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Advice on smartshares
Hi, Longtime reader 2nd time poster on Sharetrader!
I have been quietly investing in shares for a couple of years and slowly building a portfolio containing AIR,THL,ARV,EVO.PGW,HBL and BLT (Hmm not quite sure about that one!) also have a very small parcel of ATL, hoping they can forge the same sort of success that THL has had over the past couple of years. I plan to continue with the (full support of a very loving and understanding wife) to grow these holdings and more in the future. (any thoughts on what I hold would be gladly appreciated too
We also have a small but growing each month FNZ smartshares fund, and have thought about adding more of these,possibly a US fund and maybe an Aussie one. We feel they are a good saving discipline and they complement our super schemes.
The one thing I do wonder about though is the liquidity of these smartshares. What happens in 20 years time when I want to sell some of these ?
Will there actually be a demand for these shares or will everyone be accumulating them monthly like I do at the moment without having to purchase shares straight from the market?
Would appreciate any thoughts on this and hope this is the 2nd of many posts from me!
Cheers
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Originally Posted by Benny1
Hi, Longtime reader 2nd time poster on Sharetrader!
I have been quietly investing in shares for a couple of years and slowly building a portfolio containing AIR,THL,ARV,EVO.PGW,HBL and BLT (Hmm not quite sure about that one!) also have a very small parcel of ATL, hoping they can forge the same sort of success that THL has had over the past couple of years. I plan to continue with the (full support of a very loving and understanding wife) to grow these holdings and more in the future. (any thoughts on what I hold would be gladly appreciated too
We also have a small but growing each month FNZ smartshares fund, and have thought about adding more of these,possibly a US fund and maybe an Aussie one. We feel they are a good saving discipline and thThey complement our super schemes.
The one thing I do wonder about though is the liquidity of these smartshares. What happens in 20 years time when I want to sell some of these ?
Will there actually be a demand for these shares or will everyone be accumulating them monthly like I do at the moment without having to purchase shares straight from the market?
Would appreciate any thoughts on this and hope this is the 2nd of many posts from me!
Cheers
The NZX which own Smartshares also provide a market maker... have a look at depth on broking sites. So there is no problem exiting these investments. I think (not 100% sure) that if you have a very large parcel (over 500,000) then they can actually redeem a basket of these units so you would get "real market value".
I have some smartshares too, actually FNZ is my Kiwisaver so that keeps the regular savings ticking along nicely.
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Member
Originally Posted by Benny1
Hi, Longtime reader 2nd time poster on Sharetrader!
The one thing I do wonder about though is the liquidity of these smartshares. What happens in 20 years time when I want to sell some of these ?
Will there actually be a demand for these shares or will everyone be accumulating them monthly like I do at the moment without having to purchase shares straight from the market?
Would appreciate any thoughts on this and hope this is the 2nd of many posts from me!
Cheers
While some Smartshares investors including myself are currently making monthly contributions there will come a time when these investors will need/want to sell their shares on the market. If you are using ANZ Securities you can create a watchlist which enables you to see the daily trades for each fund and you will notice that there is plenty of trades occurring daily.
I've personally invested in FNZ, MDZ and US 500.
Would I invest in just one or a few companies or invest in all the underlying companies of a Smartshares ETF? It's a no-brainer. I believe that passive investment is the future and it will only continue to grow in NZ.
Last edited by icyfire; 17-04-2017 at 11:49 AM.
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Thanks for your replys blackcap and icyfire.
I haven't actually heard of market makers before! I'll do a bit of research into them...
Like you icyfire I think etf's will continue to grow in NZ and as we can contribute hopefully for the next 15-20 years I think they are a good nest-egg for later years.
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Originally Posted by Benny1
Thanks for your replys blackcap and icyfire.
I haven't actually heard of market makers before! I'll do a bit of research into them...
Like you icyfire I think etf's will continue to grow in NZ and as we can contribute hopefully for the next 15-20 years I think they are a good nest-egg for later years.
HI Benny1, marketmakers are contracted by the NZX or whoever is providing the security to ensure that there is an active buyer and seller in the market so that liquidity exists so ppl are comfortable holding the security. Their reward is that they can make money on the spread.
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Member
While I agree that ETF's are a no brainer in that they are low cost and you can be well diversified. Has anyone thought about future returns? With more and more people pumping regularly into a set number of companies e.g. the S&P500, I wonder if future returns will be less than historic.
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Originally Posted by FIsaver
While I agree that ETF's are a no brainer in that they are low cost and you can be well diversified. Has anyone thought about future returns? With more and more people pumping regularly into a set number of companies e.g. the S&P500, I wonder if future returns will be less than historic.
Interesting question. I do wonder though what this premise is based on? Not because companies are going to be making less money than in the past because you allude to more people pumping regularly eg. However if ppl were not pumping regularly into ETF's surely they would be pumping money into other funds and directly into shares themselves that are also part of the S&P 500 and thus not actually change anything? Thats my take on it but I am happy to hear other thoughts. I thought the NZ market has been distorted slightly the last 10 years with the advent of Kiwisaver (ie a lot more funds in than out in its initial stages) until someone pointed out that the amount of $ into NZ equities from Kiwisaver is not as large as I thought it might have been.
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Member
I love the idea of Smartshares, definitely diverse, but my big concern is the small returns they have. A lot only give 5%. Which takes a long time to grow your money. Is it not much better investing in a company that pays 10% return? Just putting my thoughts out there, be interested to hear others opinions on this.
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Member
Originally Posted by Pipi
I love the idea of Smartshares, definitely diverse, but my big concern is the small returns they have. A lot only give 5%. Which takes a long time to grow your money. Is it not much better investing in a company that pays 10% return? Just putting my thoughts out there, be interested to hear others opinions on this.
Let's take for example the Smartshares fund FNZ which generated an Investor Return of 6.51% over the last year and on of top of that capital gain it also pays a Gross Dividend of 5.40%.
Which company are you referring to that pays 10% return? And have you taken into account the high risk that comes with that 10% return?
Last edited by icyfire; 18-04-2017 at 11:10 AM.
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Originally Posted by Benny1
Thanks for your replys blackcap and icyfire.
I haven't actually heard of market makers before! I'll do a bit of research into them...
Like you icyfire I think etf's will continue to grow in NZ and as we can contribute hopefully for the next 15-20 years I think they are a good nest-egg for later years.
Hey Benny1, if you look at the depth of FNZ as at 11.28AM you will see on the bid a buyer for 75,000 shares at 2.21 and a buyer for 100,000 shares at 220.5.
On the sell side you see a seller of 75,000 shares at 222.2 and a seller of 100,000 shares at 222.7.
These are your market makers. No problems with liquidity ever.
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