28% growth on my ETF Investments – April Update

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Welcome to my April update of my ETF Investments!

I’ve invested a further R1,300 since my March update and have decided to start pushing as much as possible into this investment. It’s a little tricky as I am actually trying to pay off my home loan but I’ve come up with a good plan for that. This may be a side note but I’ve calculated the exact amount to pay to my home loan each month in order to pay it off by the end of 2020 and any extra money will then go towards my ETF Investments.

EasyEquities investment value at end of April 2019

So as at 29 March 2019 the capital invested was R1,250 and my actual investment value was R1,292.44. And now as at 25 April 2019 my capital invested (actual money that I deposited) was R2,550 and the actual investment value R2,642.06

As usual I have not taken any fees into consideration as I simply take the full amount that I invest (eg R500) and then look how it grows. Even if I paid say R2 in fees, I’m more interested to see how much my R500 grows to as opposed to subtracting fees and complicating the calculations.

Dividends

EE April Dividends

As with the investment fees, I am only really interested in the net result (after tax) dividends as there is no point in tracking tax withheld. My overall dividends since starting my investment is R7.61

Even though the dividends are really small and insignificant right now, they’ll grow over time. My strategy now (and going forward) is to simply reinvest them as soon as I receive them.

The strategy

My current investments are divided percentage wise as follows:

  • 20% Local Equities CoreShares Equally Weighted Top 40
  • 20% Local Equities Ashburton Top 40
  • 10% Local Property – Satrix Property ETF
  • 40% Offshore Equities – Satrix Worldwide
  • 10% Offshore Property – Sygnia Global Property ETF

EasyEquities April EFT Investment portfolio

However, as of my next investment I plan to implement the following new strategy:

  • 20% 30% Local Equities CoreShares Equally Weighted Top 40
  • 20% 10% Local Equities Ashburton Satrix Top 40
  • 10% Local Property – Satrix Property ETF
  • 40% Offshore Equities – Satrix Worldwide
  • 10% Offshore Property – Sygnia Global Property ETF

Moving forward I will possibly reduce the Satrix Top 40 percentage to around 5%. Even though the index is currently performing really well, it’s not a very well diversified index. I am also considering looking at an Ashburton MidCap ETF and will potentially invest in that too.

It’s tricky deciding when one is too diversified or when you are overcomplicating things. Right now I am happy that half of my investments are locally based and the other half international. And then both locally and internationally, 10% is invested in property while the rest is in equity. Seems simple enough so far.

When investing I actually use a calculator to work out how much to invest into each ETF to rebalance the overall investments. Local property has not been performing as well as international property which means I actually invested a little more into the local property ETF. I rebalance each time I invest more money to keep it as close to my strategy as possible.

When deciding on your own strategy is good to start by asking how much (percentage wise) you would like to invest locally and how much internationally. From there you can start looking at actual ETF funds to invest in and decide how much exposure you would want in property or equities. And then of course look at the individual funds fees!

How are they performing?

It’s important to note that this performance only relates to a very short period of 4 months. This is nothing in comparison to the 20+ years that I’m investing for so don’t take things out of context. Also, over time the growth percentage will most likely drop as the current 28% is incredibly high!

The calculation below is simple, firstly compare the blue box of a 5% growth (standard savings type account) to the grey box of my actual investment growth.

I have taken each investment amount (the gross amount) and calculated the days that it was invested for. Then using the Future Value formula which calculates compound growth I have looked at how much I could have earned in my Capitec Bank account versus what I actually earned. So far I’m looking at a 28% growth!

Note: I have made some very minor corrections since the March update as I found a small error. It has barely changed the values though.

EE April Growth

Conclusion

It took me many years to find out and understand about ETFs and many more before I felt confident enough to manage my own investments However, it is really so easy and the low fees make it incredibly viable.

Some fund administrators charge up to 4% for various fees meaning that they would need to outperform my ETF portfolio by more than 3% to make it worth my while investing with them. And truth be told, many of the actively managed funds do not perform well enough to warrant the high fees charged! See my post on why investment fees matter.

Best advice I can give right now is that you should start investing! You can always change your strategy and change your decisions about what you are doing, but start now and you’ll be amazed at what you can accumulate over 10 or even 20 years!

And now you can go see how tides have turned as the May Update shows a dismal drop in performance.

2 comments

  1. Thanks for a great post!

    Interested to see how things are looking in May.

    Seems it has been a rough on for the JSE…

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