Speaker 1: Whatever your aspirations, we can help you get there, not
Speaker 1: just with investing, but now with a high interest flexible
Speaker 1: savings account and a key we save a scheme too,
Speaker 1: share ease for the money you've got big plans for.
Speaker 1: Whatever your aspirations, we can help you get there, not
Speaker 1: just with investing, but now with a high interest, flexible
Speaker 1: savings account and a key we save a scheme too,
Speaker 1: share ease for the money you've got big plans for.
Speaker 2: Kirakoto Garth Bray here with Shared Lunch. Today we are
Speaker 2: with Anna Scott, the CEO of Smart, talking about the
Speaker 2: for new exchange traded funds ETFs that they are bringing
Speaker 2: to market. But first, some important information that you really
Speaker 2: need to consider.
Speaker 3: Investing involves the risk you might lose the money you
Speaker 3: start with. We recommend talking to a licensed financial advisor.
Speaker 3: We also recommend reading product disclosure documents before deciding to invest.
Speaker 3: Everything you're about to see and here is current at
Speaker 3: the time of.
Speaker 2: Recording and a great to be here. Thank you for
Speaker 2: inviting us, Thanks for coming. Let's dive into those four
Speaker 2: new exchange traded funds that you are getting ready to launch.
Speaker 2: I think the day that this podcast goes out right.
Speaker 4: Yep, there's day.
Speaker 2: So if I look at the sorts of things you're
Speaker 2: talking about here, we're talking about a bitcoin ETF, we're
Speaker 2: talking about gold yep, and exposure to US tech stocks
Speaker 2: as well as our own large caps and the nz X. Yeah,
Speaker 2: so what made those four so attractive?
Speaker 4: There's a lot of interest in bitcoin, so shall we
Speaker 4: start there?
Speaker 2: Yeah, for sure.
Speaker 4: Really the thing about bitcoin is it has got a
Speaker 4: lot of interest and people are on either side of
Speaker 4: that whether you really believe in cryptocurrency and digital currency
Speaker 4: going forward or you don't, and either way that's okay.
Speaker 4: But we really believe that our job and part of
Speaker 4: the branding around smart is to bring choice to people.
Speaker 4: So part of that is bitcoin, and for us, what
Speaker 4: we've done is we've brought that home to the local exchange.
Speaker 4: That means that when you want to get into if
Speaker 4: you believe in cryptocurrency as a a good place to
Speaker 4: have some of your investment money, not all of it,
Speaker 4: but some of it, then you don't have to worry
Speaker 4: about getting into the world of how do you buy
Speaker 4: a digital currency, how do you store it, what is
Speaker 4: your security key or your what it looks like, and
Speaker 4: how you're going to manage that ongoing basis. Instead, what
Speaker 4: you can buy is an ETF that is going to
Speaker 4: track the price of bitcoin and you're going to participate
Speaker 4: in its ups and downs.
Speaker 2: It has been seen. I guess it feels really like
Speaker 2: about five minutes ago, it was not really even seen
Speaker 2: as a credible kind of an asset. Now, I mean
Speaker 2: you're talking about a product, but effectively someone could put
Speaker 2: their nana into effectively, right, Yes, so it's really really
Speaker 2: made the successible. It is a very volatile kind of
Speaker 2: investment though, bitquen. That'll be reflected obviously as the ETF
Speaker 2: matches that value.
Speaker 4: Yes, And so if you've been investing in any of
Speaker 4: our ETFs for a while, you'll know that each has
Speaker 4: a product disclosure statement we call it a PDS, and
Speaker 4: in there we need to do a risk rating. So
Speaker 4: when you look at that risk rating, that's a reflection
Speaker 4: of the volatilities. So that's the ups and downs that
Speaker 4: you're going to go over the lifetime of holding that product.
Speaker 4: But it also generally reflects the return that you think
Speaker 4: you're going to get to pay that volatility off. So
Speaker 4: putting your nana into it or yourself really comes back
Speaker 4: to what are you wanting to hope to achieve with that?
Speaker 4: So what are your goals? How long do you want
Speaker 4: to hold it for? Because if you're going through the curves,
Speaker 4: then you're getting out at the top of the bottom
Speaker 4: or the middle, and when might you want your money
Speaker 4: out of that? But for a lot of people, now
Speaker 4: that digital currency has become a valid currency around the world,
Speaker 4: and we do believe that bringing that choice home to
Speaker 4: our local investors means you've got a way to access
Speaker 4: that and New Zealand dollars on our own inzets.
