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  1. #21
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  2. #22
    Guru justakiwi's Avatar
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    Quote Originally Posted by huxley View Post
    Minimum investment $10,000 - not quite doable yet

    I did look at RaboDirect's new Notice Saver - currently 3% (but variable) locked in for 60 days. But I decided there's no real advantage to the Premium Saver I already have with them. If the 3% was fixed it would be a different story.

    Sadly, nobody seems to do Term Deposits with compounding interest anymore. They used to be a good option.

  3. #23
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    Quote Originally Posted by justakiwi View Post
    Minimum investment $10,000 - not quite doable yet

    I did look at RaboDirect's new Notice Saver - currently 3% (but variable) locked in for 60 days. But I decided there's no real advantage to the Premium Saver I already have with them. If the 3% was fixed it would be a different story.

    Sadly, nobody seems to do Term Deposits with compounding interest anymore. They used to be a good option.
    You may want to double check that I'm pretty sure you can usually compound quarterly - good luck!

  4. #24
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    Quote Originally Posted by huxley View Post
    You may want to double check that I'm pretty sure you can usually compound quarterly - good luck!
    or just get it paid back into a cash account that accumulates until enough for another instance of a term deposit, all the time varying the duration to suit the portfolio.


    I think Rabo is perfect for managing smaller portfolios and yet also allowing appropriate asset allocation to be achieved.

  5. #25
    Guru justakiwi's Avatar
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    Quote Originally Posted by peat View Post
    or just get it paid back into a cash account that accumulates until enough for another instance of a term deposit, all the time varying the duration to suit the portfolio.


    I think Rabo is perfect for managing smaller portfolios and yet also allowing appropriate asset allocation to be achieved.
    I have been looking again at Rabo's managed funds and thinking these might be a good option for a small starting investment but I am overwhelmed by the choices and have no clue which fund would be the best, or even a good, option. Some of the providers I've never heard of such as Elevation Capital, Devon Funds, Harbour Asset Management. How on earth is one supposed to learn how to judge these? Or am I overthinking it - should I trust that RaboDirect has a good reputation and "assume" that they would only choose quality providers and therefore funds?

    At this point I am prepared to invest another $1000 somewhere - the question is, a Smartshares ETF such as OZY or a Rabo (provider X) managed fund.

    How do people ever figure all this stuff out?

  6. #26
    Guru justakiwi's Avatar
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    OK, I stumbled across a documentary video by a guy called Mark Hebner, titled "Index Funds: The 12 step recovery program for active investors." I haven't yet watched it all, but so far this guy makes perfect sense and I like what he has to say. Based on what I've seen/read so far, I think ETF is the right option for me as a small investor, looking for long term growth and a bit more stability/safety than active investing. At least for now.

    So I'm looking again at Smartshares. I've just been looking at their website to see whether it's better/cheaper to invest directly via them or via ASB Securities and from what I can see it seems that buying directly from them is definitely cheaper. I read this:

    " When Unitholders first subscribe for Units they will pay an application fee
    to the Manager which will be deducted from their subscription amount. For subscription amounts of less than $20,000 this will be a flat fee of $30, and for subscriptions equal to or greater than this amount the subscription fee will be 0.2% of the subscription amount. This fee is not payable for subsequent Cash Applications, subscriptions under the Regular Savings Plan, or the Distribution Reinvestment Plan."

    So if I am reading this correctly, I would pay the same $30 fee to purchase as I would if I did it through ASB, but if I then wish to make additional cash purchases or regular monthly purchases, I won't be charged anything - as opposed to making additional purchases through ASB which would cost be another $30 each time.

    Correct? Are there any disadvantages of buying directly through Smartshares that anybody can see that I'm missing?

    Oh, and how do I know what the price of a unit is if I buy through Smartshares?
    Last edited by justakiwi; 20-08-2016 at 05:10 PM.

  7. #27
    Reincarnated Panthera Snow Leopard's Avatar
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    I believe that there is an element of confusion in your thinking here.

    When you buy Smartshares through ASBSec you are always buying existing units up for sale on the NZX and thus you always pay their minimum $30 brokerage.

    When you buy Smartshares directly from SmartsharesCo you are buying new units created for you whether this is your initial entry (when you pay the SmartsharesCo $30 fee) or subsequent top-ups (with no fees).

    Come the time that you want to sell your Smartshares, if SmartsharesCo do not offer a buyback facility then you will need to sell them on the NZX via ASBSec (or another broker).

    Are you intending to make regular monthly payments?

