Thanks, Im certainly trying to educate myself more before I do anything, and as part of that education It would be helpful If you answered my orginal question.
From what I understand there is no dividend as such but distributions, So all the dividends collected are paid out in distributions.
Any tips secifically about Etfs Judd?
From what I understand there is no dividend as such but distributions, So all the dividends collected are paid out in distributions.
Any tips secifically about Etfs Judd?
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Hi daunus,
STW is the ASX200 EFT and yes it does pay distributions, here's a link http://www.spdrs.com.au/
You can buy via any retail broker and in my opinion the easiest way to get diversified.
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hi all,
i'm looking into etfs as well at the moment. the one thing i dont understand is that they mention a management fee, would this come out of the distributions, or do you pay it on top, or does it just come out of the value of the fund? i suppose it cant be the latter, otherwise the price of units in the fund woudln't keep track with the index...
also, can distributions be franked?
confused...
i'm looking into etfs as well at the moment. the one thing i dont understand is that they mention a management fee, would this come out of the distributions, or do you pay it on top, or does it just come out of the value of the fund? i suppose it cant be the latter, otherwise the price of units in the fund woudln't keep track with the index...
also, can distributions be franked?
confused...
It'll be a number in the annual report. It comes out of the cash holdings of the fund, they all hold a little bit of cash. No it doesn't keep track of the index exactly, if you compare an etf with the index that it is tracking, the value of the etf slowly under performs the index over a long time.
I'm doing my taxes now, the dividend can be franked, unfranked, foreign income, they can get some franking credits, foreign tax credits, capital gains. It can be a hassle to fill the tax in.
CanOz
Home runs feel good, but base hits pay bills!
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CanOz
Home runs feel good, but base hits pay bills!
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CanOz
Home runs feel good, but base hits pay bills!
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A weekly pattern to watch for those interested in trading Country ETFs....
Confluence with the news is always nice too
This one was obviously a case of buy the bad news at the time, the H&S didn't trigger and the ETF went on to recover well.
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CanOz
Home runs feel good, but base hits pay bills!
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CanOz
Home runs feel good, but base hits pay bills!
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I think ETFs are great and i trade them occasionally to participate in what i suspect at the time are Macro Trends.
There is no reason you cannot add to positions in ETFs. I trade the patterns though, just as a method to enter into a trend. Some are easier to trade than other though and it pays to do some research on the ETF, hows its structured etc...
Bill M
Self Funded Retiree
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Anything from zero to about 6% gross at the moment.
It has been known for many years now that around 70% of all fund managers can't beat the index, so the theory goes as to why try and pick winners, why not just buy the index?
Swings and roundabouts, Listed ETF's usually charge a lower management fees but of course you pay brokerage. For me it comes down to selling at moments notice rather than waiting a few days for it to go through. I would go the listed ETF rather than a managed fund or ETF that is not listed.
Just adding to what others have written here in case it's helpful.
The management fee of ETFs will be deducted from the net asset value (NAV) of the fund on a daily basis - rather then being taken out of distributions. This is why you will see a difference between the index being tracked by the ETF and the performance of the ETF itself. Perhaps the biggest benefit of ETFs however is that generally these management fees are very small (usually less than 0.50% per year).
Generally speaking dividends earned by the underlying shares being held are passed on to investors in their entirety, inclusive of franking credits.
Wysiwyg
Everyone wants money
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Over-rated
I see a lot of raps for ETF's and think they are ideal for set and forget div./dis. investors. Can't see any trading for growth possibility.
I see a lot of raps for ETF's and think they are ideal for set and forget div./dis. investors. Can't see any trading for growth possibility.
I have to respectfully disagree with that. Now that the ETF industry has growth (approx. 100 ETFs on ASX), there are many opportunities for traders to use ETFs more actively to obtain growth. Examples include trading sector ETFs based on views on the market (e.g overweight financials, underweight resources), using currency ETFs to trade views on, for example, the USD/AUD cross, and even things like BEAR which allow investors to profit from or protect against a decline in the market (the fund is designed to go up when the market goes down). ETFs are great from a 'buy and hold' perspective, but can definitely be used tactically as well..
DeepState
Multi-Strategy, Quant and Fundamental
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ETF unit creation/destruction via institutional flow has grown markedly at the expense of futures. They are used for tactical purposes in this context. The advantages from an insto perspective of using ETFs vs futures include: tax, roll risk, tracking risk, market-on-close pricing for the baskets.
For retail investors seeking to trade with leverage, I can see WYSIWG's perspective. For them, futures/CFD remains the main game.
Nearly all the ASX ones seem very illiquid.
Definitely the most misunderstood area of ETFs is liquidity. Because an ETF is open-ended liquidity on screen is only 'the tip of the iceberg' and the real liquidity is bound only by the liquidity of the underlying. This is because the ETF can create new units at any time in relation to ETF demand (and vice versa).
Here is a good blog post on the topic - http://www.betasharesblog.com.au/etf-liquidity-will-it-be-there-when-i-need-it/
