ETF Migration of Exchange Traded Fund (ETF) products

Discussion in 'Shares & Funds' started by Simon Hampel, 20th May, 2008.

Join Australia's most dynamic and respected property investment community
  1. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,412
    Location:
    Sydney
    I saw this on the CommSec website: News

    I was wondering what the net effect for investors is? Does this change the way we invest in ETFs?

     
    Simon Hampel, 20th May, 2008
    #1
  2. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,401
    Location:
    Buderim
    Hi Sim,

    I was just about to start investing substantally in ETFs. Personally putting them in with warrants has turned me off them. I don't ever trade warrants and derivitives which I think you have to completed a separate application for stating that you understand the risks involved. So I assume now that if you want to trade/invest in ETFs the warrant application will have to be completed.

    I assume they may also put LICs into this group at a later date? I do own various LICs and would be very unhappy with such a change.

    Anyhow this in my mind is really stupid. Very conservative investors are put off anything that is lumped in with derivitives area. Hence new investors may avoid ETFs more so after this change.

    Add to this that there is an upcoming major tax review don't be surprised if LICs lose their CGT discount due to the fact that they use a company structure. This happened after the Ralph Review and LIC share prices plummeted. However Costella stepped in to reverse the change due to pressure from the major LIC lobby groups. The ATO was far from happy as it created unnecessary complexity for a discrete group of companies. One can't count on Labour stepping in like Costella did if LICs were to once again treated like all other companies in the future.

    So given these issues I'm tempted to go back to investing directly in individual stocks. Major banks and other blue chip dividend paying stocks form a major holding of the large LICs anyhow.

    Some more info on the ETF migration is found here:

    https://www.asxonline.com/intradoc-...vices/documents/communications/asx_020873.pdf

    Cheers - Gordon
     
    Last edited by a moderator: 21st May, 2008
    Nodrog, 21st May, 2008
    #2
  3. Tim__

    Tim__ Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    105
    Location:
    Lismore NSW
    Sim,

    my understanding of this(after contacting ASX and StreetTracks) is that the move is more related to the computing platform and processing rather than any change in the nature of the security itself.

    Tim
     
    Tim__, 21st May, 2008
    #3
  4. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,412
    Location:
    Sydney
    I'm more concerned (like Gordon), with how it affects the process by which we invest in ETFs - has the process for investing changed (in concept or in the details) with this move?
     
    Simon Hampel, 21st May, 2008
    #4
  5. DaveA__

    DaveA__ Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    580
    Location:
    Sydney, NSW
    what about brokerage charges...

    arnt options etc usually more expensive to trade than normal stocks.... so may make the entry fees into this a bit higher..
     
    DaveA__, 21st May, 2008
    #5
  6. ashes

    ashes Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    110
    Location:
    Brisbane
    It is still a three letter code. I would have thought it would have looked the same from a broker order point of view?
     
    ashes, 21st May, 2008
    #6
Build Passive Income WITHOUT Buyers Agents!

Build Passive Income WITHOUT Dropping $15K On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia