Every six months Sygnia pays dividends on their Exchange Traded Funds (ETFs) and social media lights up with people complaining that Sygnia has ‘stolen’ a chunk of the dividend. There’s a long and a short answer here.
The short answer is no, they did not.
What Sygnia does is detail their management fee as a line item and this gets everybody hot under the collar. But all ETF issuers charge a management fee, Sygnia just details it whereas the other issuers don’t.
Below is my statement showing the dividend for the 2,910 SYGWD I own.
SYGWD dividend statement
The ‘ETF fee’ of R418.43 works out at 14.4c per ETF. Using a closing price of 4280c this works out to a fee of 0.33%, double it as the fee is twice a year and you get a fee of 0.66% while the TER for this ETF is 0.69%. So right in line with the TER.
The longer answer is yes – these fees cut into your investment and it’s important to be aware of them.
Simon
Tip: You can find out more about fees charged on ETFs (TER – Total Expense Ratio) here
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
ETF blog