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Tax-free savings accounts (TFSA) are one of the most building blocks in any equity portfolio. The advantage of compounding tax-free returns over a long period is incredibly powerful and can really turbocharge a long-term wealth creation journey.

To discuss the importance of TFSA investments and the opportunities available to investors in the ETF universe, familiar voice Siyabulela Nomoyi of Satrix* returned to the Ghost Stories podcast. 

*Satrix is a division of Sanlam Investment Management

Satrix Investments Pty Limited and Satrix Managers RF Pty Limited are authorised financial services providers. Nothing you have heard in this podcast should be construed as advice. Please do your own research and visit the Satrix website for more information on all their ETF products. This podcast was published on the Satrix website here.

Full transcript:

Introduction: This episode of Ghost Stories is brought to you by Satrix, the leading provider of index tracking solutions in South Africa and a proud partner of Ghost Mail. With no minimums and easy, low-cost access to local and global products via the SatrixNow online investment platform, everyone can own the market. Visit satrix.co.za for more information.

The Finance Ghost: Welcome to this episode of the Ghost Stories podcast. It comes hot on the heels of a pretty crazy time in South Africa where our budget speech casually did not happen! When I was prepping for this podcast with my guest today, we talked about: wow, you know, I wonder if the tax-free savings limits will be increased and if there’ll be something to encourage people to save? Then meanwhile, there’s a budget that basically wants to fleece us of more money through VAT and it got thrown out. So, not exactly what anyone was hoping for, I don’t think. But anyway, it is what it is. We’ll wait and see what the next version of the budget speech looks like in this ongoing little disaster.

And in the meantime, all of us as South Africans will just keep doing what we do, which is doing our best to move forward in life. To help with an understanding of how tax-free savings can help you with that, we have Siyabulela Nomoyi from Satrix* on the show.

Siya, you’ve been on many, many times. You’re certainly no stranger to the listeners of the Ghost Stories podcast. Having said that, we had some big tech issues with your laptop now, so even though your laptop has also been on many, many times, it decided that today was not its day. This podcast was almost like the budget speech in that it last minute almost didn’t happen. But luckily here we are, you came up clever plan and we can do the show. So welcome.

Siyabulela Nomoyi: Yeah, thanks Ghost. Thanks for having me. Bit of drama to start off, but let’s do it.

The Finance Ghost: No, absolutely. We made a plan.

Tax-free savings accounts, that’s a favorite topic of mine. I think it’s a favorite topic of yours. And yet I think there are still a ton of people out there who firstly just don’t really understand them or why they are valuable. Then for those who do understand that this stuff exists, there are a lot of mistakes that get made out there, some of which is just driven by, in my opinion, quite bad advertising, etc. We can get into that later.

For me, it’s a mistake not to have a tax-free savings account. It’s rare to make a blanket statement like that, but I feel confident in saying that if you don’t have a tax-free savings account, as a South African, you are severely missing out, right? It’s a liquid way to save with a government incentive. That’s a wonderful thing, right? Would you agree with that?

Siyabulela Nomoyi: Yeah. I think it’s quite important that anyone listening to this recording goes and actually educates themselves more on their tax experiences which they are exposed to when they are investing in their direct accounts or using platforms, brokers, LISPs through a bank and so on. For anyone to actually appreciate the importance of a tax-free savings account, they need to first understand that part, otherwise this topic won’t make any sense to them.

Very quickly, when you are investing in capital markets, holding shares, commodities, bonds and so on, the aim there is to have your capital grow, right? Otherwise you would not be investing. Also, I know South Africans love dividends, they love dividend income. Others actually invest just to get income as well.

The taxman also takes a cut from your gains, unfortunately. And this comes in the form of being liable to pay capital gains tax. And when you receive dividends, you are taxed on your income and interest as well.

So, this applies to every legal investment you do. You will be taxed. This is where the tax-free savings account actually comes in. And it’s in the name: tax free.

This means that you can open account in your name, in your kid’s name, in your spouse’s name or your grandma or whatever, and that is actually tax free.

You can look at it like this: when you look at all the pockets on your pants, that one small pocket which you can only stick one finger in, that’s your tax-free savings account. This means whenever you invest, you can put money in all your pockets, front, back pocket, you can go to the pocket that’s down by your knees, but the taxman is always going to come and tax your gains in those pockets. This is where the small tax-free savings pocket comes in. All the money you put in it, if you have gains or you receive income like dividends or coupons in there, the taxman does not touch it, it’s all yours.

But remember, it’s quite a small pocket. It’s got its limits, value wise. At the moment clients are only able to save up to R36,000 per year and can’t go over that. Otherwise, they will be taxed on the difference.

It’s quite a tax efficient way of investing and it’s a way to encourage individuals to actually save or should I say to invest more while not actually being worried about things like tax.

The Finance Ghost: So Siya, I never thought I’d say this out loud ever in my life, but now I’m imagining what your pants look like – awkward, I know – with that pocket down the front by your knees. I feel like I don’t have a pocket down by my knees. I need to see what kind of pants you’re wearing because you clearly have more pockets than me. Maybe there’s some other ways of saving that you know about that I haven’t figured out yet.

Siyabulela Nomoyi: You need to keep up with the fashion, eh?

The Finance Ghost: Apparently! I just don’t have enough pockets. This is clearly an issue in my life, but I think the point is that you’ve got to take advantage of the pockets that you do have. And this is why I say a tax-free savings account is just always a good idea. Even if you’re not able to max it out every year, at least do what you can.

I think the name tax-free savings is just so misleading in my opinion. I wish this thing was called a tax-free investment account because that’s the way to treat it. That’s what you should be doing with this thing. You should be putting money in and letting it grow over the long term so that you are compounding your returns pre-tax effectively. It really makes a gigantic difference. Those who understand the power of compound interest will know that if you’re compounding pre-tax gains, that looks very different to compounding post-tax gains. It really does. I’ve seen ads out there, I won’t mention specific names but I’ve seen ads of stuff like oh, save towards your wedding using a tax-free savings account. Now the issue with that is yes, it might give you a short-term boost to your savings because you’re not going to pay tax. But if you’re saving towards an event, you have to withdraw for that event, right? You’re specifically saving towards a date and when you withdraw from your tax-free savings account, that’s it, your contribution limit is a lifetime limit. There’s no allowance to say, okay, well sorry that you had to take some out, don’t worry about it, you can put that back in later. Once you’ve hit your lifetime limit, you’ve hit your lifetime limit.

What are your views on this? Do you also wish it was called a tax-free investment account like I do?

Siyabulela Nomoyi: Yeah, so funny part about this Ghost is that if you go on the SARS website, it’s actually called the tax-free investment. It’s actually TFI there. They are literally talking about investing and not savings. There you go. It’s actually tax-free investments. But look, there’s a long list of providers who offer this type of account either through a licensed bank or an FSP, insurers and the government and so on. Some of them actually have savings products and I guess Ghost, marketing is not my strongest skill, but I’m guessing TFSA is much more sexier than TFIA, right?

So, back to your point, I would encourage anyone to make use of tax-free savings accounts for long-term investing rather than short-term savings. I mean you’re quite right when you’re saying that it’s going to give you a short-term boost, but you really want to realize that over the long term. And for the positions that you buy inside your – I’m going to call it a TFSA to shorten it – all the income and realized gains are all yours. You can rotate between positions, buy and sell positions in there like ETFs or unit trust without worrying about hitting tax deductions.

A tax-free savings account should be untouched money. It should not be your emergency fund or your wedding savings. It should be there for the long-term. If you started investing to the annual limits from the start when they introduced this thing back in 2015, by 2030 you should be hitting the R500,000 lifetime limit. If you have this invested in capital markets, it’s a huge advantage on how much you would be avoiding to pay on tax. The opportunities there are actually endless.

The Finance Ghost: Yeah, absolutely. It’s also why I say even if you can’t do the full amount in a year, do what you can because if you have a windfall next year, you can still only do R36,000 in a tax year. Even if you have the year of your life, you’re going to have to then wait and max it and then the following year max it again. So don’t let a year go by in which you put nothing in. If you can’t do R36,000 then you can’t do R36,000. But even if you can just do R10,000 or R12,000, it’s R1,000 a month, it makes a significant difference.

To your point, there’s a lot you can do around rotating exposure, etc. That’s some of the more advanced concepts and maybe we can chat about a few of those later. That’s certainly something that I very much enjoy doing in my tax-free savings account. It’s something we’ve talked about before and I’ve written about before on various platforms.

I think before we get to that, people need to understand what they can actually buy inside a tax-free account. You’ll sometimes hear people talk about how it’s quite limiting and you can’t go and punt on single stocks. And yes, that’s true. If you want to do some trading, the government is not going to give you a tax-free outcome there. That kind of behaviour is not what they are encouraging here. They are trying to encourage saving and investing, hence the instruments that you can buy are limited, but it also isn’t really limited because you can pretty much buy the entire suite of ETFs or exchange traded funds of which Satrix has a huge range.

I think this is a good opportunity to maybe just open the floor to you to just on a high-level explain what that ETF universe looks like. Because it is so much more than just oh, I’m going to invest in the JSE Top 40.

Siyabulela Nomoyi: Firstly, yeah, I think it’s important to know that an individual can actually open as many tax-free savings account as they want. The only thing you need to keep track of is the annual R36,000 limit. Well, that’s the limit at the moment. If you’ve got those different pockets and different providers, you can actually split that R36,000 and as you mentioned you can actually split that over the year. People do debit orders over the year for this to actually have it add up through the year. You can split that amount amongst your tax-free savings accounts but just be careful on not going over that limit.

Now, the underlying investments here, you could have this in a fixed deposit, you can buy unit trusts under it. Also what you have mentioned, you can buy ETFs and have exposure to them in your tax-free savings account. The longer your investment horizon, or should I say your term of investing, the more you would actually probably want to be bit aggressive in terms of what you want under your tax-free savings account. Also, if you have an investment that you know generates a lot of income, maximizing exposure to them using the tax-free savings accounts is also actually a good idea.

Investors have access to a wide choice of local and international funds covering all risk profiles. Our ETF landscape in South Africa allows investors to choose from quite a lot of options. Just talking about ETFs in general in South Africa, 117 ETFs listed on the JSE, that’s actually more than the tradable universe of stocks on the JSE! That includes the 26 active ETFs recently listed on the stock exchange.

From that, investors have a choice of investing in foreign equity ETFs which have 50% of the entire ETF landscape, while they can also invest in local equities and bonds and whatnot. If you go into the Satrix universe, there’s plenty of choice there. We have about 38 ETFs listed on the JSE out of that 117, so you can have exposure to tracking indices like the MSCI World, the S&P 500, the Nasdaq. Internationally there’s quite a lot of opportunity there in terms of diversification.

Also, you have the choice of investing in our property ETFs if you are looking for yield and generating income, or a divi kind of strategy. The Top 40 that you mentioned, if what you want is beta exposure to the market at a very low cost, then that’s where you’d want to actually be in. Unfortunately, you can’t buy individual stocks. I think you mentioned that. You can’t buy commodity ETFs, the government doesn’t want you to be taking too much risk. As you said, the aim there is to actually encourage people to save and invest.

Those will be your limits in terms of what type of products you can go for. But in terms of investing in ETFs and also unit trusts, there’s quite a lot of variety there. Whether you are just going the Satrix route through our Satrix platform or you go another route from a broker.

The Finance Ghost: I think an important point to raise here is when you’re looking at all these options, just take into account where you’re going to get the best tax benefit. The point of a tax-free savings account – everything you can buy in your tax-free account, you can also buy in a normal account. Because you are limited in your tax-free savings account, let’s assume you have the financial means to invest more than R36,000 rand a year and you’re maximising your tax-free account and you’re doing more than that on top. Great! Now you’ve got to think to yourself, okay, what do I put in my tax-free account versus the rest? And here you need to look at: where am I paying the most tax?

For example, property funds, specifically REITs, they are taxed as income. It’s as though you owned the property and you rented it out to someone yourself, right? You are taxed at your income tax rate. You are not taxed at a capital gains tax rate, you are not taxed at a dividend withholding tax rate, both of which are much lower than an income tax rate. On a property fund you’re going to pay a lot more tax. In fact, you’re going to pay – I think it’s probably the highest. Even if you go and buy government bonds and you earn interest, everyone still gets a certain amount of interest free every year. But you don’t get any allowance for, hey, I got some REIT dividends, so I think that’s effectively your biggest tax burden. If you like property funds and property funds are something you want to own long-term, then that’s a really smart inclusion in a tax-free savings account because there are some very good property ETFs available.

As I say, those property distributions then are tax free. Remember, REITs themselves basically don’t really pay tax. What’s happening is you are then turning yourself into a little pension fund, right? You’re saying, I’m going to go and invest in these REITs, they don’t really pay tax, I’m not paying tax in my tax-free savings account. There’s zero leakage. It’s the same life that pension funds enjoy when they don’t pay tax. That’s why pension funds love investing in property funds so much.

So, that’s quite a favourite of mine. It just shows the value of the tax-free savings account. It’s in the name, it’s the “tax-free” piece. So, make sure you understand that stuff and think about where you’re going to put your money accordingly, right?

Siyabulela Nomoyi: 100% Ghost. I think the other part that I would mention is that when it comes to long-term investing, when you think about your kids, you think about the investment horizon or the time that you would want them to have an investment account. If you are saving or investing for your child to be at university and they’re still quite small, that’s quite a lot of years to actually be invested. You want to be investing in a product where the capital gains that you’ll be realizing in 15 years’ time, they’re all coming to you. You don’t want to be having this investment that has grown quite a lot over the years and then suddenly when you want to actually disinvest, you have all these tax payouts that you actually need to take care of.

I think the other part of that, outside the income part, is also just the underlying products that you consider and would like to actually hold for the long term where you don’t want to be taxed on your realized gains. I think that’s also very important for investors as well.

But definitely the part which I also consider as well is the REITs, the property funds, where there’s yield, that part where you get taxed more. You need to consider that.

The Finance Ghost: Yeah. I want to touch on this concept of how a tax-free account kind of becomes this beautiful little walled garden of money. You build it up every year, you put your R36,000 in or whatever it is that you can do, or if they ever actually increase that limit, we can only hope, then you’re building up over time.

This actually becomes quite a meaningful amount of money a few years down the line because remember, it’s growing as well. That R36,000 a year is your contribution limit. Obviously the great hope is that it’s growing in the background, it’s compounding all the time, so it can actually become quite a chunk of money over time.

That goes back to that point about how you can then rotate exposures. If you have made a lot of money, say on the US market through the S&P 500 or the Nasdaq-100, and let’s say valuations have gotten to a point where you’re now feeling quite uncomfortable, but you really like what’s going on in South African property, you like where we are in the cycle, you can now rotate exposure. This is a very real-world example because it’s exactly what I did. You can now rotate exposure, reduce some of your US exposure, jump into SA property, all doing this via ETFs and there’s zero tax leakage along the way.

Now I know that this can be done through a brokerage account, but the question I wanted to ask you is: on the SatrixNOW platform, which is another way to invest in ETFs, does it also allow for the buying and selling of ETFs within a tax-free savings account? What sort of functionality does the platform have in that regard?

Siyabulela Nomoyi: Sure. Thanks, Ghost. The SatrixNOW platform certainly allows for that. The platform allows investors to open under their name a standard direct investment account. They can open a retirement annuity and a tax-free savings account. You have that under your profile and have these different tabs that you can actually go and switch between. Once you’re in, you can choose from what I call the Satrix universe of products. You switch between ETFs in the platform, as you mentioned, so you can gain exposure to for instance, your Satrix Top 40 ETF.

Then if there is a point where you want to rebalance against your portfolio and want to buy property, the Satrix property ETF or the unit trust, or you want the international route where you want exposure into the Nasdaq or our infrastructure ETFs, you can actually do that inside the platform. I don’t like talking about withdrawals, but that’s also there as well as part of the platform. If you have been investing with us for quite a number of years, you want to withdraw money from your investments, you can certainly do that. You can also deposit, you can arrange for debit orders on the platform where you can actually split your debit order, whether you want to buy into one individual ETF or you want to split your debit order between different products, you can do that. So if you want, with your debit order, you can have that directly investing in one product as your product of choice or you can split it, have 50% in setting a certain ETF or unit trust. You can set that up in the platform.

As I mentioned, you can switch between ETFs on the platform. You can deposit, you can withdraw money from the SatrixNOW platform. The reason why I’m saying I don’t encourage withdrawals or I don’t like talking about that – I mean, there’s something about opening the platform and watching your money grow. It doesn’t have to be on a daily basis. That’s where a lot of investors actually start panicking. When you refresh your platform every day, you’re looking at your returns on a daily basis. If you’re investing for the long term, you don’t want to be doing that. You can check and see if your views, I guess, on what you invested still match with what you have as an exposure on your portfolios, but it’s always good to actually just go and check what your returns are in the platform.

You can download statements. But of course, the other advantage if you are in the SatrixNOW platform is that there are no minimums to investing. You can literally buy an ETF with your last R10. You can deposit the money to the platform and you can just buy a fractional share of the ETFs.

You can also get access to it through the SatrixNOW app. You can download that from your app store and you get exactly the same stuff that you see on the website on the platform. You log in there, you just check on your investments, you can switch between the products or on the app as well and also you can switch between the products inside. Let’s say if you want to disinvest money from your direct investing product and you want that money to go into your tax-free savings account, you can do that in the platform. I’ve seen people who actually get dividends from direct investments and then they want to take those dividends and invest them into topping up their tax-free savings account. You can actually switch between those platforms. You get everything there. The only thing that you can actually trade in the platform is the Satrix universe. All the unit trusts, all the ETFs that you can invest in Satrix, they are all in there.

The last part I wanted to mention is that you can also buy vouchers to gift people, which is I think the quite cool and unique way of gifting. You can buy a voucher, let’s say for R2,000, you can allocate to someone and then they can actually start the investment journey, which is, I think it’s a great way of starting or a great way to actually gift someone.

The Finance Ghost: Yeah, absolutely. All of these are really important points and I think the debit order can be really powerful. South Africa doesn’t have a budget right now, but you certainly should as a listener to this podcast! That means that if you understand how much you can save every month, if you set it up as a debit order, you can actually get to your limit every year just with a monthly debit order. It’s happening consistently in the background and you’re just managing your month-to-month expenses and in the background you’re busy saving.

That works really, really well for someone who’s maybe not watching the market all the time and trying to pick exactly what they’re doing. To your point here, sometimes that behaviour is really not a good way to create wealth over the long term. People look at this the wrong way.

I think speaking of the ways to do it, maybe as we bring this podcast to a close, I think it might be quite fun to talk about how we each use our tax-free savings account. To the extent you are willing to share, what are some of the ETFs that you have in yours? Is it a bit of a mix between local and offshore? What do you look at?

Siyabulela Nomoyi: Yeah, so currently it’s actually quite concentrated on what we spoke about and that’s going to be the Satrix Property ETF. I feel like the SA equity valuations are cheaper when you compare them to offshore, so I also have a big exposure into our Satrix Capped All-Share ETF in the tax-free savings account. This is for the long term because this is definitely money that I don’t actually touch. But also as I mentioned when we were starting the podcast, sometimes you want to be more aggressive, especially if you’re looking over the long term. Certainly the Satrix Resi ETF is one of the ETFs that I hold and quite a big chunk of it because some of these miners are also still paying dividends. They made up quite a lot of the divi strategy, which means they do actually pay quite a lot of dividends, but they’ve been battling quite a lot. I’ve been buying up some Resi exposure in the last period to actually have that turnaround in that ETF. It’s one of my favourites anyway, if you look at it over the long term as well.

Then just exposure to the US market, I mean the valuations are quite high. I’ve reduced my exposure there and I think I’ve taken my gains there. As you mentioned with the rotation part, I think I’ve done my part there, but I still do have a bit of exposure just to follow what the sentiment is in the US markets.

The Finance Ghost: So yeah, in terms of what’s in my portfolio, I’ve got the Satrix S&P 500 ETF. That’s quite a big exposure for me. So obviously that’s giving me the offshore exposure. Then there’s a Satrix Property ETF as well, and as mentioned earlier, I really like the fact that I get the REIT distributions tax free. That’s been nice for me. There, when you’re looking at the performance in your portfolio, you have to be careful because it’s going to show you, I guess depending which platform you use, it’s going to show you the capital growth. But a big part of why you would invest in property is because you’re earning dividends and those would then land in the cash portion of your account. They won’t necessarily show as a gain on that position, but in reality your total return on that position should include the dividend. So that’s just an important nuance.

Similarly, I think you’ll be proud of me here – a bond ETF! We’ve done some fixed income ETFs before, Siya, I see you nodding there happily. Kind of a similar vibe, I guess, in terms of earning interest, so there’s a tax benefit there. Yes, I made the point earlier around getting an annual amount of interest tax free, but once you go above that then you’re no worse off whether you’re earning interest in your tax-free savings account or a REIT distribution. So that’s just quite interesting diversification.

I’ve got some other stuff in there as well. Obviously, there’s a wide world of ETFs out there, but I think what’s great about Satrix is you have a really good mix of products. You have the ability for people to pretty much express a view on almost anything.

Here we are at the end of February. We’re going to get this podcast out before the end of the month. And if you haven’t maximised your tax-free savings, then just try your best to get it in there. If you can’t do anything about it still this tax year, then at least plan for the coming year to try and do as best as you can with your tax-free savings account. It really is the starting point, in my opinion, for anyone. If you’re interested in shares or whatever, that’s where you start. Until you’ve maxxed out your tax-free savings account, I genuinely don’t think that anyone should be dabbling in single stocks. Go and get the market exposure, go and start buying those ETFs and learn about how the markets work. That’s very much my view. It’s the approach that I’ve taken with my money. It’s the approach that when friends and family ask me for an opinion, it’s the same opinion that I give them. That’s just my approach, Siya. I’m really grateful that you could join me on this show to unpack why these tax-free investments are so valuable.

Siyabulela Nomoyi: Awesome, Ghost. Thanks so much for inviting me. It’s been a great topic to go through.

The Finance Ghost: I think just to finish off for those who are interested in SatrixNOW and want to go and find out more and invest that way, what is the website that they can go and visit?

Siyabulela Nomoyi: Yeah, so they can go to satrix.co.za. Obviously that website will show them the info about what Satrix is about, but there’s also a tab where they can actually register or log in to our SatrixNOW platform. They can go directly to the SatrixNOW platform if they search for it or they can go to the website, they can register. It’s quite quick these days.

Back in the day when you register on these platforms you have to wait for FICA documents to actually run. So now it’s all running in the background. You can register now and within a day or so you’re ready to actually invest and deposit your money.

They can go on that website. As I mentioned, the other alternative is download the SatrixNOW app on their app stores and also just log in there.

The Finance Ghost: Absolutely. Nice and easy and well worth it. So to the listeners, if you’re not already busy with a tax-free savings account, go and check it out, do the research. And Siya, maybe one of the next shows we should do is about how to read the fact sheets of these exchange traded funds, these ETFs so people can understand what the options are to look at.

But I think that’s a great topic for another show and we’ll do one of those soon. This one was very much about these tax-free investment accounts. So thank you for joining me for that. And to the listeners, as I keep saying, go and check this out. You really are leaving money on the table if you’re not taking advantage of this.

Siya, thanks. I look forward to having you back.

Siyabulela Nomoyi: Awesome man. Thanks. Cheers.

*Satrix is a division of Sanlam Investment Management.

Disclaimer:

Satrix Investments (Pty) Ltd is an approved financial service provider in terms of the Financial Advisory and Intermediary Services Act, No 37 of 2002 (“FAIS”). Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities. The information above does not constitute financial advice in term of FAIS. Consult your financial advisor before making an investment decision. Collective investment schemes are generally medium to long-term investments. In Unit Trusts and ETFs the investor essentially owns a ‘proportionate share’ (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With unit trusts, the investor holds participatory units issued by the fund, while in the case of an ETF, the participatory interest, while issued by the fund, is made up of a listed security traded on the stock exchange. ETFs are index-tracking funds, registered as a Collective Investment, and can be traded by any stockbroker on the stock exchange or via investment plans and online trading platforms. ETFs may incur additional costs due to being listed on the JSE. Past performance is not necessarily a guide to future performance and the value of investments/units may go up or down. A schedule of fees and charges, and maximum commissions are available on the Minimum Disclosure Document (fund fact sheet) or upon request from the manager. Collective Investments are traded at ruling prices and can engage in borrowing and scrip lending. Should the respective portfolio engage in scrip lending, the utility percentage and related counterparties can be viewed on the ETF Minimum Disclosure Document. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The index, the applicable tracking error, and the portfolio performance relative to the index can be viewed on the ETF Minimum Disclosure Document and/or on the Satrix website. A feeder fund is a portfolio that invests in a single portfolio of a collective investment scheme, which levies its own charges and which could result in a higher fee structure for the feeder fund. International investments or investments in foreign securities could be accompanied by additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information. A money market portfolio is not a bank deposit account. The price is targeted at a constant value. The total return to the investor is made up of interest received and any gain or loss made on any particular instrument and in most cases the return will merely have the effect of increasing or decreasing the daily yield, but that in the case of abnormal losses it can have the effect of reducing the capital value of the portfolio. Excessive withdrawals from the portfolio may place the portfolio under liquidity pressures and in such circumstances a process of ring-fencing of withdrawal instructions and managed pay-outs over time may be followed. Seven day rolling yield is calculated by taking into account the interest earned by the fund during a 7 day period minus any management fees incurred during those seven days. Income funds derive their income primarily from interest-bearing instruments. The yield is a current and is calculated on a daily basis.  Tax Free Savings Accounts: Annual limit of R36000, lifetime limit of R500 000, 40% tax penalty applicable for contributions above the limit, per individual. Past performance is not necessarily a guide to future performance and the value of investments / units may go up or down.

For more information, visit https://satrix.co.za/products