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Speaker 1: Hello and welcome to The Australian's Money Puzzle podcast. I'm

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Speaker 1: James Kirkby. Welcome aboard everybody, and happy New Year. Sincere

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Speaker 1: wish that you have a good new year and a

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Speaker 1: prosperous new year. I hope, and we're here to ensure

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Speaker 1: that happens for you. Something we've been doing, you know,

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Speaker 1: on the show at the start of the year, which

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Speaker 1: proves very popular with all listeners, is opening with a

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Speaker 1: series of shows that layout the conditions and predictions for

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Speaker 1: investment markets. And we don't you know, for a moment,

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Speaker 1: we don't believe that anyone knows the future. But I

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Speaker 1: have come to realize it is very important actually as

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Speaker 1: an investor to know what market expects you think about.

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Speaker 1: This time last year, a show very clearly talked about

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Speaker 1: AI and talked about gold and they were very clearly

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Speaker 1: rewarded as investment themes. Okay, so we'll take it step

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Speaker 1: by step and today we're going to look at the

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Speaker 1: big picture and start with a helicopter view of investment

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Speaker 1: markets with Mark jocom the investment strategist at Global X.

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Speaker 1: He's terrific at this. The show he did for us

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Speaker 1: at the start of last year was proved to be

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Speaker 1: terribly popular and I thought it made perfect sense to

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Speaker 1: return to Mark later in the week. So we'll look

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Speaker 1: at the individual stocks, right, so what are people thinking

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Speaker 1: in the market about individual stocks? And we'll have June

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Speaker 1: be Lu with us on that. Then we'll take a

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Speaker 1: look at property with Stuart Weams, and then we'll put

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Speaker 1: it all together with Will Hamilton and we look at

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Speaker 1: the overall overarching picture for you. I think I'll give

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Speaker 1: you a very good start to the year. And to

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Speaker 1: kick things off, I'd like to welcome Mark to come

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Speaker 1: back to the show. How are you Mark?

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Speaker 2: Very good, James, thanks for the kind introduction, great to

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Speaker 2: be back, Happy year and looking forward to our discussion.

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Speaker 1: Happy new Year to you. As like did that pream

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Speaker 1: but it struck me. You know, it's a fairly ambitious

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Speaker 1: It's a fairly ambitious agenda that we put in front

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Speaker 1: of you to tell us what's going to happen in

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Speaker 1: all investment markets around the world in the year ahead.

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Speaker 1: But that's your job, right, that is your job, and

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Speaker 1: so you are particularly well qualified to do so I

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Speaker 1: think what we try and do, I think first of all,

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Speaker 1: we'll just take a look I think for most people,

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Speaker 1: we would assume, right, would assume that they did well

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Speaker 1: last year, particularly if they had international aspects in their portfolio,

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Speaker 1: and more and more people have every year, and every

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Speaker 1: year it becomes more rewarding. So the US has outpaced

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Speaker 1: our market again and again every year, and it happened

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Speaker 1: in twenty twenty five. I presume, certainly looking at the outlook,

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Speaker 1: the formal outlooks, that we expect that might happen again

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Speaker 1: this year. But let's have a quickly look back. Basically,

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Speaker 1: we did the US market, as I say, it did

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Speaker 1: much better, and now looking at why that was a

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Speaker 1: lot to do with the power of the US market.

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Speaker 1: It is now something like approaching up to seventy percent

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Speaker 1: of all markets. So you'll find in today's show when

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Speaker 1: we talk about what we think is going to happen,

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Speaker 1: what the market thinks is going to happen, a lot

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Speaker 1: of it implicitly means what is expected in the US

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Speaker 1: and what US policies may may trigger in other markets

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Speaker 1: like our own. So Mark just give us an In

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Speaker 1: my reading of it, so far, it looks to me

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Speaker 1: like the consensus forecasts, such as they are for Australian

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Speaker 1: shares in the year ahead is something in the order

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Speaker 1: of six percent. In the US it's something in the

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Speaker 1: order of nine percent plus, suggesting again that US shares

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Speaker 1: will outpace Australia shares. Is that what's your house view

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Speaker 1: on that first art.

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Speaker 2: It's a great start to look for from the top down, James,

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Speaker 2: and what you are seeing is the expectations are for

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Speaker 2: this idea of going beyond borders, going beyond Australia, and

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Speaker 2: even maybe considering going beyond the US as well, which

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Speaker 2: we can get into a little bit later looking at

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Speaker 2: other regions as well. As you mentioned, the Australian market

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Speaker 2: did propel higher last year, up around eleven percent. A

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Speaker 2: lot of that was driven by the multiples or what

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Speaker 2: people are willing to pay for the Australian equity market

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Speaker 2: as opposed to meaningful earnings growth. And I think that's

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Speaker 2: going to be the real key for investors to focus

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Speaker 2: on this year, is which companies are going to drive

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Speaker 2: the most in terms of earnings. And I still see

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Speaker 2: the US as being a place for investors to park

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Speaker 2: some of their capital because the US is expecting double

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Speaker 2: digit growth and when you're looking at some sectors that

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Speaker 2: are expecting you know, at least thirteen percent earnings growth,

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Speaker 2: there could be potential for the US market. And I

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Speaker 2: look at the S and P five hundred with the

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Speaker 2: median forecast looking at around about that seventy five hundred mark,

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Speaker 2: and we're currently just shy of seven thousand, So there

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Speaker 2: is that potential upside. Again, most markets generally get around

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Speaker 2: ten to twelve percent per year in terms of the

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Speaker 2: US market, whereas in Australia it might be a little

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Speaker 2: bit more muted. We still are seeing that some forecasts

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Speaker 2: are saying that the Australian market can probably do s

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Speaker 2: digits this year, so mid single digits in terms of

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Speaker 2: price gains, but a lot of that will probably be

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Speaker 2: driven by a income And at the moment, the income

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Speaker 2: is incredibly low here in Australia. It's one of the

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Speaker 2: lowest it's been in multiple years at just north of

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Speaker 2: three percent. The multiple is really expensive at the moment

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Speaker 2: for the Australian market, it's one of the most expensive.

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Speaker 2: It has been propped up by a lot of financials

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Speaker 2: in terms of the banks being the most expensive in

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Speaker 2: the world. And then what we do see is on

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Speaker 2: the earnings growth there may be a bit of a

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Speaker 2: changing of the guard with a lot of the material

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Speaker 2: companies starting to do the heavy lifting versus the banks.

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Speaker 2: So overall we're still very constructive on equities. But I

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Speaker 2: do think go global, go broad, and go beyond board

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Speaker 2: is going to be the key theme for twenty twenty six.

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Speaker 1: So just give listen to something to hang on to,

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Speaker 1: and folks, these are our forecast right, and they can

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Speaker 1: be blown out the window today. It just depends on

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Speaker 1: what happens, right, but all things considered. Best minds in

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Speaker 1: the business. I've suggested to us that the US markets

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Speaker 1: marketers to repeat your thinking. The talk is something in

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Speaker 1: the order of thirteen percent. That's a total return.

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Speaker 2: Yeah, so that's looking at the earnings growth overall of

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Speaker 2: a thirteen percent, But if you actually look into what

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Speaker 2: some of the forecasts are suggesting, you're probably looking for

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Speaker 2: a return of around about ten percent in terms of

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Speaker 2: what most people are forecasting. So that could imply that

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Speaker 2: we might see a bit more broadening in the market.

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Speaker 2: We still think that AI trade is going to be there.

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Speaker 2: I know there's been talks of an AI bubble, but

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Speaker 2: these companies are generating meaningful earnings growth and we can

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Speaker 2: dive into that whole bubble narrative.

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Speaker 1: So this is a concept of that the US share

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Speaker 1: market would return something in the order I said nine

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Speaker 1: at thetime, So maybe ten is I said nine plus

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Speaker 1: ten percent or so that's a total return. Dividends don't matter,

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Speaker 1: an awful lot of the US representing one and a

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Speaker 1: half percent something of the return. And you're just hinting

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Speaker 1: there already that it may be broadened by that, you

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Speaker 1: mean not just the big tech stocks, but the broader

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Speaker 1: US market, the traditional heavyweights you'd be like of the

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Speaker 1: US market and also beyond the US market. Okay, and

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Speaker 1: then in our horror market. You're thinking that at least

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Speaker 1: you're working on forecasts which suggest when you said, I

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Speaker 1: think you said middle digits. So let's just see that

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Speaker 1: if we did five to six percent and we had

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Speaker 1: dividends of three, then we're talking about a return of

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Speaker 1: something in the order of it or Now this is

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Speaker 1: the kind of working model that we're looking at for

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Speaker 1: our hallmarket. The ASEX.

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Speaker 2: Yeah, that's right, James, and I think most of the

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Speaker 2: Australian investors are looking to see, you know, can we

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Speaker 2: reach that nine thousand mark in terms of the ASEX

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Speaker 2: two hundred if the market's only pricing in you know

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Speaker 2: that mid single digits, whereas you're looking at about four

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Speaker 2: to five percent returns. You do have to question where's

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Speaker 2: it going to come from. Is the valuation is going

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Speaker 2: to continue to be propelled up or is the Australian

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Speaker 2: market going to deal with some pretty solid earnings growth.

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Speaker 2: And we do face a bit of a challenging backdrop

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Speaker 2: in terms of potential interest rate rises, and that's different

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Speaker 2: to a lot of the other markets in the world.

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Speaker 2: The consumer is quite fragile at the moment, counts to

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Speaker 2: sixty percent of GDP. So it's not shaping up as

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Speaker 2: a boom year, I would say for Australian shares, but

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Speaker 2: it's not a collapse ate either. I think investors in

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Speaker 2: Australia are probably going to be a bit more selective

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Speaker 2: and more modest to how they want to frame the

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Speaker 2: Australian equities allocation.

