Mak­ing cash work for you

Finweek English Edition - - MONEY CLINIC -

PROPTRAX TEN: If you want ex­po­sure to the en­tire prop­erty sec­tor this is per­haps one of the eas­i­est and most cost-efficient ways to in­vest in the ma­jor play­ers. The tracker fund is an equally weighted in­dex port­fo­lio, based on the Top 10 prop­erty com­pa­nies on the JSE. You’ll need to open a stock­broking ac­count and, yes, that means you have to be Fica’d. A man­age­ment fee of 0,45% is charged. PROP­ERTY UNIT TRUSTS: Corona­tion Fund Man­agers, Stan­lib and Cat­a­lyst Fund Man­agers are among the bet­ter known prop­erty unit trusts in the sec­tor and are out­per­form­ing the run of the mill unit trust of­fer­ings. Unit trusts are well reg­u­lated, liq­uid (so you have ac­cess to your money within 24 hours) and com­pet­i­tive, as there are so many of­fer­ings out there. DIV­I­DEND PORT­FO­LIOS: If you don’t have ac­cess to the in­for­ma­tion, get some help. Fol­low the JustOneLap steps but also take into ac­count some stocks have an obli­ga­tion to con­tinue their div­i­dend pol­icy (such as PPC, thanks to an em­pow­er­ment deal tech­ni­cal­ity) or are per­haps not the best per­form­ing share on the JSE (think Hu­daco) but will main­tain their div­i­dend pol­icy. “Div­i­dends are an in­cen­tive from the com­pany to in­vestors to keep hold­ing its shares,” says Si­mon Brown. SATRIXDIVI: The Sa­trix Divi ap­peals to in­vestors seek­ing yields, as div­i­dends are paid four times a year. The cur­rent yield is only 3,12%. How­ever, com­pa­nies’ div­i­dend yields grow on av­er­age by 20% a year: the longer you hold it, the higher your re­turn will be. COM­POUND­ING YOUR MAT­TRESS MONEY: The ultimate trick up an in­vestor’s sleeve is rein­vest­ing div­i­dends and reap­ing the com­pounded ben­e­fit.

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