Speaker 2: A lot of the commentrary I read around this is ah,
Speaker 2: some people that are nervous about bitcoin. Other people say,
Speaker 2: look one to three percent and your portfolio is an
Speaker 2: acceptable risk. It's a very personal choice, isn't it. How
Speaker 2: much you get into this.
Speaker 4: It is a personal choice. And I think that if
Speaker 4: you look back to the starting of all of us
Speaker 4: investing rope cash, and then you add on with OK
Speaker 4: bonds and then equity, and now we're getting into more
Speaker 4: and more different thematic or disaggregated views of that were
Speaker 4: than the equity space and the alternative assets. So yes,
Speaker 4: bitcoin is an alternative asset. A lot of people are
Speaker 4: using it for their own personal transactions and a method
Speaker 4: of payment around the world. I Shares, who we've partnered
Speaker 4: with on this product, have that bitcoin that they went
Speaker 4: live with, and it's the largest market cap bitcoin ETF
Speaker 4: in the world at the moment, and so worldwide there
Speaker 4: is a lot of interest and belief in it.
Speaker 2: So what sort of insights lead you to think this
Speaker 2: is what we need to do right now?
Speaker 4: So we did two things. We looked at the local
Speaker 4: market and we got insights into the data of where
Speaker 4: people are investing. So a lot of New Zealanders are
Speaker 4: already investing in bitcoin anyway, either direct or going offshore
Speaker 4: to buy that kind of product. And we also talked
Speaker 4: to global partners and looked at global data and research,
Speaker 4: including talking to I Shares and it being their fastest
Speaker 4: growing ETF and being part of that marketing suite that
Speaker 4: they see real insight and interest into mean that we
Speaker 4: thought that there was a real case for adding it
Speaker 4: to the choice of funds that are available here at home.
Speaker 2: So if you break it down, then you've got people
Speaker 2: that are already happy to invest directly in cryptocurrencies or
Speaker 2: in bitcoin through an exchange, a coin exchange going there
Speaker 2: and just literally buying a commodity. And you've got others
Speaker 2: that are already using existing offshore listed ETFs, and now
Speaker 2: you're offering this. Can you explain why I'd want to
Speaker 2: be in one or other of those and why I
Speaker 2: might choose this rather than one of those other two.
Speaker 4: I think that comes into therefore coming back to what
Speaker 4: your call goals are. So when might I want to be?
Speaker 4: What am I investing for? Am I investing for a return?
Speaker 4: Or am I investing for an income? And then after that,
Speaker 4: well when might if I'm after a return, when might
Speaker 4: I want that return? And how secure do I want
Speaker 4: that to be? Do I want to be able to
Speaker 4: access it whenever I like, etc? So those kind of things,
Speaker 4: and also what else have I got in my investment portfolio?
Speaker 4: So if you come out of and decide, well, actually,
Speaker 4: I think that bitcoin is a really interesting asset class,
Speaker 4: I do think it's worth me having a percentage of
Speaker 4: my portfolio and it then it's to your point, You've
Speaker 4: got a couple of choices. How do I get in?
Speaker 4: So I can decide that I directly want to own bitcoin,
Speaker 4: but that means I need to open an account and
Speaker 4: have a wallet and figure out how am I going
Speaker 4: to kind of buy and store and manage that on
Speaker 4: ongoing basis. And for a lot of us, with our
Speaker 4: long laundry list of things we've got to do at
Speaker 4: home or with the kids of the family, you're like, ok,
Speaker 4: that sounds quite hard.
Speaker 2: Sounds like a lot of admins.
Speaker 4: It does, right, and it's an unknowing, and we already
Speaker 4: have in our mind that oh maybe that's a risky unknown.
Speaker 4: So what a ETF gives you in terms of that
Speaker 4: exchange traded fund to hold that is okay. Now I
Speaker 4: know that I don't have to worry about all of
Speaker 4: that admin of buying, holding, managing it. But I know
Speaker 4: that I've got a product that's going to track that
Speaker 4: bitcoin market, and that's actually what I'm interested in. I'm
Speaker 4: interested in knowing whether it's going to go up, and
Speaker 4: I want to be part of that if that's the case.