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Speaker 1: Okay, it's not very it's not very encouraged. I mean

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Speaker 1: sitting here knowing that the US market returns more than

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Speaker 1: the Australian market for a year after year pick period

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Speaker 1: the last ten years, beyond doubt, and knowing that it

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Speaker 1: will outpace. It's knowing that the forecast suggests that it

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Speaker 1: will outpiace US and knowing that our big trump card

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Speaker 1: is dividend yield, but that the dividend yield is actually shrinking, right,

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Speaker 1: So it used to be like four and fast four

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Speaker 1: and a half percent, and you're saying it's now closer

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Speaker 1: to three. Is that right?

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Speaker 2: Yep, mid three percent if you include a little bit

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Speaker 2: of franking credits, around four percent. But that's the lowest

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Speaker 2: level we've seen if you go past COVID in probably

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Speaker 2: the last you know, ten to fifteen years, James. So

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Speaker 2: the problem with the valuations being propped up with the

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Speaker 2: Australian market is dividends just haven't kept our pace. And

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Speaker 2: when you talk about, oh, you know, why is it Australia,

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Speaker 2: you know underperforming the US market? Again, it comes down

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Speaker 2: to earnings growth. The Australian market has only grown earnings

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Speaker 2: around about three to four percent per year over the

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Speaker 2: last fifteen to twenty years, whereas the US has done

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Speaker 2: double digits eleven to twelve percent per year, and long

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Speaker 2: term share prices follow earnings growth, and that's the key

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Speaker 2: when it comes to investing, and.

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Speaker 1: The earnings growth of the big US markets is really

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Speaker 1: the current of the confidence we're seeing at this time

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Speaker 1: of the year so far exact to see.

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Speaker 2: It is and a lot of these companies continue to

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Speaker 2: hit the lights out. I mean even I sometimes like James,

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Speaker 2: how can these companies continue to be earnings And we're

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Speaker 2: about to start the earning season now for Q four

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Speaker 2: of twenty twenty five, all eyes are going to be

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Speaker 2: you know, they've invested a lot of money in their

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Speaker 2: capital expenditure. Everyone is betting on the AI trade. Now

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Speaker 2: it's going to be about who can actually be rewarded

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Speaker 2: for that return on investment. And if these US megacap

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Speaker 2: tech companies and these market dialings called the Magnificent Magnificent

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Speaker 2: seven continue to do that, well, then yeah, the US

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Speaker 2: market is not overvalued because these companies continue to deliver

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Speaker 2: very different to the Nasdaq back in the dot com

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Speaker 2: boom when it was trading at sixty or seventy times

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Speaker 2: price to earnings ratio and they weren't generating a lot

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Speaker 2: of meaningful earnings growth.

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Speaker 3: So very different Now.

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Speaker 2: I think it's actually a really exciting time to be

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Speaker 2: investor dealing with one of the most transformational technologies in

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Speaker 2: my opinion that we're probably going to see this millennium.

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Speaker 1: So in terms of the talking about basics for listeners,

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Speaker 1: in terms of setting the big picture of what's going

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Speaker 1: on in the market and the conditions in which these

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Speaker 1: forecasts are being made. The PE then in the Australian

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Speaker 1: market against the PE in the US market, that is

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Speaker 1: the price earnings ratio FORKS, which is still very much

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Speaker 1: the nearest thing you can get to a pretty decent

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Speaker 1: benchmark in terms of the value offered by the earnings

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Speaker 1: offered by these companies. How do they compare?

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Speaker 2: So when you look at it on a just an

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Speaker 2: absolute number alone, the US is trading a little bit

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Speaker 2: more expensively than Australia. That being said, you have to

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Speaker 2: normalize it for earnings growth. So when we talk about

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Speaker 2: price to earnings ratio, as you mentioned, James, that's pretty

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Speaker 2: much essentially what I investor is willing to pay for

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Speaker 2: one dollar of earnings that is generated from the share market.

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Speaker 2: And historically in Australia it's normally around about their fourteen

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Speaker 2: or fifteen times earnings. Now we're getting close to about

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Speaker 2: twenty times, so it's definitely one of the most expensive

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Speaker 2: we've seen in a long time time. It's in its

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Speaker 2: top percentile, and then when you normalize it for earnings growth, again,

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Speaker 2: it doesn't look that attractive, whereas the US, yes, and

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Speaker 2: maybe trading in the mid twenty so you're looking at

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Speaker 2: twenty two, twenty three or twenty four times earnings, but

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Speaker 2: it is normalized from these fantastic earnings growth, which is

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Speaker 2: why companies are like, you know what, if I can

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Speaker 2: deliver fifteen to twenty percent earnings growth per year, you

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Speaker 2: know what, maybe I'm actually quite comfortable paying twenty five

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Speaker 2: percent earnings as twenty five times earnings, particularly if they

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Speaker 2: are meaningfully generating the bottom line profit, which is what

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Speaker 2: investors always want. So while some stocks may look a

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Speaker 2: little bit frothy in the market, overall, I don't see

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Speaker 2: this as being a armageddonist type thing where there's going

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Speaker 2: to be huge collapse it We're still pretty mid cycle

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Speaker 2: at the moment. Doesn't look like a horizon is on

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Speaker 2: the cards for a session. That being said, you know,

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Speaker 2: markets can throw surprises, and we've already seen that so

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Speaker 2: far this year with what's happening in the US.

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Speaker 1: Exactly, and I'm going to talk to that about that

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Speaker 1: in one moment. But so if we look at it

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Speaker 1: on paper, folks, it would seem an ideal market in

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Speaker 1: many ways for the investor. We've had very good years overseas,

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Speaker 1: particularly in the US, so we've had reasonable years in

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Speaker 1: the local market. On the AX, the driver of all

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Speaker 1: world markets is the US something like sixty six percent

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Speaker 1: of the Morgan Standing Capital International Index now, and it

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Speaker 1: has ideal conditions in many ways. It has a republican

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Speaker 1: pro business government which is deregulatory and unleashing a lot

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Speaker 1: of energy into the markets. It has if a wonderful

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Speaker 1: I suppose technology breakthrough innovation driven boom happening with AI,

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Speaker 1: and innovation driven booms are much more convincing than booms

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Speaker 1: that are based on whatever something is just sheer momentum.

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Speaker 1: So there is a sort of logic, there is palpable

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Speaker 1: change driving the markets because we've all used AI. We

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Speaker 1: all use AI in various ways. I use AI all

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Speaker 1: day long, and it's in terms of productivity. You don't

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Speaker 1: have to be genius to figure out that the productivity

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Speaker 1: will translate to profits. And in that ideal environment, which

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Speaker 1: is a you know, which is a pro business environment

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Speaker 1: in the US. That's the good news. The bad news

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Speaker 1: is that it is an exceptionally unclear political agenda where

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Speaker 1: this market is operating. So since we since the start,

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Speaker 1: this is extraordinary, since the start of the year, and

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Speaker 1: we're coming to you on January the thirteenth. Okay, so

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Speaker 1: it's early days. Most people aren't even back from holidays.

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Speaker 1: I think probably the most significant thing, unfortunately for markets,

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Speaker 1: it's not actually the overseas it's not immediately the overseas

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Speaker 1: activities by the US, but the domestic activities. The intimidation

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Speaker 1: of the Federal Reserve chair and the subpoena overnight in

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Speaker 1: the US on a criminal investigation to the chair of

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Speaker 1: the Federal Reserve. That is chilling stuff for investors who

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Speaker 1: have grown up and stayed in the markets and assumed

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Speaker 1: certain assumed certainties which are now under challenge. Beyond that,

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Speaker 1: there is also an extraordinary reversal of US foreign policy,

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Speaker 1: where we've been told to be like or led to

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Speaker 1: believe since the start of the Trump administration. Trump won

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Speaker 1: that they were accepted by that US exceptionalism and that

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Speaker 1: they were no longer interested in being actively so actively

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Speaker 1: involved in foreign affairs and in foreign nations. And since

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Speaker 1: again since Christmas, they have actually there has been an

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Speaker 1: invasion of a foreign state and the kidnapping of the

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Speaker 1: head of state Venezuela. There's been strikes with allies in Syria,

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Speaker 1: there's talk of strikes in Iran this morning with the

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Speaker 1: Iran protesters and persistent and now I think have to

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Speaker 1: be taken quite seriously of the annex a if you like,

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Speaker 1: of Greenland. This is extraordinary volatire on certain geopolitical climate.

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Speaker 1: How does it play into your notion when you actually

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Speaker 1: go home and lane better nice and you think of

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Speaker 1: all the predictions you're making and all the numbers you're making,

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Speaker 1: how does this stuff plea.

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Speaker 2: To answer your question, James, it's never good because I

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Speaker 2: go to bed and I wake up and I check

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Speaker 2: my socials and I have to think what has Donald

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Speaker 2: Trump tweeted or what does he put out on truth

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Speaker 2: social And that is the era that we're living in.

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Speaker 2: We are living in a headline driven market that is

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Speaker 2: controlled by the US, like you mentioned, is a huge

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Speaker 2: power and a huge global force, and when they run

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Speaker 2: by someone like Trump who can move markets, we do

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Speaker 2: have to pay attention. So I do think it's important

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Speaker 2: that we pay attention to some of these headlines, but

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Speaker 2: we kind of tone down the noise a little bit.

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Speaker 2: So for example, you mentioned the attack that he has

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Speaker 2: put on Powell, very clear that he doesn't like Powell

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Speaker 2: and that he wants to Donald Trump wants to replace

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Speaker 2: him sometime this year with someone who will cut rates.

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Speaker 2: So it does put into question the idea of FED independent.

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Speaker 2: But the markets actually didn't react too much on the

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Speaker 2: news in terms of what happens with equity markets, what

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Speaker 2: happened with the dollar. But then also Donald Trump said,

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Speaker 2: you know what, I don't want twenty percent credit cards

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Speaker 2: in twenty percent rates for credit cards.

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Speaker 1: That's what he wants to put a cap of ten percent.

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Speaker 3: Wants to put a cap of ten percent on credit cards.

