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TAX FREE SAVINGS ACCOUNT (TFSA) - SATRIX Exchange Traded Funds (ETF's)

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Satrix now offers tax free savings accounts across its comprehensive fund range.

What is a tax free savings account?

On 1 March 2015, National Treasury introduced tax free investments to encourage people to save. The return you earn on this investment is completely tax free.

Government's explicit intention with these accounts is not to replace retirement savings. In fact, the account is viewed as a medium-term investment and aims to prevent people from accessing their retirement funds in times of need.

Why save in a tax free savings account?

  • Any interest, dividends or capital gains from your tax free investment will be tax free. This means that you don't pay tax on the growth of your investment at all.
  • Your money can grow faster in a tax free investment than in a regular savings account because you don't pay tax on the investment return.
  • Saving in a tax free investment gives you flexibility as you don't have to commit to any future contributions. You can withdraw from your investment at any time. However, withdrawing funds may prevent you from reaching your savings goals and will use up part of your lifetime limit for tax free savings.

How much can I save?

There are limits on the amount you can save in a TFSA. You may contribute up to R30 000 per tax year up to a lifetime contribution limit of R500 000. Make sure you keep track of how much you've paid into the account so that you don't exceed your limit across all approved tax free investments (at Satrix or other providers).

Can I have more than one TFSA?

Yes. There is no limit on the number of tax free investments you can have. Make sure your annual contributions across all approved tax free investments (at Satrix or at other providers) do not exceed the R30 000 annual contribution limit.

What happens if I invest more than R30 000 per tax year in tax free investments?

There will be tax penalties if you invest more than the annual contribution limit stipulated by National Treasury. Forty percent of the contribution above R30 000 per year will be deducted as a penalty. To avoid paying this penalty, make sure that your annual payments across all approved tax free savings accounts (at Satrix or at other providers) stay below this limit.

Can I invest in a tax free investment for my children?

Yes, parents can invest in TFSAs for their kids. The investment will have to be in the name of the child and the R30 000 annual limit will still apply to each individual family member. A monthly contribution over a number of years (free of taxes on income earned) can be an excellent way to save for their education.

Can I transfer a tax free investment from one provider to another?

No transfers between tax free investment providers will be allowed until 1 March 2016. National Treasury intends to expand the Regulation next year to allow individuals to transfer any amount in a tax free savings and investment account from one institution, or product provider, to another.

So, for now, if you'd like to use an existing unit trust account as your tax free savings account, or you are an existing Satrix client, you will need to disinvest from that account and re-invest into a tax free savings account to take advantage of the tax free saving. Bear in mind that disinvestments could have CGT implications.

May I withdraw my money from these accounts at any time?

Yes, you may. These accounts are what we call 'liquid', meaning that there is no lock-in period and you can get access to your money relatively quickly. However, if you do withdraw money from the account, you can't replace it: e.g. if you invest R20 000 into your tax free account and then withdraw R10 000, you can only invest an additional R10 000 into that account. You cannot use the account as you would your bank account. You need to view this as a long-term savings account.

What is the minimum amount I can invest with Satrix into a TFSA?

The following Satrix minimum amounts apply: Satrix Unit Trusts and ETFs: R1 000 lump sum / R300 monthly (these minimums are effective 01 June 2015)

Satrix lets you own the performance of the JSE's top blue chip companies with a single transaction.

Satrix securities are listed Collective Investment Schemes that replicate the dividend and price performance of a particular index.

They provide the same returns as would be received had the investor directly purchased shares in each company in the relevant JSE index. The JSE, in collaboration with FTSE, determine a number of indices which are used as barometers of the market (or sectors thereof).

Source: Satrix

Satrix Tax Free Savings Exchange Traded Fund

Satrix now offers tax free savings accounts across its comprehensive fund range.

  • Satrix TOP40 (top40)
    (Top 40 listed companies index)
    JSE Code:STX40
  • Satrix INDI25 (indi)
    (Top 25 listed industrial companies index)
    JSE Code:STXIND
  • Satrix FINI15 (fini)
    (Top 15 listed financial companies index)
    JSE Code:STXFIN
  • Satrix Swix Top 40 (swix)
    (Less volatile Basket of Top 40 Shares)
    JSE Code:STXSWX
  • Satrix RESI (resi)
    (Major 10 resource companies listed on the JSE)
    JSE Code:STXRES
  • Satrix Dividend Plus (divi)
    (Top 30 companies paying higher than average dividends)
    JSE Code:STXDIV
  • Satrix RAFI 40
    (RAFI 40 index selects companies on the basis of an indexing method that utilizes various fundamental accounting measures for choosing the constituent companies in the index, rather than the more traditional market capitalization method.)
    JSE Code:STXRAF

click here for more satrix information and how to apply

A single transaction. Lower costs.

Satrix is designed to give low-cost exposure to the JSE. Firstly, there is only a single transaction cost when you buy Satrix. Secondly, the stocks that make up Satrix change very seldom. Unlike actively managed funds, where the managers are constantly dealing and churning the portfolio in search of the next winners, investors in Satrix don’t have these costs. You get transparency, value for money and instant access. Satrix is that simple, that cost effective and that powerful.

The advantages of Satrix are easy to see:

  • You have a well-diversified investment.
  • You can buy or sell at any time, at a price you know and which reflects net asset value.
  • You can invest at a low cost. Sales and transaction costs are external to the fund; Satrix trades at, or as near as possible to, net asset value.

Satrix Performance:

Satrix Fund Performance figures, income reinvested on payment date
Satrix Fund JSE Codes
1 year
3 year
5 year
Since Inception
   
     
Satrix Swix Top40 (swix)
STXSWX
2.72%
14.52%
14.91%
12.49%
Satrix Resi (resi)
STXRES
-19.15%
-7.33%
-8.01%
0.32%
Satrix Rafi40 (rafi)
STXRAF
0.45%
9.31%
9.76%
13.65%
Satrix Indi25 (indi)
STXIND
8.17%
17.56%
23.05%
19.75%
Satrix Fini15 (fini)
STXFIN
-7.37%
13.52%
16.63%
14.81%
Satrix Dividend Plus (divi)
STXDIV
-6.19%
3.65%
7.70%
9.19%
Satrix Top40 (top40)
STX40
2.20%
12.21%
12.75%
15.33%
Source: Morningstar©, June 2016, Satrix Fund Fact sheets.
(past performance is not necessarily a guide to future performance)

click here for more satrix information and how to apply

...Short Description of SATRIX Exchange Traded Funds:

Satrix 40 gives investors the price performance of the FTSE/JSE Top 40 index. It enables you to invest in a single security hat provides a diversified portfolio of thetop 40 companies on the JSE, measured by their market capitalisation. Every quarter, Satrix 40 pays out all the dividends received from the JSE’s Top 40 companies, less costs.

Satrix INDI gives you the price performance and dividend yield of the FTSE/JSE Industrial 25 index.

Satrix FINI gives you the price performance and dividend yield of the FTSE/JSE Financial 15 index.

Satrix SWIX provides the price performance and yield of the FTSE/JSE Swix 40 index. A Less volatile Basket of Top 40 Shares.

The Satrix Swix Top 40 provides a low cost and efficient way to invest in the FTSE/JSE Shareholder Weighted Top 40 Index. This index downweights the shares in the Top 40 index held by non-South African shareholders.

Thereby reducing the net weightings of resources and dual listed stocks and increasing the weightings of financial, industrial and telecommunications shares, relative to the Top 40 Index.

This index is regarded by South African asset managers and institutional investment advisers as the primary benchmark for the performance of the South African equity market. Accordingly, the Satrix Swix Top 40 is designed to appeal to institutional and long-term investors.

The FTSE/JSE Swix Top 40 Index contains the Top 40 companies in the JSE weighted by their market capitalisation, free float and liquidity, but with certain constituent company weightings being further adjusted for non- South African shareholdings.

Satrix RESI provides the price performance and yield of the FTSE/JSE Resi index. Invest in Resources.

The Satrix Resi provides investors with a low cost and tradable means of investing in the top 10 resource shares listed on the JSE Securities Exchange.

The Satrix Resi provides a balanced exposure to the global mining holding companies, gold mines, platinum, uranium and base metal mines, mining resource companies and Sasol listed on the JSE.

It gives direct exposure to the resources sector of the JSE, which enables investors to benefit from trends in global commodity cycles.

The FTSE/JSE Resi is an index comprising the major 10 resource companies listed on the JSE, based on market capitalisation, free float and liquidity of these resource companies.

Satrix Divi, the Satrix Dividend Plus will provide a means of investing in a portfolio of companies
paying higher than average dividends on the JSE. The Satrix Divi portfolio will invest in the FTSE/JSE Dividend Plus Index. This consists of 30 companies, selected from the JSE Top 40 and Mid-Cap indices, that are expected to pay the best normal dividends over the forthcoming year. The unique features the Satrix Divi offers, are:

  • It will appeal to investors seeking a high income portfolio on the JSE.
  • It holds the promise of outperformance, as the high dividend paying component companies in the Satrix Divi are likely to re-rated relative to the rest of the market.
  • The Satrix Divi will have a low correlation with other indices on the JSE and accordingly, it provides an ideal product for diversifying investment portfolios.
  • The high yield nature of the Satrix Divi provides a defensive investment for the risk averse investor.

Satrix RAFI 40

  • It is based on a fundamental index – the RAFI 40 index selects companies on the basis of an indexing method that utilizes various fundamental accounting measures for choosing the constituent companies in the index, rather than the more traditional market capitalization method.  Factor 1: Book Value; Factor 2: Cash Flow; Factor 3: Dividends; Factor 4: Sales
  • It is a Total Return Index – Total Return Indices (TRIs), measure the total return on the underlying index, by combining both the capital performance plus the reinvestment income of the constituent companies in the index, i.e. capital growth plus yield.
  • The RAFI 40 indices also demonstrates significantly lower volatility than the FTSE/JSE Top 40 market cap-weighted indices, indicating lower risk for long-term investors.

click here for more satrix information and how to apply

SATRIX - Advice, Info & Easy application

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