    Best Wishes
    Paper Tiger
    om mani peme hum

  8. #28
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    it makes sense to skip out any middleman who isn't adding value (such as providing advice...)
    the price of the units is on their website , they simply accept dollar value applications.
    . The only thing I noted that was out of the ordinary was that they 'work' the shares owned by the funds. By that I mean they reserve the right to lend them out to earn further income and this is all completely kosher but not explicitly outlined. I don't use Smartshares myself but have read up on them and communicated with them in 2010 regarding this issue, which was clarified to me as so:

    In relation to securities lending the amendments to theTrust Deeds contemplate two types of permissible lending:1. Lending through a central clearing house; and
    2. Lending to NZX marketparticipants bilaterally


    Its not a big deal, and they did clarify that they wouldn't be taking on any option writing strategy where risk is retained. So in effect its adds to the yield or reduces the management fees whichever way you want to see it

    So using Smartshares still requires you to make a choice though ! I see 23 of them now.
    Smart Shares Listings.JPG

    Obviously you will want to choose a diverse option as opposed to say 'Australian Resources' or 'Emerging Markets', but that still leaves heaps to pick from. Do you want to choose NZ, or Aussie, or US? And if so the top 10 or 20 or 50. It is a bit bewildering. Theoretically you should choose the 'Total World' for the most diversification but I find my self irrationally disliking that option.
    Have fun selecting.




  9. #29
    Guru justakiwi's Avatar
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    Quote Originally Posted by Paper Tiger View Post
    I believe that there is an element of confusion in your thinking here.

    When you buy Smartshares through ASBSec you are always buying existing units up for sale on the NZX and thus you always pay their minimum $30 brokerage.

    When you buy Smartshares directly from SmartsharesCo you are buying new units created for you whether this is your initial entry (when you pay the SmartsharesCo $30 fee) or subsequent top-ups (with no fees).

    Come the time that you want to sell your Smartshares, if SmartsharesCo do not offer a buyback facility then you will need to sell them on the NZX via ASBSec (or another broker).

    Are you intending to make regular monthly payments?

    Best Wishes
    Paper Tiger
    Thanks for clarifying that for me. Re the regular monthly payments, yes that is what I'm currently thinking. Minimum initial order is $500 - which means $530 including their fee. I think I will start with that, register for DRIP straight away, then set up a regular monthly payment of $50 (which is the minimum). Right now, that is doable for me. The good thing is - if my situation changed for the worse - you can pull out of the regular investment plan or reduce the frequency - which is good to know. It means I can be in control of what I'm investing on a regular basis without being tied to anything. I like that.
    Last edited by justakiwi; 20-08-2016 at 07:16 PM.

  10. #30
    Guru justakiwi's Avatar
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    Quote Originally Posted by peat View Post
    it makes sense to skip out any middleman who isn't adding value (such as providing advice...)
    the price of the units is on their website , they simply accept dollar value applications.
    . The only thing I noted that was out of the ordinary was that they 'work' the shares owned by the funds. By that I mean they reserve the right to lend them out to earn further income and this is all completely kosher but not explicitly outlined. I don't use Smartshares myself but have read up on them and communicated with them in 2010 regarding this issue, which was clarified to me as so:

    In relation to securities lending the amendments to theTrust Deeds contemplate two types of permissible lending:1. Lending through a central clearing house; and
    2. Lending to NZX marketparticipants bilaterally


    Its not a big deal, and they did clarify that they wouldn't be taking on any option writing strategy where risk is retained. So in effect its adds to the yield or reduces the management fees whichever way you want to see it


    I think I understand that but will read it at least four more times to make sure

    So using Smartshares still requires you to make a choice though ! I see 23 of them now.
    Smart Shares Listings.JPG

    Obviously you will want to choose a diverse option as opposed to say 'Australian Resources' or 'Emerging Markets', but that still leaves heaps to pick from. Do you want to choose NZ, or Aussie, or US? And if so the top 10 or 20 or 50. It is a bit bewildering. Theoretically you should choose the 'Total World' for the most diversification but I find my self irrationally disliking that option.
    Have fun selecting.


    Exactly! This is my present dilemma. I'm with you - I keep thinking "Total World" makes sense, but for some reason it's scaring me. Somebody (was it you?) suggested earlier that because I have Kingfish covering a little bit of the NZ side of things, I'd be best to look at OZY or US500(USF) which invests directly in the Vanguard S&P 500 ETF (VOO). I feel that that one might be a good choice in terms of diversification, but I'm only going on a gut feeling which could be dangerous as a beginner. Having said that, this one isn't cheap (for me) so I then have to decide whether I can accumulate enough units over time, for it to be a worthwhile option.

    Open to suggestions/opinions as usual
    Last edited by justakiwi; 20-08-2016 at 07:31 PM.

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