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Speaker 1: Credit cards in the US credit card interustries. And we

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Speaker 1: mentioned this books because it's I suppose market's a larger

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Speaker 1: theme of exceptional interference in the operation of markets by

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Speaker 1: the president of the US exceptional. So do the forecast

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Speaker 1: we've been talking about to the Hinge on the policy.

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Speaker 2: A little bit, James, I would say that there's I

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Speaker 2: guess three key drivers when you look at policies and

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Speaker 2: what's happening in markets when you're looking at share prices.

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Speaker 2: So one is monetary policy. So you've got, particularly in

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Speaker 2: the US, you've got at least a couple of rate

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Speaker 2: cards that are predicted two is around the fiscal side.

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Speaker 2: So Trump is still pretty bullish on business over there

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Speaker 2: with the One Big Beautiful Bill Act. But yes, all

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Speaker 2: these essentially announcements could have an ip on share prices

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Speaker 2: and the credit card ones is what I mentioned, because

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Speaker 2: you saw the likes of Capital one in American Express

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Speaker 2: fall down from five to ten percent just in one

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Speaker 2: day based on one announcement. That being said, the broader

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Speaker 2: market is still approaching all time highs, So I do

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Speaker 2: think that these things can move markets, but really it's

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Speaker 2: also going to come down to business fundamentals as well,

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Speaker 2: and you have seen that, you know, with a lot

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Speaker 2: of these announcements, whether it's you know, Trump going into

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Speaker 2: a capture of the Venezuela leader, the oil market wasn't disrupted

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Speaker 2: too much because in the biggest scheme of things, even

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Speaker 2: though Venezuela does have one of the biggest supplies in

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Speaker 2: terms of reserves, they only account for about one percent

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Speaker 2: of the total oil market. So the oil market was

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Speaker 2: reading through it quite quite easily. And I think that's

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Speaker 2: what investors need to focus on. Don't focus on headlines,

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Speaker 2: focus on price, and focus on how the market reacts

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Speaker 2: to these certain things. If the market is not reacting

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Speaker 2: too much on it, we'll maybe look through some of

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Speaker 2: the noise. Greenland's and a very interesting one that you mentioned, James,

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Speaker 2: because there's two very key components there around the demand

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Speaker 2: for critical rare earth minerals and also defense. So Greenlands

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Speaker 2: and an area that has you know, lithium, graphite, nickel, cobalt,

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Speaker 2: and Trump wants less reliance on China for rare earth exposure,

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Speaker 2: so Greenland could become that Western allied supply hub. And

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Speaker 2: then also the idea of a strategic defense of being

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Speaker 2: a priority for Trump as well. And I think investors

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Speaker 2: can also look through that and also play through these

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Speaker 2: key themes by looking at investing into some of those areas,

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Speaker 2: which you can actually do. So yes, to answer your question,

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Speaker 2: it can impact the long term impacts of especially what

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Speaker 2: we're going to see in the markets. But again, focus

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Speaker 2: on how the market reacts and digest some of these news,

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Speaker 2: especially some of those clearing events which we are seeing

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Speaker 2: is going to become all the more common leading into

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Speaker 2: this year could be a year of more volatility just

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Speaker 2: means that for investors, diversification is going to be the

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Speaker 2: superpower for this.

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Speaker 1: Year, right and that notion of being attuned to news

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Speaker 1: is more important.

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Speaker 2: It is, and James, you and I mean we're in

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Speaker 2: the content business. It's kind of great to talk about

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Speaker 2: what's going on with markets because there's so much happening.

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Speaker 2: But sometimes investors just need to focus on the fundamentals.

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Speaker 2: And if you focus on some of the key fundamentals

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Speaker 2: around what's driving businesses today, innovation, technology, AI, corporate governance,

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Speaker 2: shareholder return, those can do the heavy lifting when it

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Speaker 2: comes to actual shareholder returns, especially in the long term.

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Speaker 2: Short term market noise, but long term focus on fundamentals.

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Speaker 1: Okay, we'll take a break. We'll be back in the moment. Folks. Hello,

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Speaker 1: Welcome back to the Australians Money Puzzle podcast for ust

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Speaker 1: show of the year of our series on how to

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Speaker 1: Invest in twenty twenty five. We want to guide you

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Speaker 1: through the markets. We want to give you a full

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Speaker 1: picture exactly where we're at and what is the broader

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Speaker 1: expectation out there now. Today's show our first show with

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Speaker 1: Mark jocom of Global x ETFs. Markt is the investment

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Speaker 1: strategist at global X. This is his job basically to

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Speaker 1: take a line on this, and we've been talking. First

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Speaker 1: to the first part of the show, Marks basically pointed

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Speaker 1: out how the fundamentals are strong, how he's explained to

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Speaker 1: some degree why there is such optimism in the market,

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Speaker 1: particularly in the US, and the US will drive all markets,

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Speaker 1: so we can say safely that there is optimism in

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Speaker 1: the markets listed markets for talking share markets in particular

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Speaker 1: here today now issue I was saying market to some extent, though,

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Speaker 1: everything must be considered through the prism of the US

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Speaker 1: being so powerful now been seventy percent of all markets,

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Speaker 1: and then those markets been driven by policy, and that

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Speaker 1: policy been set by a unique figure where the policy

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Speaker 1: can be surprising, volatile, an erratic, and on that basis

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Speaker 1: the markets I think, tell me if I'm wrong, But

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Speaker 1: to me, I thought part of what you were saying

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Speaker 1: that first part of the show was investors, you can't

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Speaker 1: set and forget. You really want to be tuned into

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Speaker 1: what's happening. I always say day by day, but you

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Speaker 1: really need to be tuned into the settings in the

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Speaker 1: because they are liable to.

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Speaker 2: Change, absolutely, James. So when it comes to paying attention

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Speaker 2: to what's going on in news. This figurehead does have

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Speaker 2: the power to move markets, and as we've seen that

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Speaker 2: through different types of sectors that have responded to news.

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Speaker 2: So really important for investors to stay attuned with what's

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Speaker 2: going on in markets. But also the word unprecedented and

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Speaker 2: gets used a lot. What he's done with someone like

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Speaker 2: j Powell is unprecedented. I don't think I've ever seen

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Speaker 2: that or read about that across your major economies. Attacking

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Speaker 2: central bank heads, that does not happen. So because you've

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Speaker 2: got someone who's quite erratic, pay attention to what he says,

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Speaker 2: but then also pay attention to what's happening in markets.

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Speaker 2: And we were chatting offline James about some of the

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Speaker 2: volatility indicators they still relatively muted.

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Speaker 3: So even though all.

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Speaker 2: This headlines around what Trump is doing really digested, how

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Speaker 2: the market is really absorbing that information because that is

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Speaker 2: what the markets do. They collectively pretty much assimilate all

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Speaker 2: the information in markets. So when it comes to Trump

436
00:22:02,960 --> 00:22:06,159
Speaker 2: influence both on the market, do take it seriously, but

437
00:22:06,240 --> 00:22:08,800
Speaker 2: contextualize it. And I think that this year is going

438
00:22:08,840 --> 00:22:11,119
Speaker 2: to be a very volatile year when it comes to

439
00:22:11,160 --> 00:22:13,400
Speaker 2: share market. We've had some cracking years over the last

440
00:22:13,400 --> 00:22:15,200
Speaker 2: couple of years since twenty twenty two for the US

441
00:22:15,240 --> 00:22:18,800
Speaker 2: share market. So there may be some nuances where certain sectors,

442
00:22:18,800 --> 00:22:22,080
Speaker 2: certain areas, or certain figureheads that Trump doesn't like make

443
00:22:22,119 --> 00:22:25,560
Speaker 2: it hit quite hard. So the key for diversification is important.

444
00:22:25,720 --> 00:22:28,840
Speaker 2: But yes, James, to your point, don't just focus on fundamentals.

445
00:22:28,960 --> 00:22:30,680
Speaker 2: You're still going to have to have that overall lens

446
00:22:30,720 --> 00:22:32,800
Speaker 2: of what physical policy and what it's going to be

447
00:22:32,840 --> 00:22:34,119
Speaker 2: Trump's card for the year ahead.

448
00:22:35,359 --> 00:22:38,919
Speaker 1: Okay, so let's look at our market mark for the

449
00:22:39,000 --> 00:22:41,600
Speaker 1: year six, so I can look back basically at what

450
00:22:41,680 --> 00:22:45,920
Speaker 1: happened last year was expected in the year ahead very broadly.

451
00:22:46,240 --> 00:22:48,840
Speaker 1: It's interesting how we one of the things we did

452
00:22:48,840 --> 00:22:50,320
Speaker 1: call right and I think when we did this show

453
00:22:50,400 --> 00:22:53,000
Speaker 1: last year, we were talking about the nature of the

454
00:22:53,080 --> 00:22:56,000
Speaker 1: market at the time and our market it seemed to

455
00:22:56,040 --> 00:22:57,879
Speaker 1: go pretty well right through and then at the end

456
00:22:57,920 --> 00:22:59,800
Speaker 1: of the year last team didn't it as the bank's

457
00:23:00,240 --> 00:23:03,080
Speaker 1: sort of hard. Could you encapture it what happened in

458
00:23:03,080 --> 00:23:03,760
Speaker 1: twenty twenty four.

459
00:23:03,960 --> 00:23:05,920
Speaker 2: Yeah, as we said, James, on the back of our

460
00:23:05,960 --> 00:23:08,000
Speaker 2: conversation late in twenty twenty four, we did say that

461
00:23:08,000 --> 00:23:10,240
Speaker 2: the Australian market would probably have a positive year, which

462
00:23:10,240 --> 00:23:13,200
Speaker 2: it did. It was up eleven percent last year. Again,

463
00:23:13,280 --> 00:23:16,480
Speaker 2: most of that was driven by the valuation expansion rather

464
00:23:16,520 --> 00:23:19,400
Speaker 2: than the earnings growth which I was talking before. Now,

465
00:23:19,520 --> 00:23:22,119
Speaker 2: we did say during our podcast that we recorded that

466
00:23:22,520 --> 00:23:25,760
Speaker 2: perhaps the miners would outperform the banks, and that's exactly

467
00:23:25,760 --> 00:23:29,760
Speaker 2: what happened. So the materials sector led the Australian market.

