Tax Time! Well Tax Refund Time for me! Did you know that the average Australian gets a tax refund of around $2,500 each year? Most people spend this refund immediately or use it to help pay off debt and spend up again. Whilst this can be good for the economy, it isn’t great for our finances or our goals. As tempted as I was to buy something for myself, I used all willpower and immediately transferred this into my share trading account and invested the $2,000 tax return.
In reviewing the diversification of my portfolio, I decided it was time (well overdue) to add some Asian equity exposure. Whilst I love Australian shares, when it comes to investing internationally, I am out of my depth and would rather hand over the investment making decisions and currency management to an expert. I invested the $2,000 into VAE, the Vanguard Asian Ex-Japan ETF. Whilst I already have some Asian exposure to this market via my International ETFs, I wanted to increase my asset allocation to this particular market and intend to add more again soon for future capital growth opportunities.
As this ETF is more of a capital growth based ETF rather than an income producing one, it works well with my exisiting diversification. However the estimated yield is 2.50% p.a. which means my estimated passive income is now $4,270 p.a. So only a small step up in estimated passive income, but this should grow overtime. Stay tuned, more Asian equity exposure coming!
Canna Campbell is the founder and director of SASS Financial Services, a boutique financial planning firm. She is a Channel 9 Financial Commentator, founder of financial media platform SugarMamma.TV and best selling author of The $1000 Project and Mindful Money.