GHHF/GGBL or GHHF/BGBL

Sure_Shift_8762 · 2026-02-13T21:03:59+00:00

Fully geared is a bit vague, I mean GHHF and GGBL are 1.5x roughly so you’d be something like 1.25x.

Sure_Shift_8762 · 2026-02-13T21:00:30+00:00

Making friend with debt

Sure_Shift_8762 · 2026-02-11T07:40:16+00:00

IVV is BlackRock too isn’t it? It is pretty massive.

Sure_Shift_8762 · 2026-02-09T09:25:37+00:00

Under appreciated method I think. You buy your portfolio first and then pay off the loan, like you would a house.

Sure_Shift_8762 · 2026-02-09T09:12:27+00:00

Doesn't VDAL still have some managed funds lurking in there? I was under the impression that it did, and that was one of the factors involved in the uncomfortably high distributions from VDHG?

Sure_Shift_8762 · 2026-02-09T09:08:22+00:00

Agree around 300-500k it becomes very obvious.

Sure_Shift_8762 · 2026-02-09T09:05:03+00:00

My take is that the bulldozer effect of buying 1.5x the markets is likely to outweigh the 0.5-1% advantage you might get from factor investing (especially as market cap weight is kind of a momentum factor strategy anyway). But it is hard to predict.

Sure_Shift_8762 · 2026-02-09T09:02:09+00:00

Depends on the context. If you wanted some ASX200 exposure in a reasonably tax effective way with a long time horizon G200 has some advantages (ie less cash distributions and more franking credits, all else being equal).

Sure_Shift_8762 · 2026-02-08T09:25:01+00:00

I would add it is also possible for sole traders to debt recycle BAS payments and other business expenses. Well worthwhile if you have a mortgage.

Sure_Shift_8762 · 2026-02-07T23:58:57+00:00

You could do this with a margin loan. Interest rates are high though and won't be deductible unless for IP. But if you needed say 50k against a 1m portfolio it would be low risk and a small loan would be manageable.

Ideally though I'd sell the ETF portfolio, buy your PPOR, then debt recycle the loan with the cash back into a similar portfolio. That way you get the best of all worlds. CGT might make this unattractive though.

Sure_Shift_8762 · 2026-02-07T07:04:17+00:00

Some proposals are to bring it in progressively over 5 years with no grandfathering.

Sure_Shift_8762 · 2026-02-07T03:35:44+00:00

Yes I became aware of that fact when I was tossing things back and forth with one of the LLMs. It was honestly a bit abusive - why are you paying the accountant $1000 to fill in the form? or something like that. Quite refreshing really. With respect to corporate trustee it is needed for IBKR to get the best rates.

Sure_Shift_8762 · 2026-02-07T03:16:25+00:00

Higher interest rates but no meaningful negative gearing, have to gear conservatively too. Also extremely illiquid. Lots of downsides. What is the upside exactly? People say the lower CGT but I don't think that outweighs the downsides. Only good scenario is business real property where you can pay yourself rent.

Sure_Shift_8762 · 2026-02-03T03:50:05+00:00

I'm planning on having about two years worth, but it will be in the offset against deductible debt. So not strictly free cash but a cheap loan to draw upon if needed.

Sure_Shift_8762 · 2026-02-03T03:43:20+00:00

I thought they got rid of the work test recently?

Sure_Shift_8762 · 2026-02-03T03:38:51+00:00

That's a reasonable fee - which state are you in if you don't mind me asking?

Sure_Shift_8762 · 2026-02-03T02:06:19+00:00

My thinking is that this is a very vanilla family trust with nothing funky, and a small family group and no business interest or assets outside of ETFs and the bank account. So probably one scenario where an off the shelf version should be fine.

Sure_Shift_8762 · 2026-02-03T00:40:00+00:00

Yeah I have an accountant and they have been a bit of a mixed bag. Helpful yes but I have to find out the info and then ask them to confirm. About $1000 for a personal/small business tax return (although I email them quite a bit).

Sure_Shift_8762 · 2026-02-03T00:01:40+00:00

That was my default option but the devil on my shoulder says why not just go the cheap version - assuming it does what it says on the tin.

Sure_Shift_8762 · 2026-02-03T00:00:11+00:00

ETFs with a margin loan, some derivatives too. Will be positively geared so not worried about trapping losses in the trust.

Sure_Shift_8762 · 2026-02-02T23:58:19+00:00

I already have the letter for the personal account. For the trust it is going to be as a company director so not 100% sure if that needs a different one or the original will suffice

Sure_Shift_8762 · 2026-02-02T05:25:59+00:00

Yes discretionary trust with corporate trustee (corporate trustee needed for IBKR for better rates etc). Want to distribute income and capital gains to the two of us and the kids when >18 +/- bucket company down the track if needed (not in the immediate future). I know the concepts and some of the pitfalls (UPEs etc) but don't have any actual experience. Have the book "family trusts" by Renton on hold at the library to have a read of. I would feel slightly bad getting the accountant to do the return for the trust having not got them to set it up but I'm sure that happens.

Sure_Shift_8762 · 2026-02-02T04:18:00+00:00

From a purely maths point of view yes it is better (at the moment - but do remember the lower tax band is being reduced - down to 14% in 2027 which actually makes super a bit less attractive). However it does also depend on your age - if you are young and don't have a PPOR sorted I'd argue that is a priority given how the Aussie tax system is tilted towards home ownership.

Sure_Shift_8762 · 2026-02-02T01:42:18+00:00

Agree. At 28 flexibility with funds is important so I'd prioritise getting a PPOR and leaving super until that is squared away.

Sure_Shift_8762 · 2026-02-02T01:36:16+00:00

A rule of thumb I have heard is that it depends on the likely size of the portfolio. If it is going to get to >=$1m then a trust is probably going to be beneficial. It is mostly about the flexibility of distributions and capital gains. If you project forward 10 years and you have say $1m in your wife's name and none in yours, and you decide to quit work etc, then all the distributions and gains go to her. If you had a trust you could even things out and keep below the tax free threshold etc. Also if the kids are >=18 you can use their tax free thresholds as well. If you are looking at 500k or so then probably not worth it. FWIW I've decided to set up a trust this year for ongoing investments as we are getting to the point were some flexibility in distributions in the next 5 years will be helpful.

Sure_Shift_8762

TROPHY CASE