468
00:23:29,800 --> 00:23:31,760
Speaker 2: I think it was up thirty eight percent, led by

469
00:23:31,760 --> 00:23:34,680
Speaker 2: some of the gold miners copper miners versus the banks,

470
00:23:34,680 --> 00:23:38,320
Speaker 2: which were only up collectively around about eighteen percent. But

471
00:23:38,359 --> 00:23:41,400
Speaker 2: it was actually led by the big four excluding CBA.

472
00:23:41,600 --> 00:23:43,680
Speaker 2: Funnily enough, so you started to see AY and ZED,

473
00:23:43,720 --> 00:23:47,240
Speaker 2: Westpac and NAB start to take the baton away from CBA.

474
00:23:47,640 --> 00:23:49,679
Speaker 2: But look, the market was also dragged down by some

475
00:23:49,720 --> 00:23:53,440
Speaker 2: weaker performances. We saw things like WIS Tech zero, CSL,

476
00:23:53,600 --> 00:23:56,720
Speaker 2: James Hardy, so there were still some pretty bad performers.

477
00:23:57,040 --> 00:23:59,480
Speaker 2: But it really is about materials. It made up over

478
00:23:59,560 --> 00:24:01,920
Speaker 2: half of the return of the total market. I think

479
00:24:02,040 --> 00:24:05,399
Speaker 2: BHP was up thirty six percent, Northern Star was up

480
00:24:05,400 --> 00:24:07,760
Speaker 2: over one hundred percent, Newmont over up one hundred and

481
00:24:07,800 --> 00:24:10,160
Speaker 2: fifty percent. So this gold mine has really led the chart,

482
00:24:10,280 --> 00:24:12,080
Speaker 2: propelled by higher goal prices.

483
00:24:12,119 --> 00:24:12,959
Speaker 1: Overall.

484
00:24:13,119 --> 00:24:15,320
Speaker 2: Now, in terms of what's going to happen, I guess

485
00:24:15,440 --> 00:24:18,000
Speaker 2: this year, we still do think that we are at

486
00:24:18,080 --> 00:24:21,600
Speaker 2: least in the start of a potential commodity supercycle, at

487
00:24:21,640 --> 00:24:25,920
Speaker 2: least globally, so we still are quite bullish on materials overall.

488
00:24:26,280 --> 00:24:28,680
Speaker 2: I think that the banks might face a little bit

489
00:24:28,760 --> 00:24:31,160
Speaker 2: of pressure this year. I mean, it's important to talk

490
00:24:31,200 --> 00:24:33,360
Speaker 2: about it because they are a huge part of our market,

491
00:24:33,680 --> 00:24:37,000
Speaker 2: but really I feel like with some of the banks,

492
00:24:37,280 --> 00:24:39,520
Speaker 2: we are a little bit unsure on what's.

493
00:24:39,359 --> 00:24:41,360
Speaker 3: Going to happen with interest rates. It's a huge part

494
00:24:41,359 --> 00:24:42,359
Speaker 3: of their margins, you know.

495
00:24:42,520 --> 00:24:45,440
Speaker 2: So I feel with something like that, you've got the

496
00:24:45,760 --> 00:24:48,800
Speaker 2: RBA potentially going to increase rates based on hot inflation

497
00:24:48,880 --> 00:24:53,000
Speaker 2: prints hotter consumer spending. But overall some of the bank's

498
00:24:53,080 --> 00:24:56,199
Speaker 2: cost income ratios might be under pressure as well. So

499
00:24:56,280 --> 00:24:59,399
Speaker 2: because there's such a huge driving commodities, You've got copper,

500
00:24:59,440 --> 00:25:03,719
Speaker 2: critical minerals, electrification, energy transition. I think these are some

501
00:25:03,760 --> 00:25:05,480
Speaker 2: of the strategies or some of the areas that a

502
00:25:05,480 --> 00:25:08,040
Speaker 2: lot of the market economists potentially think are going to

503
00:25:08,040 --> 00:25:11,360
Speaker 2: outperform this year, supported not just by valuation but by

504
00:25:11,400 --> 00:25:14,760
Speaker 2: structural demand. So I do think that Australia still could

505
00:25:14,760 --> 00:25:17,159
Speaker 2: be an interesting place to be in. But selectivity and

506
00:25:17,200 --> 00:25:19,679
Speaker 2: particularly having exposure to some of the miners is going

507
00:25:19,760 --> 00:25:21,680
Speaker 2: to be incredibly important for investors this year.

508
00:25:22,920 --> 00:25:25,240
Speaker 1: It's interesting just even from a symbolic point of view,

509
00:25:25,680 --> 00:25:28,480
Speaker 1: BHP is nearly back as the biggest stock in the market.

510
00:25:28,560 --> 00:25:31,560
Speaker 3: It is almost about to overtake CBA. I did read about.

511
00:25:31,400 --> 00:25:34,480
Speaker 1: That, Yeah, but to overtake CV which is really significant.

512
00:25:35,240 --> 00:25:37,720
Speaker 1: And of course what's also significant is that CSL is

513
00:25:37,760 --> 00:25:41,000
Speaker 1: nowhere to be seen where it was on our biggest

514
00:25:41,000 --> 00:25:43,119
Speaker 1: stock for quite a viole and that's just what a

515
00:25:43,200 --> 00:25:45,520
Speaker 1: singular story. And we're trying to stealth thematic, So trying

516
00:25:45,520 --> 00:25:48,400
Speaker 1: to steath thematic here and not go down any rabbit holes, folks.

517
00:25:48,520 --> 00:25:50,640
Speaker 2: I would just add as well, James, that there also

518
00:25:50,680 --> 00:25:52,679
Speaker 2: could be quite a lot of corporate activity happening, and

519
00:25:52,680 --> 00:25:54,920
Speaker 2: we've already seen at the start of the year takeover

520
00:25:55,000 --> 00:25:57,959
Speaker 2: bids with the likes of Blue Scope Steel, Rio Tinto

521
00:25:58,000 --> 00:26:00,240
Speaker 2: and Glencore who are trying to essentially trying to be

522
00:26:00,760 --> 00:26:03,119
Speaker 2: trying to get hold of these precious as assets such

523
00:26:03,160 --> 00:26:05,520
Speaker 2: as copper. So that could also be a really interesting

524
00:26:05,560 --> 00:26:07,560
Speaker 2: area that could drive some market returns overall.

525
00:26:07,680 --> 00:26:09,360
Speaker 3: So again, a lot of corporate activity.

526
00:26:09,440 --> 00:26:11,400
Speaker 2: Just in the first first few days of the twenty

527
00:26:11,440 --> 00:26:12,400
Speaker 2: twenty six calendar year.

528
00:26:14,320 --> 00:26:17,040
Speaker 1: You mentioned how Newmont was of one hundred percent. What

529
00:26:17,119 --> 00:26:19,359
Speaker 1: a pity that it sold itself before it jumped one

530
00:26:19,400 --> 00:26:20,840
Speaker 1: hundred percent to Barrack.

531
00:26:20,920 --> 00:26:21,760
Speaker 3: Yes, exactly right.

532
00:26:21,760 --> 00:26:23,760
Speaker 1: It was a Barrack Newmont, one of the big North

533
00:26:23,760 --> 00:26:27,119
Speaker 1: American miners, and it was effectively sort of removed as

534
00:26:27,160 --> 00:26:30,040
Speaker 1: an Australian company from the market. What giveaway that was

535
00:26:30,119 --> 00:26:33,560
Speaker 1: yet again, so okay, just on the miners, yes, as

536
00:26:33,560 --> 00:26:37,840
Speaker 1: you say, BHP, very strong year, approaching the biggest stock

537
00:26:37,840 --> 00:26:40,000
Speaker 1: in the local market. Again, folks, if you haven't noticed that,

538
00:26:40,280 --> 00:26:43,840
Speaker 1: real about twenty five percent up, really strong, all the

539
00:26:43,840 --> 00:26:45,800
Speaker 1: big miners. And then on top of that, of course

540
00:26:45,840 --> 00:26:50,400
Speaker 1: the gold miners and the gold area. And I'm cautious

541
00:26:50,520 --> 00:26:53,480
Speaker 1: of mentioning ETF or ETFs in particular, but it's really

542
00:26:53,520 --> 00:26:58,760
Speaker 1: worth noting that you're in your ETF offerings the gold

543
00:26:58,880 --> 00:27:01,119
Speaker 1: miners for whatever about gold was going well, but the

544
00:27:01,160 --> 00:27:04,359
Speaker 1: gold miners absolutely shooting the lights out obviously at the moment.

545
00:27:04,680 --> 00:27:07,520
Speaker 1: So this time asked you you thought the banks, You

546
00:27:07,600 --> 00:27:10,560
Speaker 1: thought that basically the miners might come through, and they

547
00:27:10,600 --> 00:27:13,800
Speaker 1: did at the end of the year, and you're still

548
00:27:14,040 --> 00:27:18,359
Speaker 1: optimistic about them as a sector going forward. Just briefly,

549
00:27:18,960 --> 00:27:23,639
Speaker 1: this is because of electrification, This is because of critical mintors.

550
00:27:23,680 --> 00:27:25,439
Speaker 2: What you hit the nail on the head, James, this

551
00:27:25,600 --> 00:27:29,080
Speaker 2: global AI and infrastructure investment, it remains very supportive and

552
00:27:29,160 --> 00:27:32,320
Speaker 2: a huge tailwind for the resource demand. Australia's got huge

553
00:27:32,320 --> 00:27:35,000
Speaker 2: reserves when it comes to these types of companies. We've

554
00:27:35,000 --> 00:27:37,720
Speaker 2: even seen the likes of lithium miners absolutely jump the

555
00:27:37,800 --> 00:27:40,760
Speaker 2: lights out as well. We think lithium prices have troughed,

556
00:27:40,960 --> 00:27:45,119
Speaker 2: but it really is about that broader application around, especially

557
00:27:45,160 --> 00:27:48,240
Speaker 2: around erect electrification, and we know how much power is

558
00:27:48,280 --> 00:27:50,880
Speaker 2: going to be needed to power this revolution. I think

559
00:27:51,000 --> 00:27:53,520
Speaker 2: the last couple of years James, since chat GPT came

560
00:27:53,560 --> 00:27:57,640
Speaker 2: onto people's radar, semiconductors, we're definitely the place for investors

561
00:27:57,640 --> 00:28:00,480
Speaker 2: to be now because of how energy and tensive a

562
00:28:00,480 --> 00:28:02,560
Speaker 2: lot of these data center buildouts are going to be.

563
00:28:02,840 --> 00:28:04,439
Speaker 2: We know that cop is going to be important. We

564
00:28:04,480 --> 00:28:06,720
Speaker 2: know uranium is going to be important, and that's why

565
00:28:06,720 --> 00:28:09,040
Speaker 2: a lot of those mining companies have done exceptionally well

566
00:28:09,080 --> 00:28:11,399
Speaker 2: and something I'm very bullish on. And then on gold,

567
00:28:11,440 --> 00:28:13,560
Speaker 2: why goal miners have done so well is because just

568
00:28:13,600 --> 00:28:16,000
Speaker 2: how strong their cash flow margins are from higher and

569
00:28:16,040 --> 00:28:18,560
Speaker 2: record goal prices. If they can mine gold and actually

570
00:28:18,600 --> 00:28:20,800
Speaker 2: extract that for a lower cost and then sell it

571
00:28:20,840 --> 00:28:23,560
Speaker 2: on for a higher amount, well those margins are going

572
00:28:23,560 --> 00:28:25,440
Speaker 2: to be boosted, which is why gold miners had a

573
00:28:25,520 --> 00:28:28,040
Speaker 2: terrific year, and a lot of people play gold miners

574
00:28:28,240 --> 00:28:30,240
Speaker 2: because it's a bit of a leverage impact on the

575
00:28:30,240 --> 00:28:33,480
Speaker 2: goal price. We've even seen some with silver as well,

576
00:28:33,600 --> 00:28:35,360
Speaker 2: also doing well in some of the silver miners doing

577
00:28:35,400 --> 00:28:38,080
Speaker 2: pretty well too. So I do think that for investors

578
00:28:38,120 --> 00:28:39,640
Speaker 2: who want to play their theme, they can play that

579
00:28:39,720 --> 00:28:41,560
Speaker 2: through the share market or like you said, there's a

580
00:28:41,600 --> 00:28:44,080
Speaker 2: lot of ETFs that actually hold the physical basket, but

581
00:28:44,200 --> 00:28:46,800
Speaker 2: that's the physical commodity itself. But that's I think more

582
00:28:46,800 --> 00:28:50,680
Speaker 2: as a diversification piece and a hedge against potential political

583
00:28:50,760 --> 00:28:52,800
Speaker 2: uncertainty and share market volatility.

584
00:28:54,040 --> 00:28:56,440
Speaker 1: Yes, and as you see, underneath all this, folks, is

585
00:28:56,440 --> 00:28:59,560
Speaker 1: this amazing thing that whatever the mind makes, whatever costs

586
00:28:59,600 --> 00:29:02,760
Speaker 1: of mind to take out, doesn't change. So let's say

587
00:29:02,760 --> 00:29:04,920
Speaker 1: the price of silver goes through the roof. Price of

588
00:29:04,960 --> 00:29:08,600
Speaker 1: silver basically doubled, but the cost of mining it didn't double.

589
00:29:09,040 --> 00:29:10,720
Speaker 1: And so you can see what Mark's talking about the

590
00:29:10,800 --> 00:29:14,520
Speaker 1: margins and how they fly up. Okay, so Mark hotspot mining,

591
00:29:14,640 --> 00:29:18,719
Speaker 1: materials and interesting I mean even Blue Skull, which you know,

592
00:29:18,760 --> 00:29:20,720
Speaker 1: who would have thought that the people would be fighting

593
00:29:20,720 --> 00:29:24,120
Speaker 1: over it a year ago? So right across and materials

594
00:29:24,120 --> 00:29:26,040
Speaker 1: includes all that, doesn't It goes right through not just

595
00:29:26,080 --> 00:29:29,440
Speaker 1: mining obviously, but obviously further down the track the production

596
00:29:29,600 --> 00:29:32,720
Speaker 1: of mind resources, so Steely for instance, being a pretty

597
00:29:32,720 --> 00:29:34,840
Speaker 1: good example off the back of the money of vire.

598
00:29:35,440 --> 00:29:38,480
Speaker 1: So that's that's one big sector. And the second, obviously

599
00:29:38,520 --> 00:29:40,560
Speaker 1: big sector with US is banks. I would have thought

600
00:29:40,680 --> 00:29:42,520
Speaker 1: very broadly the banks had their sell off, and that

601
00:29:42,760 --> 00:29:45,400
Speaker 1: basically would have been we'd have been improving from here.

602
00:29:45,560 --> 00:29:47,720
Speaker 2: Yeah, I think a lot of the banks still remain

603
00:29:47,840 --> 00:29:49,840
Speaker 2: in focus, James, and I just think you might just

604
00:29:49,880 --> 00:29:52,560
Speaker 2: see slower revenue growth which could put some of that

605
00:29:52,640 --> 00:29:55,320
Speaker 2: pressure on those cost income ratios that I spoke about.

606
00:29:55,680 --> 00:29:58,320
Speaker 2: A lot of companies are starting to think about company

607
00:29:58,320 --> 00:30:01,000
Speaker 2: buybacks as well. So when the companies actually buy back

608
00:30:01,040 --> 00:30:03,840
Speaker 2: some of their shares to return capital to shareholders. We've

609
00:30:03,840 --> 00:30:06,080
Speaker 2: seen sun PORP and Bank of Queensland do that, and

610
00:30:06,120 --> 00:30:08,680
Speaker 2: I think that'll be a really important component to support

611
00:30:08,680 --> 00:30:11,840
Speaker 2: shareholder returns. But I just worry about how competitive the

612
00:30:11,840 --> 00:30:14,560
Speaker 2: banking environment is at the moment. If we do see

613
00:30:14,640 --> 00:30:18,040
Speaker 2: rising interest rates or that does bode well for potentially

614
00:30:18,080 --> 00:30:21,080
Speaker 2: the margins of the bank to increase, Really it's going

615
00:30:21,120 --> 00:30:24,080
Speaker 2: to impact the consumer a lot, which is already quite fragile.

616
00:30:24,280 --> 00:30:27,040
Speaker 2: Consumer confidence is a little bit low, so that does

617
00:30:27,080 --> 00:30:29,480
Speaker 2: start to kind of tie in to the leverage credit

618
00:30:29,560 --> 00:30:32,440
Speaker 2: cycle as well. We see less borrowing that may impact

619
00:30:32,440 --> 00:30:34,560
Speaker 2: some of the banks. And really the banks are priced

620
00:30:34,600 --> 00:30:37,160
Speaker 2: to perfection, so they really need to hit a lot

621
00:30:37,200 --> 00:30:39,280
Speaker 2: of these numbers, and if it comes to earning seasons

622
00:30:39,280 --> 00:30:41,480
Speaker 2: that they don't, I could see a little bit of

623
00:30:41,560 --> 00:30:43,600
Speaker 2: sell off in some of these banks as well. Still

624
00:30:43,600 --> 00:30:46,720
Speaker 2: important to own for their income, their dividends, the franking

625
00:30:46,760 --> 00:30:49,000
Speaker 2: credits as well, but we are signed to see that

626
00:30:49,080 --> 00:30:51,280
Speaker 2: the debt side of the bank being a lot more attractive,

627
00:30:51,360 --> 00:30:53,760
Speaker 2: being the bonds that these banks are issuing, which are

628
00:30:53,760 --> 00:30:56,480
Speaker 2: more paying more yield or higher interest rate than the

629
00:30:56,520 --> 00:30:59,240
Speaker 2: actual dividend yield itself. So that's something to be conscious

630
00:30:59,240 --> 00:31:02,000
Speaker 2: of is just mon to the banking stocks in terms

631
00:31:02,000 --> 00:31:04,520
Speaker 2: of their revenue growth and how they see the year ahead,

632
00:31:04,760 --> 00:31:07,800
Speaker 2: particularly if the RBA does increase rates, and we are

633
00:31:07,840 --> 00:31:10,080
Speaker 2: pricing in at least one rate cut this year in

634
00:31:10,160 --> 00:31:12,160
Speaker 2: terms of what the market is predicting for this year,

635
00:31:13,840 --> 00:31:16,880
Speaker 2: one rate rise, one right rise, that's what the markets

636
00:31:16,920 --> 00:31:18,000
Speaker 2: are predicting at It's.

637
00:31:19,720 --> 00:31:21,720
Speaker 1: Yeah, yeah, no, I don't belave you. I mean, we're

638
00:31:21,720 --> 00:31:23,440
Speaker 1: talking about Raycotts in the US at the start, but

639
00:31:23,520 --> 00:31:25,960
Speaker 1: rate rise is here. And the theory, folks, of course,

640
00:31:26,040 --> 00:31:27,800
Speaker 1: is that the banks do better when race rise because

641
00:31:27,800 --> 00:31:30,280
Speaker 1: you know, they improve their margin and their interest margins,

642
00:31:30,280 --> 00:31:32,880
Speaker 1: and that what, as Mark says, that's a bit academic

643
00:31:33,320 --> 00:31:36,480
Speaker 1: because if people put on the street borrow less, then

644
00:31:37,000 --> 00:31:39,880
Speaker 1: it becomes more competitive, so then the business isn't as good.

645
00:31:40,120 --> 00:31:42,840
Speaker 1: And certainly when you have a situation we're just talking

646
00:31:42,880 --> 00:31:45,640
Speaker 1: about it a turn, but not a huge trajectory change

647
00:31:45,680 --> 00:31:48,400
Speaker 1: in rates, that will probably be all the more true. Okay,

648
00:31:48,560 --> 00:31:51,600
Speaker 1: very good. We will keep the individual star conversation so

649
00:31:51,680 --> 00:31:53,080
Speaker 1: later in the week. I'm sure you won't want to

650
00:31:53,120 --> 00:31:56,120
Speaker 1: hear about that. We will do that on Thursday. All right, Mark,

651
00:31:56,160 --> 00:31:58,080
Speaker 1: We're going to take a small break and we'll be

652
00:31:58,120 --> 00:31:59,360
Speaker 1: back to you in a moment. We're going to take

653
00:31:59,400 --> 00:32:02,160
Speaker 1: a look at the juiciest thing of all overseas markets,

654
00:32:02,160 --> 00:32:14,400
Speaker 1: particularly the US. Hello, Welcome back to The Australian's Money

655
00:32:14,440 --> 00:32:18,200
Speaker 1: Puzzle podcast, James Kirby with Mark Jocum of Global x

656
00:32:18,240 --> 00:32:21,880
Speaker 1: ETFs Investment Strategies. Okay, Mark, everyone makes all their money

657
00:32:21,880 --> 00:32:23,560
Speaker 1: in the US. Again and again. I looked at my

658
00:32:23,680 --> 00:32:27,480
Speaker 1: SMSF I got my accounts. I got my accounts in

659
00:32:27,520 --> 00:32:29,840
Speaker 1: December for a close off at the end of June,

660
00:32:29,840 --> 00:32:34,320
Speaker 1: which is not really very impressive. Nonetheless, it's at US.

661
00:32:34,520 --> 00:32:37,240
Speaker 1: It's at overseas earnings. It's US earnings, to be precise.

662
00:32:38,080 --> 00:32:40,240
Speaker 1: That was the cream on the cake. Not for the

663
00:32:40,280 --> 00:32:44,320
Speaker 1: first time. And as you say, really important. The defense

664
00:32:44,440 --> 00:32:47,160
Speaker 1: of the ASX being that the dividends are good is

665
00:32:47,200 --> 00:32:49,720
Speaker 1: not quite what it used to be. It's really important.

666
00:32:49,720 --> 00:32:51,720
Speaker 1: I mean, on a slow year, if your dividend U

667
00:32:51,720 --> 00:32:54,000
Speaker 1: has gone from four and a half to three and

668
00:32:54,160 --> 00:32:57,240
Speaker 1: the market only makes three, say on price, that's a

669
00:32:57,280 --> 00:33:00,280
Speaker 1: big difference. So a lot of and we've laid at

670
00:33:00,320 --> 00:33:03,280
Speaker 1: the start of the show the basics, the fundamentals, and

671
00:33:03,320 --> 00:33:06,320
Speaker 1: specifically the political risks that are afoot in the US.

672
00:33:06,320 --> 00:33:09,680
Speaker 1: So let's just talk now strictly from a pragmatic investor

673
00:33:09,680 --> 00:33:14,080
Speaker 1: point of view in terms of what's possible there. So

674
00:33:14,240 --> 00:33:17,080
Speaker 1: at the start you mentioned something very interesting that it

675
00:33:17,120 --> 00:33:19,720
Speaker 1: may actually broaden out, so that we've had this issue

676
00:33:19,720 --> 00:33:24,480
Speaker 1: that the market was heavily based on a handful of

677
00:33:24,520 --> 00:33:27,480
Speaker 1: big tech stocks and this wasn't good, many people thought

678
00:33:27,520 --> 00:33:30,920
Speaker 1: because it was a narrow market. But rather than that

679
00:33:31,320 --> 00:33:34,000
Speaker 1: becoming a problem, you've made the point that it may

680
00:33:34,360 --> 00:33:36,920
Speaker 1: that the power of the market may actually broaden out

681
00:33:37,000 --> 00:33:40,440
Speaker 1: so that we have less dependence on those. Might that

682
00:33:40,480 --> 00:33:40,920
Speaker 1: play out?

683
00:33:42,080 --> 00:33:43,680
Speaker 2: Yeah, So a lot of people when they think about

684
00:33:43,680 --> 00:33:45,720
Speaker 2: the return to the US, they think of these Magnificent

685
00:33:45,760 --> 00:33:48,720
Speaker 2: seven companies, right. They're the big megacap tech companies that

686
00:33:48,760 --> 00:33:50,960
Speaker 2: have driven a lot of the returns. We do see

687
00:33:51,040 --> 00:33:52,920
Speaker 2: twenty twenty six as being a year where you do

688
00:33:52,960 --> 00:33:55,840
Speaker 2: start to see this broadening happening. And what broadening means

689
00:33:55,840 --> 00:33:57,760
Speaker 2: is that you'll probably see a little bit more contribution

690
00:33:58,240 --> 00:34:01,680
Speaker 2: from the other non Magnific and seven companies. We're already

691
00:34:01,680 --> 00:34:03,760
Speaker 2: starting to see a lot of the earnings revisions for

692
00:34:03,880 --> 00:34:07,040
Speaker 2: these let's call the SMP four ninety three starting to rise,

693
00:34:07,080 --> 00:34:09,040
Speaker 2: and they could make up a bigger component of the

694
00:34:09,080 --> 00:34:11,960
Speaker 2: overall earnings growth leading into this year. So that's that

695
00:34:12,040 --> 00:34:14,520
Speaker 2: broadening trade that not just the Magnificent seven are going

696
00:34:14,560 --> 00:34:16,840
Speaker 2: to be driving a lot of the share market returns.

697
00:34:17,200 --> 00:34:18,960
Speaker 2: I still think you still need to park some of

698
00:34:19,000 --> 00:34:21,719
Speaker 2: your cash within the Magnificent seven companies because these are

699
00:34:21,760 --> 00:34:24,640
Speaker 2: these huge capitalist machines. But even think about it, a

700
00:34:24,640 --> 00:34:26,480
Speaker 2: lot of people think, oh, well, you know, maybe I

701
00:34:26,520 --> 00:34:29,360
Speaker 2: want to be away from the US. But these S

702
00:34:29,360 --> 00:34:32,040
Speaker 2: and P five hundred companies they generate at least half

703
00:34:32,040 --> 00:34:35,120
Speaker 2: of their revenue from overseas as well, So it's not

704
00:34:35,200 --> 00:34:37,680
Speaker 2: just about the US market, it's about being part of

705
00:34:37,680 --> 00:34:40,080
Speaker 2: a global market. They just happen to be domiciled in

706
00:34:40,120 --> 00:34:42,640
Speaker 2: the US as well. And not just that people are

707
00:34:42,640 --> 00:34:45,640
Speaker 2: talking about paying these massive valuations, but you're seeing a

708
00:34:45,680 --> 00:34:47,799
Speaker 2: lot of M and A activity or mergers and acquisitions

709
00:34:47,800 --> 00:34:50,239
Speaker 2: happening in the US. So when you're getting exposure to

710
00:34:50,280 --> 00:34:53,759
Speaker 2: the Magnificent seven companies, technically you own seven companies, but

711
00:34:53,920 --> 00:34:56,840
Speaker 2: underlying they have so many subsidiaries that they owning hundreds

712
00:34:56,880 --> 00:35:00,160
Speaker 2: and hundreds of companies, so you are getting exposure to

713
00:35:00,200 --> 00:35:03,279
Speaker 2: a diverse set of companies that in my opinion, still

714
00:35:03,320 --> 00:35:05,719
Speaker 2: don't look expensive at all, and in those signs of

715
00:35:05,719 --> 00:35:08,640
Speaker 2: a bubble just yet, there could be some irrational exuberance

716
00:35:08,640 --> 00:35:10,920
Speaker 2: in other parts of the market. But for the US,

717
00:35:11,040 --> 00:35:12,320
Speaker 2: we still think the US is going to be a

718
00:35:12,360 --> 00:35:15,439
Speaker 2: place to at least do quite well in twenty twenty six.

719
00:35:15,840 --> 00:35:18,760
Speaker 2: But there is going to be some selectivity within the US.

720
00:35:18,960 --> 00:35:21,160
Speaker 2: There could be some pain for some companies and there

721
00:35:21,239 --> 00:35:23,080
Speaker 2: might be some divergence, which is why we think having

722
00:35:23,120 --> 00:35:25,880
Speaker 2: a broad example, and you've even seen small companies James

723
00:35:26,040 --> 00:35:27,480
Speaker 2: are off to one of their best starts of the

724
00:35:27,560 --> 00:35:30,040
Speaker 2: year so far this year. We saw it in Australia

725
00:35:30,160 --> 00:35:32,960
Speaker 2: last year that small caps actually outperformed large cap I

726
00:35:33,000 --> 00:35:34,799
Speaker 2: think in the US small caps could also be an

727
00:35:34,800 --> 00:35:36,600
Speaker 2: interesting place for investors to look at.

728
00:35:37,000 --> 00:35:37,760
Speaker 1: US small cups.

729
00:35:37,960 --> 00:35:40,080
Speaker 2: Yes, US small caps, so we're looking at something like

730
00:35:40,080 --> 00:35:43,080
Speaker 2: the Russell two thousand. It's up at least at double

731
00:35:43,080 --> 00:35:45,640
Speaker 2: digits so far to start the year, and I think

732
00:35:45,760 --> 00:35:47,440
Speaker 2: that's exactly what you're going to just see. Just a

733
00:35:47,480 --> 00:35:50,800
Speaker 2: bit more broadening, especially at this AI value chain, happens

734
00:35:50,800 --> 00:35:53,080
Speaker 2: to not just impact these large hyper scalers which are

735
00:35:53,120 --> 00:35:55,680
Speaker 2: spending hundreds and hundreds of billions of dollars. Think about

736
00:35:55,719 --> 00:35:57,759
Speaker 2: where that all those hundreds of billions of dollars are

737
00:35:57,760 --> 00:36:00,319
Speaker 2: getting allocated to. All the picks and shovels within this

738
00:36:00,400 --> 00:36:04,440
Speaker 2: AI revolution, the power supplied, the cooling systems, the data centers.

739
00:36:04,600 --> 00:36:06,520
Speaker 2: These are some of the broadening trades that we're starting

740
00:36:06,520 --> 00:36:09,600
Speaker 2: to see within the US market. So still attractive spot

741
00:36:09,600 --> 00:36:11,640
Speaker 2: to be just might not be led by some of

742
00:36:11,640 --> 00:36:14,680
Speaker 2: these megacap tech companies. It might just be led broader

743
00:36:14,719 --> 00:36:16,520
Speaker 2: by a smaller set of companies overall.

744
00:36:17,200 --> 00:36:19,040
Speaker 1: The S and P four nine and three. You said,

745
00:36:19,239 --> 00:36:23,640
Speaker 1: very good. I love the concept. Yeah, because people.

746
00:36:23,440 --> 00:36:26,120
Speaker 2: Like isolating the magnificent seven in their portfolio, which is fine.

747
00:36:26,120 --> 00:36:28,200
Speaker 2: It's like almost like having like the top ten in

748
00:36:28,200 --> 00:36:30,120
Speaker 2: Australia and you want to be the X Top ten

749
00:36:30,200 --> 00:36:33,520
Speaker 2: or the X Top twenty. So whilst those are doing

750
00:36:33,600 --> 00:36:35,359
Speaker 2: a lot of the heavy lifting, we've just done some

751
00:36:35,360 --> 00:36:38,120
Speaker 2: analysis that shows that the call the SMP four ninety three,

752
00:36:38,200 --> 00:36:40,799
Speaker 2: or if you take away the seven largest companies, which

753
00:36:40,800 --> 00:36:44,239
Speaker 2: are these magnificent seven companies, earning's growth is starting to

754
00:36:44,239 --> 00:36:46,399
Speaker 2: pick up with a lot of them. So a lot

755
00:36:46,400 --> 00:36:48,839
Speaker 2: of investors are probably under allocated to the broader part

756
00:36:48,880 --> 00:36:50,920
Speaker 2: of the US market. So that's why I feel it

757
00:36:50,960 --> 00:36:53,680
Speaker 2: could be a nice little pocket that might actually outperform

758
00:36:53,760 --> 00:36:55,920
Speaker 2: this year. That being said, you still have to have

759
00:36:55,960 --> 00:36:58,399
Speaker 2: your allocation to these big tech companies. It's very hard

760
00:36:58,400 --> 00:37:01,200
Speaker 2: to outperform in a market if you don't have exposure

761
00:37:01,239 --> 00:37:01,520
Speaker 2: to them.

762
00:37:02,239 --> 00:37:04,319
Speaker 1: It sounds like it's part of what informs your own

763
00:37:04,440 --> 00:37:07,040
Speaker 1: sort of buoyancy boyant view on the market.

764
00:37:07,239 --> 00:37:07,880
Speaker 3: Yeah, definitely.

765
00:37:07,880 --> 00:37:10,000
Speaker 2: And when you talk about the large cap end of town,

766
00:37:10,080 --> 00:37:13,279
Speaker 2: just remember that sometimes the companies within them go through

767
00:37:13,280 --> 00:37:16,799
Speaker 2: different periods of our performance. Last year, the Magnifics seven

768
00:37:16,800 --> 00:37:19,920
Speaker 2: companies were up about twenty five percent last year, but

769
00:37:20,160 --> 00:37:22,840
Speaker 2: it was led by the likes of Alphabet and Nvidia,

770
00:37:22,920 --> 00:37:25,799
Speaker 2: whereas other companies like Amazon and even Apple were only

771
00:37:25,880 --> 00:37:27,200
Speaker 2: up five to eight percent.

772
00:37:27,239 --> 00:37:29,080
Speaker 3: I think it was so there could.

773
00:37:28,840 --> 00:37:31,920
Speaker 2: Be a little bit more of divergence within those Magnificents

774
00:37:31,920 --> 00:37:34,799
Speaker 2: seven companies depending on how they perform. Especially you know

775
00:37:34,840 --> 00:37:37,000
Speaker 2: Tesla being so part of the ev side of things,

776
00:37:37,160 --> 00:37:39,239
Speaker 2: they're getting a lot of competition from the likes of

777
00:37:39,280 --> 00:37:41,799
Speaker 2: BYD and other types of Chinese companies. And we're still

778
00:37:41,920 --> 00:37:43,719
Speaker 2: very bullish on China, which we can get into in

779
00:37:43,760 --> 00:37:45,480
Speaker 2: a moment, so there could be a little bit of

780
00:37:45,520 --> 00:37:49,360
Speaker 2: divergence within those magnificents seven companies. Overall, we remain pretty

781
00:37:49,360 --> 00:37:52,279
Speaker 2: constructive though of the US overall, okay, And.

782
00:37:52,280 --> 00:37:54,920
Speaker 1: What about the wider world. They're MISKI basically the Global

783
00:37:54,960 --> 00:37:58,080
Speaker 1: Index or Emerging Markets for the non US markets for

784
00:37:58,200 --> 00:37:58,720
Speaker 1: its review.

785
00:37:59,320 --> 00:38:02,239
Speaker 2: Yes, not a lot of people allocate towards things like

786
00:38:02,239 --> 00:38:04,879
Speaker 2: emerging markets, James. If you look at most Australian portfolios,

787
00:38:04,920 --> 00:38:07,880
Speaker 2: it's normally around Aussie shares and the US, maybe a

788
00:38:07,880 --> 00:38:09,719
Speaker 2: little bit of Europe. I think this year is going

789
00:38:09,800 --> 00:38:11,840
Speaker 2: to be a really interesting year to go beyond the US,

790
00:38:11,960 --> 00:38:14,640
Speaker 2: beyond borders, and to look at areas that for me

791
00:38:14,800 --> 00:38:18,240
Speaker 2: look really attractive, like Japan and China and even broader

792
00:38:18,320 --> 00:38:21,160
Speaker 2: merging markets like India. So to touch on a few

793
00:38:21,200 --> 00:38:23,640
Speaker 2: of them. Japan's going through a really interesting part at

794
00:38:23,640 --> 00:38:26,480
Speaker 2: the moment where they've got a new prime minister in

795
00:38:26,719 --> 00:38:28,919
Speaker 2: there's a lot of physical stimulus coming out of there.

796
00:38:29,080 --> 00:38:32,040
Speaker 2: They're focusing on things like sharehold return and corporate governance.

797
00:38:32,360 --> 00:38:35,719
Speaker 2: Over fifty percent of the actual Japanese households hold more

798
00:38:35,760 --> 00:38:38,160
Speaker 2: than cash overall in their portfolio, so that could come

799
00:38:38,160 --> 00:38:40,600
Speaker 2: into the market as well, and you've still got access

800
00:38:40,680 --> 00:38:43,799
Speaker 2: to some pretty leading AI companies as well, like you know,

801
00:38:43,920 --> 00:38:47,120
Speaker 2: Tokyo Electron, soft Bank, Hitachi. There's a lot of companies

802
00:38:47,160 --> 00:38:49,560
Speaker 2: doing some really good things there. So Japan's probably one

803
00:38:49,600 --> 00:38:51,680
Speaker 2: of my interesting picks for twenty twenty six that I

804
00:38:51,680 --> 00:38:53,719
Speaker 2: think could do really well. Had a really good year

805
00:38:53,760 --> 00:38:55,239
Speaker 2: in twenty twenty five, but I think it's going to

806
00:38:55,239 --> 00:38:56,640
Speaker 2: continue in twenty twenty six.

807
00:38:57,200 --> 00:38:58,160
Speaker 3: And then China.

808
00:38:58,760 --> 00:39:01,279
Speaker 2: Really you're sourcing a lot of AI innovation happening there,

809
00:39:01,320 --> 00:39:03,080
Speaker 2: and a lot of people James say that, you know,

810
00:39:03,160 --> 00:39:06,400
Speaker 2: merging markets and China is really uninvestable at the moment

811
00:39:06,480 --> 00:39:09,200
Speaker 2: just because of the political uncertainty, the risk of the leverage,

812
00:39:09,200 --> 00:39:12,480
Speaker 2: and the property market. But the AI gains are still

813
00:39:12,520 --> 00:39:15,160
Speaker 2: yet to materialize in China, and if you look at

814
00:39:15,160 --> 00:39:17,120
Speaker 2: some crazy stats, like they have the most amount of

815
00:39:17,120 --> 00:39:20,319
Speaker 2: AI patents from a trademark perspective compared to the rest

816
00:39:20,320 --> 00:39:22,360
Speaker 2: of the world, and it's trading at a pretty compelling

817
00:39:22,400 --> 00:39:24,880
Speaker 2: evaluation as well. So I do think China is going

818
00:39:24,960 --> 00:39:26,720
Speaker 2: to also start to be a lot of the heavy

819
00:39:26,719 --> 00:39:29,360
Speaker 2: lifting when it comes to this next AI trade, particularly

820
00:39:29,400 --> 00:39:31,359
Speaker 2: if we have another what we call a deep seek

821
00:39:31,440 --> 00:39:34,080
Speaker 2: moment where we see some of these low cost models

822
00:39:34,200 --> 00:39:36,200
Speaker 2: that can be rolled out at a fraction of the

823
00:39:36,239 --> 00:39:39,120
Speaker 2: cost and could get broad adoption. And then finally on

824
00:39:39,160 --> 00:39:41,880
Speaker 2: emerging markets, James, I think India is also going to

825
00:39:41,920 --> 00:39:44,320
Speaker 2: be a very I would call it a contrarian trade

826
00:39:44,440 --> 00:39:46,960
Speaker 2: at the moment. And why I say contrarian is because

827
00:39:47,000 --> 00:39:48,760
Speaker 2: it was actually one of the few markets that didn't

828
00:39:48,760 --> 00:39:52,160
Speaker 2: do so well last year because it was hampered by

829
00:39:52,440 --> 00:39:55,000
Speaker 2: one little bit of weaker earnings, a little bit of

830
00:39:55,000 --> 00:39:58,719
Speaker 2: our flows from foreign investors, but just uncertainty around US tariffs.

