ETF: What ETF should I buy?

Your debt is paid, your insurance and medical aid policies have you covered and your emergency fund is looking healthy. You are ready to start investing! We spoke to ETF guru Nerina Visser about an investment starter pack to help you get acquainted with the markets.

TIP: Click here for the full podcast with Nerina Visser.

I can only invest a small amount every month

CoreShares Top 50 (CTOP50)

The good news is you don’t need to be wealthy to invest. The amount you put towards your emergency fund every month will be enough to get you invested, even if it’s just R100. Nerina recommends starting out with a well-diversified South African ETF like the CoreShares Top 50 ETF. This ETF is invested in the 50 biggest companies listed on the JSE, but doesn’t invest more than 10% in any individual share.

TIP: Listen to CoreShares CEO Gareth Stobie explain how this ETF is put together in this podcast.

I have R1000 or more to invest every month:

CoreShares Top 50 (CTOP50)

Deutsche Bank x-tracker MSCI World ETF (DBXWD)

NewFunds inflation-linked ETF (NFILBI)

Investors with R1 000 or more to invest every month should start diversifying their portfolio, Nerina recommends.

Once you are invested in the JSE, you can start looking abroad for investments. The DBXWD ETF has long been a favourite of the Just One Lap team, and also gets the nod from Nerina. Long-term investors who hold this ETF have exposure to 1700 companies from across the world, with 60% exposure to the American stock market.

Next, Nerina recommends adding inflation-linked bonds to your portfolio. While bonds don’t perform as well as shares in the long run, they protect your money from losing value and help stabilise your portfolio. The best part is that the money you earn when you hold this ETF is not considered a capital gain, which means you don’t have to pay capital gains tax on it. At a total expense ratio (TER) of 0.24%, we like the NewFunds inflation-linked ETF.

I have a lump sum to invest

CoreShares Proptrax Ten (PTXTEN)

If you’re fortunate enough to have a larger single amount to invest into your tax-free savings account, Nerina recommends adding a property ETF like the CoreShares Proptrax Ten to the three ETFs mentioned above.

Nerina likes to use the TFSA accounts to save tax on as many fronts as possible. Property investments will be liable for tax on capital gains, dividends and interest. Using your TFSA account for this type of asset exposure will ensure that the money you would have paid in tax earns you more money instead.

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I only have R100 to invest every month

I have R1000 to invest every month

I have a lump sum to invest once

CoreShares Top 50

DBXWD

NewFunds ILBI

CoreShares Top 50

DBXWD

NewFunds ILBI

CoreShares Proptrax 10