason is that the whole earnings yield is usually paid out fully to the investor..... In the case of loan stock both earnings and dividend yield is mentioned,how ever the div yield is mostly equal to the earnings yield....One buys PUTS for a growing source of income and not for fast capital growth....Property Loan Stock which is less regulated carries a slightly higher risk and has higher capital growth as well as good income....At the moment i buy only loan stock.
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Contributor
So with PLS, distributions are paid as interest as well as dividends (about 50/50) whilst PUTS pay their distributions entirely in interest? I suppose the ETF would reduce the specific risk of an unregulated PLS going under as it has exposure to 20-or-so different PLSs? Many thanks for the help guys!
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Super Contributor
The ETF PTXSPY has shown since 9/7/2008 23% growth and it hink pays quarterly(Simon would know)....There are about 24 PUT abnd PLS in there,Growthpoint being the largest making up 26% of the total....i always try to out perform the ETF ,which i've managed to do so far....I hold Apexhi(A,B,C) and Redefine.
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Super Contributor
The div portion is usually much less that the interest.
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Not applicable
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Valued Contributor
yes, quarterly. An barry is right, if you not beating the ETF, stop trying and just buy the etf.
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Super Contributor
Guys, whats your thoughts on Emira (EMI)?
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Super Contributor
A very well run PUT,it has increased 26% since the 9/7/2008,which is exceptional for a PUT....i held it earlier this year,but sold ex-div.How ever am contemplating buying back when funds become available....Great news both for PUTs and PLS is that the banks are so strict in granting new loans for commercial buildings ,that existing ones will get all the tenants out there....all space is likely to be taken up in the next couple of years....This will lead to upward pressure on rents.(also see Moneweb )
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Super Contributor
Thanks Barry, i also believe its very well run, i bought some shares in mid-2005 and still hold them, am thinking of buying more with dividends from PPC and my additional funds i accumulate monthly, i am very happy with the growth, distributions and your comment about the banks not lending and vacancies will be seen dropping, i am very happy to add to the position. thanks for your input!
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Super Contributor
Stij, I posted a question last week about Liberty International paying a dividend or interest. Barry and John assure me that LBT pays out a dividend. Therefore the distributions are tax free.
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Super Contributor
When we going for that beer?
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