831
00:39:58,920 --> 00:40:00,400
Speaker 3: And to bring it back to your gushion.

832
00:40:00,520 --> 00:40:03,520
Speaker 2: At the start, Trump can move markets if he's imposing

833
00:40:03,560 --> 00:40:06,680
Speaker 2: fifty percent tariffs on these companies and also restricting things

834
00:40:06,719 --> 00:40:10,520
Speaker 2: like visas, that can definitely impact market sentiment. But now

835
00:40:10,560 --> 00:40:13,480
Speaker 2: I think positioning is changing. Valuations have come down in

836
00:40:13,480 --> 00:40:17,200
Speaker 2: India and there could be expectations for positive surprises, particularly

837
00:40:17,480 --> 00:40:20,080
Speaker 2: on the other side, James. If Trump and Mody in

838
00:40:20,080 --> 00:40:22,640
Speaker 2: India actually agree to a trade trus you could see

839
00:40:22,640 --> 00:40:26,000
Speaker 2: the India market absolutely rocket because it's delivering about seven

840
00:40:26,080 --> 00:40:29,440
Speaker 2: to eight percent GDP growth overall. So again, I think

841
00:40:29,480 --> 00:40:32,160
Speaker 2: this year could be a year where you go beyond borders,

842
00:40:32,200 --> 00:40:35,240
Speaker 2: where you look beyond just Australia, beyond just the US,

843
00:40:35,480 --> 00:40:37,200
Speaker 2: and you think about the likes of what could also

844
00:40:37,280 --> 00:40:39,080
Speaker 2: drive markets, not to make up a huge part of

845
00:40:39,080 --> 00:40:42,200
Speaker 2: your portfolio, but have exposure to Japanese equities, have some

846
00:40:42,280 --> 00:40:45,239
Speaker 2: two Chinese equities, or broad emerging markets like India, even

847
00:40:45,280 --> 00:40:48,400
Speaker 2: Europe with the massive defense cycle superspend that's happening as well.

848
00:40:48,600 --> 00:40:50,480
Speaker 2: I think if you're remiss not to think about you

849
00:40:50,480 --> 00:40:52,440
Speaker 2: know that other thirty percent, James that you mention of

850
00:40:52,480 --> 00:40:55,040
Speaker 2: the World Index which can drive markets as it did

851
00:40:55,080 --> 00:40:55,719
Speaker 2: so last year.

852
00:40:56,520 --> 00:40:58,919
Speaker 1: Yeah, well, I'm just back back of what you're saying

853
00:40:58,960 --> 00:41:01,600
Speaker 1: there is interesting. Been reading a lot of US bast

854
00:41:01,680 --> 00:41:05,960
Speaker 1: investment outlooks and the US based institutional vesters. They're talking

855
00:41:06,160 --> 00:41:09,399
Speaker 1: about the opportunities beyond the US for which they don't

856
00:41:09,440 --> 00:41:13,240
Speaker 1: normally do. Just one nice thing on for our listeners

857
00:41:13,239 --> 00:41:17,200
Speaker 1: when they want to look at these areas and they

858
00:41:17,280 --> 00:41:20,080
Speaker 1: see and obviously they might have taken they combine anytf

859
00:41:20,080 --> 00:41:23,480
Speaker 1: from a variety of sources. You're just worn What about

860
00:41:23,520 --> 00:41:26,920
Speaker 1: currency and hedging? Did I read that there had been

861
00:41:26,920 --> 00:41:30,359
Speaker 1: a lift in the number of Australians buying hedged ETFs

862
00:41:30,560 --> 00:41:34,160
Speaker 1: ver unhedged, and is that so and what does it mean?

863
00:41:34,360 --> 00:41:36,319
Speaker 2: You must be reading our research Chames, which is great

864
00:41:36,360 --> 00:41:39,320
Speaker 2: because I must speak. Yet we have noticed that James

865
00:41:39,719 --> 00:41:42,680
Speaker 2: historically only around about probably ten to fifteen percent of

866
00:41:43,160 --> 00:41:46,520
Speaker 2: flows they go into share market ETFs generally tend to

867
00:41:46,560 --> 00:41:49,080
Speaker 2: be currency hedged, which is where it protects the value

868
00:41:49,120 --> 00:41:51,520
Speaker 2: just in case the Australian dollar drops or rises against

869
00:41:51,600 --> 00:41:54,040
Speaker 2: a basket of currencies like called the US dollar or

870
00:41:54,080 --> 00:41:56,719
Speaker 2: the euro. But now you're starting to see this, I

871
00:41:56,760 --> 00:41:59,719
Speaker 2: guess this interest rate divergence that's happening in Australia could

872
00:41:59,719 --> 00:42:03,600
Speaker 2: actually be a tailwind for currency hedging, and about one

873
00:42:03,640 --> 00:42:07,640
Speaker 2: in five dollars is now going into currency hedged ETFs. So,

874
00:42:07,800 --> 00:42:11,080
Speaker 2: for example, we're seeing policy divergence with the pretty much

875
00:42:11,120 --> 00:42:13,520
Speaker 2: everyone cutting rates. I mean, some of the merging markets

876
00:42:13,520 --> 00:42:16,200
Speaker 2: are rising rates, and Japan's is another example. But if

877
00:42:16,239 --> 00:42:19,799
Speaker 2: Australia is going to be potentially increasing interest rates but

878
00:42:20,080 --> 00:42:22,239
Speaker 2: the US and other markets are going to continue to

879
00:42:22,280 --> 00:42:24,040
Speaker 2: cut rates, you may start to see a bit of

880
00:42:24,040 --> 00:42:26,680
Speaker 2: the impact on the Australian dollar, which is currently trading

881
00:42:26,680 --> 00:42:29,440
Speaker 2: at about sixty seven US cents. I've seen a lot

882
00:42:29,440 --> 00:42:31,800
Speaker 2: of forecasts that say that it probably will breach about

883
00:42:31,840 --> 00:42:34,160
Speaker 2: seventy cents, so there could be some upside, especially if

884
00:42:34,160 --> 00:42:36,840
Speaker 2: the US dollar continues to weaken. So that's where currency

885
00:42:36,880 --> 00:42:39,200
Speaker 2: hedging could form a part of your portfolio to get

886
00:42:39,200 --> 00:42:41,480
Speaker 2: a little bit of that extra return from the currency

887
00:42:41,680 --> 00:42:44,520
Speaker 2: appreciation that's happening in the Australian market. So it is

888
00:42:44,560 --> 00:42:46,799
Speaker 2: starting to happen with flows. And now the great thing

889
00:42:46,800 --> 00:42:48,800
Speaker 2: about ETFs, James, is you don't have to worry about

890
00:42:48,800 --> 00:42:52,040
Speaker 2: doing the whole foreign exchange currency yourself and ETF can

891
00:42:52,040 --> 00:42:52,600
Speaker 2: do that for you.

892
00:42:52,960 --> 00:42:55,040
Speaker 3: So if you want to invest in call it.

893
00:42:55,080 --> 00:42:57,520
Speaker 2: You know, like the Fang stocks, there's a currency hedge version,

894
00:42:57,640 --> 00:42:59,040
Speaker 2: or of the S and P five hundred there's a

895
00:42:59,040 --> 00:43:01,120
Speaker 2: hedge version. Just have a look at your options within

896
00:43:01,200 --> 00:43:02,040
Speaker 2: the Australian market.

897
00:43:03,160 --> 00:43:05,440
Speaker 1: Yes, well worth bringing up. I wanted to bring that

898
00:43:05,520 --> 00:43:07,360
Speaker 1: up with you, and not to suggest you do you

899
00:43:07,400 --> 00:43:11,160
Speaker 1: don't hedge folks, but to know that the number of

900
00:43:11,160 --> 00:43:15,920
Speaker 1: people hedging in ETFs in particular has risen and has

901
00:43:16,000 --> 00:43:19,000
Speaker 1: risen notably in recent months just because of the of

902
00:43:19,080 --> 00:43:21,759
Speaker 1: what Mark has been saying. Terrific Mark, great to talk

903
00:43:21,800 --> 00:43:24,400
Speaker 1: to you again, Thank you very much of your world

904
00:43:24,440 --> 00:43:28,400
Speaker 1: tour around the world with Mark Joakum in forty minutes

905
00:43:28,520 --> 00:43:30,560
Speaker 1: or so, marvelous. Thank you very much for coming on

906
00:43:30,640 --> 00:43:30,959
Speaker 1: the show.

907
00:43:31,040 --> 00:43:32,520
Speaker 3: Thanks again, James really enjoyed it.

908
00:43:32,840 --> 00:43:37,000
Speaker 1: That was Mark Jocum, the investment strategist at Global x Ets.

909
00:43:37,200 --> 00:43:40,400
Speaker 1: Terrific conversation with him. As always, I hope that was useful,

910
00:43:40,600 --> 00:43:43,000
Speaker 1: A damn good starter. I would like to think for

911
00:43:43,239 --> 00:43:45,920
Speaker 1: the year in terms of setting you your sales if

912
00:43:45,960 --> 00:43:49,040
Speaker 1: you like, for the year ahead, stick with us. We're

913
00:43:49,080 --> 00:43:52,320
Speaker 1: going to talk about individual share choices and individual share

914
00:43:52,360 --> 00:43:54,520
Speaker 1: codes next, which would be really interesting. We'll do that

915
00:43:54,600 --> 00:43:57,960
Speaker 1: on Thursday with a June Beleu of ten Cup. Talk

916
00:43:58,000 --> 00:44:02,080
Speaker 1: to you soon. So the wood, the

917
00:44:03,880 --> 00:44:03,920
Speaker 2: S