Make Tax Free Savings Exciting!

Transcription

1 Make Tax Free Savings Exciting! By Ferdi Heyneke Tel:

2 About Afrifocus Afrifocus has been a stockbroker member of the JSE since 2000 and of ZARX since 2007 servicing institutional and private clients. We produce independent research and offer extensive investment insights, execution of trades and a personalized service to all our clients. We recently also obtained a FSP licence (No 48810) which allows us the opportunity to expand into the broader wealth management field.

3 Our services

4 Investments Stockbroking & Online Trading Portfolio Management Wealth Management Tax Free Savings Accounts

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6 Are you ready to invest?

7 Are you employed? Do you have any debt? Do you have insurance? Do you have medical cover? What is your risk profile?

8 JSE/FTSE All-Share Index

9 The Benefits of Tax Free Savings

10 Save without paying tax Invest in a diversified ETF portfolio Achieve your life goals Easy & Affordable

11 Important to Note Foreign ETFs are subject to offshore dividend tax which is not recovered. The portfolio manager will also levy a management fee against the ETF. See for the expense ratios and factsheets of the various ETFs.

12 What is an ETF?

13 An ETF (Exchange Traded Fund) is a fund that tracks a specific index representing a basket of underlying assets such as equity, bonds, property, preference shares etc. An ETF trades like a normal listed share on a Stock Exchange and is regularly updated in terms of a mandate by the relevant issuer.

14 The chart above highlights an annual R investment in the TFSA growing at 10% per annum. Assuming a 25% tax rate, the taxed investment of R will be worth R1.8m after 25 years. In TFSA, you will have an additional R in your pocket!

15 Contributions

16 R per tax year R over lifetime

17 Withdrawals

18 The Receiver of Revenue states that an investor can deposit a maximum of R per annum into the account without incurring any penalties. So a couple of scenarios below explain this. If the investor withdraws from the investment at any time, he or she will not incur any penalties. If the investor deposited R33 000, withdraws the money and then redeposits R within the same tax year, the Receiver will deem that a total deposit of R has been made. You will be penalised on R by paying marginal tax on that amount. If the investor deposited R33 000, withdraws the money and then deposits R within the following tax year, the Receiver will deem that a total deposit of R has been made. No penalties will be incurred.

19 Approved ETF Investments

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23 ETF Fact Sheets

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25 A Technical View

26 Satrix Sygnia World index ETF

27 JSE Satrix 40 ETF

28 Property Tracks SAPY ETF

29 NFGOVI Bond ETF

30 Which ETFs do I invest in and what should my investment strategy be? It all depends on your risk profile. You may select a high, medium or low risk option on the mandate document you complete with us. The low risk option (income) is simply an investment in cash, earning interest at the rate set by the JSE Trustees. For the medium risk option (balanced) we would recommend the NEWFUNDS MAPPS GROWTH ETF which is invested in South African Equities, Bonds and Cash. For the medium to high risk option (equity) we suggest the SATRIX40 ETF, which tracks the JSE Top40 Index. Can I choose my own ETF? Yes you can. Simply tick Option D on your mandate document. If you want to change the selection, please contact your Afrifocus portfolio manager. He will also provide you with an updated list of ETFs approved for the TFSA.

31 Portfolio Choice Guidelines

32 Income Portfolio Low to Medium Risk Profile 40% 15% 15% Coreshares Property Coreshares Global Property 30% Coreshares Preference Cash

33 Balanced Portfolio Medium Risk Profile 25% 25% 25% 25% Cash JSE Satrix 40 Bonds Coreshares Property

34 Equity Portfolio Medium to High Risk Profile 20% 20% 30% 30% Sygnia World Coreshares Top 50 Satrix Dividend Coreshares Midcap

35 International Equity Portfolio High Risk Profile 20% 20% 20% 40% Sygnia World Satrix Emerging Coreshares Global Div Coreshares Global Prop

36 Why Afrifocus?

37 Low cost option One-on-one relationship Full transparency 24-hour online access Debit order facility or lump sum Multiple investment options

38 Cost Breakdown

39 Management fee of 0.5% per annum Transaction cost Purchase & Sale No admin cost

40 Transaction Cost Example Transaction value: R I.E. Purchase c Basic charge: R80.00 Brokerage: R Ins levy: R0.07 JSE Set: R3.86 VAT: R81.44 Total: R = +/- 1.95%

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