Podcast: How to compare investment products

Kristia van Heerden Latest, The Fat Wallet

Not all investment products are created equal. This week, listener JP was struggling to understand why his RA was performing so poorly while his tax-free account was making money. The answer is important for everyone who holds more than one investment product. 

This week we help you (and JP) work out what exactly you should be looking at to ensure you’re comparing apples with apples. We discuss the role of Regulation 28 in the performance of retirement products, how different asset classes behave, the role of active managers and what the rand/dollar exchange rate has to do with it all.

The bleeped show is below:


I need some clarity on how an RA can perform so poorly when an ETF does so well. 

Firstly rate of returns: Investec is -17.58 where my Satrix is +6.4 percent over this troubling period. That’s a difference of almost 24% in the same market. 

The one with Investec is with a financial advisor who charges 2.8% fees (that includes Investec platform, admin, etc) and is supposed to be a Inflation + 6% growth portfolio.

My Satrix platform charges less than 1% fees.

He holds the following Satrix ETFs: Divi, property, 40, World and S&P 500.

How is it that financial institutions and professionally trained people can’t get investment right but an index investor does?


Win of the week: Alida

When are dividend distributions assigned?

I’ve noticed that most ETFs will only distribute the dividends for a financial quarter a few weeks after the end of the quarter and it has me wondering:

If I own some ASH 1200 at the end of the quarter, but then sell that before the dividends are distributed, do I still get the dividends for that quarter or not? Do I have to hold the shares until the dividends are distributed a month or so after the end of the quarter?

Similarly, let’s say I buy after the end of the 1st quarter, but before the distributions, would I then get the dividends for the 1st quarter?


I’ve spent time reading as much as I can find about all three of our global property ETFs to make a decision on which one to hold. Even though it will form a small part of my overall portfolio, this will be one of only 3 ETFs I ever hold, and plan to hold it forever, so it’s important for me to make the right choice now. 

The 1nvest product seems like the clear winner and I’m buying it currently. They simply chuck your funds directly into the iShares Global Property REIT ETF in the US, which seems like one of the best and most widely used ETFs in its class. It tracks the FTSE EPRA/NAREIT Global REIT Index. The index is used by a ton of other ETFs around the world.

The CoreShares and Sygnia products track some other arbitrary thing: The S&P Global Property 40, which sounds super official until you google it and the rest of the world is like.. “nah dude, that’s not a real thing” It seems that these are the only two products on the globe that I can find that actually track this ‘global index’. 

If you look into ASHGEQ’s S&P1200, you get charts, factsheets, methodology documents, everything. But there’s almost no information online on this one. It’s basically a ghost index. Something about this just makes me feel uneasy, but maybe I’m being too pedantic? What are your thoughts? 

Also, and this was the final kicker for me, they pay dividends bi-annually instead of quarterly like the 1nvest product or any other self-respecting, well-to-do fund. 

If the 1nvest product is basically just rolling up my funds and passing it to the US iShares ETF, is that hefty US withholding tax already baked into all my dividends before they come full circle into my account? 

If that’s the case:

Am I being a dumbass holding this thing in my TFSA instead of one of the fully locally-crafted products like the Sygnia? Now, I understand that any global ETF has a certain amount of baked-in withholding tax from other countries, but if the 1nvest fund is basically a middle-man for a totally foreign ETF, am I needlessly adding an entire second layer of unavoidable withholding tax into my supposedly tax-free portfolio? Or perhaps is this all pretty negligible in the grand scheme of things? It’s okay (in fact preferable) to tell me that all of this is literally a non-issue and it’s just my lock-down brain overthinking literally everything.

You guys mention the CoreShares one a lot, but… its more than twice as expensive as the Sygnia (in terms of TER). Why would I go for something that does the same thing for more than double the price? What am I missing here?


I have only recently started earning a relatively large amount of money abroad. At 61 I have to make sound investment decisions – there is very little margin for error at this stage! 

The kind folks over at the Fat Wallet FB group have assisted, but I still feel the need of some more practical pointers to guide me. My situation is as follows:

* I have around R38k monthly to invest

* My Emergency Fund is available and will most likely use Tyme Bank.

* I am going to choose Brightrock for disability and dread disease cover – heard about them on the Fat Wallet FB group. Are there other providers which you could suggest I try for the cover mentioned? 

* I have no debt…however:

* …I pay R2 500.00 monthly for storage of my things in South Africa and shuddered when I heard Kristia’s definition of an asset. It’s a nightmare cost and really don’t know what else to do with beloved items of furniture.

* I plan to open TFSA and have R36k available for tax year 2020/21 deposit as soon as I can. I have no idea what to invest in. ETFs sound good since in this case I will hopefully have no need to touch this money, hopefully not for a  long time.

* I have around R300k ready to invest at present – the foundation for the house savings.  I have opened a Sygnia Money Market Fund to invest this. However, I am concerned that I could do better in terms of interest elsewhere! Would I be keeping abreast of inflation etc? 

* I would like to buy house in around 4 years in SA, hopefully cash – with the money I hope to have saved from now until this point. In this case,  I wil need to work until age 70 to save in order to cover my living expenses ( age 65 – 70). This is the reason I have been advised to use a money market vehicle – safety and availability, but could I not do better elsewhere?

Do you think that this is the best course of action in my case? There is a need to both grow and protect my funds. However, I have heard Kristia talk about Index Funds and wondered if these applied in my case. They sound wonderful. Someone mentioned that I should be careful of my asset allocation – specifically stocks because of the time factor?

* I have heard Simon mention that he has an RA. Should I have one? 

* What are your thoughts on a living annuity in my case and how does this product work?

* I have been advise to rather place the salary I earn in the Gulf country into a USD account and not bring it into ZAR. I haven’t a clue on how to do this and wonder how safe this is? Interactive Brokers and Degiro not applicable – the former’s fees are too expensive and I don’t feel confident about Degiro. I get paid in a Gulf currency and most likely have the option to transfer funds to another account  in any of the major currencies.


Are European joint accounts included in your estate upon death? Also are they subject to SITUS tax from foreign jurisdictions?


Do we invest as much as possible and never enjoy it? Presumably most people want to leave a fortune to their heirs, thus amassing a stash and never actually drawing down for purchases – yes like a car, holiday or some other significant purchase. 

At what point does one reach a “number” and after this anything more, whether you actively add or it grows via its own momentum, do you start just taking out ?

I suppose this is really relevant for those without dependents and singles where there really is no one to leave it to.

The Fat Wallet Show with Kristia van HeerdenThe Fat Wallet Show is a no-nonsense personal finance and investment podcast hosted by Kristia van Heerden and Simon Brown. Every week we answer questions by a growing audience of finance enthusiasts. Submit your pressing money and investment questions to ask@justonelap.com.

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