Speaker 2: But if I'm part of one that's listed overseas, why
Speaker 2: would I want to look at it locally listed one?
Speaker 2: What's the difference.
Speaker 4: So you've got choices there as well. Yes, you can
Speaker 4: go offshore and directly buy I shares ETF yourself. With
Speaker 4: that comes the fact that you need to be trading
Speaker 4: externally offshore on that market what currency is in So
Speaker 4: I'm going to have to pay a currency conversion rate
Speaker 4: because I'm buying here locally in New Zealand dollars. And
Speaker 4: also what's the cost of holding that on an offshore basis?
Speaker 4: And so you normally pay custody fees to pay offshore
Speaker 4: for an international custodian who's holding your yes it for
Speaker 4: you if you buy it locally, then what we've done
Speaker 4: is it's in a PIE structure. And so PIE is
Speaker 4: that structure that we have that's special to New Zealand.
Speaker 4: That means that all the taxable income in that fund
Speaker 4: are taxed at a final tax rate of twenty eight percent,
Speaker 4: and for some of us, that tax rate is lower
Speaker 4: than our own personal tax rate final tax in New Zealand.
Speaker 4: In New Zealand dollars on the exchange that I can
Speaker 4: buy and sell easily in my trading account. So we
Speaker 4: think those are all benefits.
Speaker 2: Super simple. I guess the point with PIE, and I'm
Speaker 2: not a tax advisor, but I would say that if
Speaker 2: your tax rate happens to be lower, you'll have to
Speaker 2: chase after that extra red yourself yeah, you're back in
Speaker 2: the admin you mentioned. I suppose as well the idea
Speaker 2: that you're getting exposured a bitcoin. You're not actually buying
Speaker 2: the currency, though, are you? And I'm thinking straight away,
Speaker 2: banks quite often want to know or lenders want to
Speaker 2: know if you're invested in crypto for anti money laundering purposes.
Speaker 2: So this is a way to actually own exposure to
Speaker 2: cryptocurrency without actually owning it. It's correct, So there's another
Speaker 2: little bonus perhaps for people to think about.
Speaker 4: It's very true. And that's when I say, you're not
Speaker 4: holding that direct asset, and that's the same as ol
Speaker 4: gold etf so similar idea, another alternative asset. You're not
Speaker 4: holding that gold, so no gold bars. It's going to
Speaker 4: be handing around in there, but you absolutely are owning
Speaker 4: They market the gold market as it were, and therefore
Speaker 4: you're tracking and following the market, but you don't have
Speaker 4: to worry about the actual underlying direct asset there.
Speaker 2: Weirdly, sort of gold's the original bitcoin.
Speaker 4: Isn't it It is?
Speaker 2: So yeah, it's scarce. There's only so much of it
Speaker 2: on the planet. You can't make anymore. It's something that
Speaker 2: people sort of figure has some inherent value.
Speaker 4: It's been long around for a very long time, and
Speaker 4: so people talk about it as a safe haven, but
Speaker 4: really it's a store of wealth, and it's the original
Speaker 4: store of wealth. You're right. But in terms of being
Speaker 4: that safe haven, and why we've added it in that
Speaker 4: alternative space in terms of those assets, is that it's
Speaker 4: uncorrelated to equity markets. And so by that I mean,
Speaker 4: you know, we talk a lot about diversification. What does
Speaker 4: that mean. So diversification can mean those buckets you're going
Speaker 4: to put your assets in traditionally, right, the cash, the bonds,
Speaker 4: the equities, et cetera, but now there are more of those.
Speaker 4: Property is a well understood acid allocation diversifier, and so
Speaker 4: these ones are the same. So for gold, we talk
Speaker 4: about it as a safe haven because it's not directly
Speaker 4: tied to or moving in tandem, and that's the correlation part.
Speaker 4: It's not moving in tandem with the equity markets, so
Speaker 4: it's a nice hedge against inflation. It's also a hedge
Speaker 4: of wind the equity markets are going at any time,
Speaker 4: and so people like it for that purpose. But it
Speaker 4: doesn't pay you an income, right, there's no dividend on that.
Speaker 2: It's a pure capital play. Basically, you're just bet hoping
Speaker 2: it's it'll increase in value and that's it.
Speaker 4: Yeah, And I think that store of wealth idea kind
Speaker 4: of brings that across, right. It's not like it's increased
Speaker 4: things sitting there paying you anything, but it is a
Speaker 4: rock solid store of that wealth it has it continues
Speaker 4: to have the same buying power over time that it
Speaker 4: had originally.
Speaker 2: You've got a store of wealth, You've got something you
Speaker 2: can dabble with. The US tech stocks story is one
Speaker 2: of those very very interesting kind of themes that people
Speaker 2: are investing in. What does this one have? How do
Speaker 2: you work out what to put it into? Or do
Speaker 2: you you're leaving this largely to your partners at I Show, This.
Speaker 4: One was very much driven by local demand. So when
Speaker 4: I took this job about a year ago, came from
Speaker 4: a wealth background. You talk to a lot of people
Speaker 4: and advisors who are investing, and a lot of them said,
Speaker 4: there's nothing locally in that US tech. We're all going
Speaker 4: offshore for that. So we looked at that and talked
Speaker 4: to I Shares and said, well, how else do we
Speaker 4: bring that on shore and what does that look like?
Speaker 4: So we've chosen one of their again ETFs to wrap
Speaker 4: in our local pie wrapper here. We've also done this
Speaker 4: a slightly different way because we're hedging this one hundred percent.
Speaker 4: So what that means is that instead of worrying so
Speaker 4: we've done the US tech sector. Instead of worrying that
Speaker 4: how the US dollar is going to move in relation
Speaker 4: to the Kiwi dollar, we've just taken that out of
Speaker 4: the equation and said you're buying it here in your
Speaker 4: local Keiwi dollars. You're buying it because you want to
Speaker 4: be able to keep track of where that innovative tech
Speaker 4: sector in the US market is going. And therefore we've
Speaker 4: taken their currency exposure out by saying we're taking care
Speaker 4: of that and running the local fund. We will one
Speaker 4: hundred percent hedge that so that if it's going up
Speaker 4: twenty percent, your value of yours is also up twenty percent.
Speaker 4: Don't worry if then the New Zealand dollars dropped and
Speaker 4: therefore you have to take some percentage points off it
Speaker 4: because your key is worth less than the US.
Speaker 2: Now, because that can really really change the bottom line result,
Speaker 2: Candent that can that cutsy risk.
Speaker 4: A new one is the US tech sector. So it
Speaker 4: is based on the S and P. It's the top
Speaker 4: innovative US tech companies that are in that space, and
Speaker 4: therefore you want to be able to track that market
Speaker 4: because that's what you're putting it in your portfolio for.
Speaker 4: Not only do you want some diversification, but lots of
Speaker 4: us like this idea of I call it core and explore,
Speaker 4: or you can call it cora a niche. You know
Speaker 4: what your solid asset allocation is, so how much you
Speaker 4: want and kind of income type or what you want
Speaker 4: in growth where you've got your safe stores of wealth
Speaker 4: versus your speculative growth ones. And so some of us
Speaker 4: when we look at our atfs might think that I'm
Speaker 4: really interested in the global healthcare sector, or I believe
Speaker 4: that Ossie resources are going to take off, or Japan
Speaker 4: is poised for a massive growth in the economy. But
Speaker 4: that's where you put your little explore around the edges.
Speaker 4: I have a view on that area of the market.
Speaker 4: Same with a US tech and it's been really popular
Speaker 4: for a long time. It's got some great growth in it,
Speaker 4: and I think the beauty of the US market and
Speaker 4: the US tech part there is it's such a large market,
Speaker 4: so it's really nicely self regulating. So if you look
Speaker 4: back over time of what those tops ten to twenty
Speaker 4: holdings will be, they churn themselves based on which are
Speaker 4: the up and coming If Navidia is coming through or
Speaker 4: if one drops out, We've got all of those top
Speaker 4: holdings for you, and we will make sure that we're
Speaker 4: holding those in proportion to their waiting in that market.
Speaker 4: And therefore you truly are going to have the same
Speaker 4: exposure as how all those tech companies in the US
Speaker 4: are doing.
Speaker 2: Cel those top holdings have been pretty top heavy for
Speaker 2: quite a long time. The h something will change.
Speaker 4: Yeah I'm talking back years, but yeah, you don't have
Speaker 4: to worry about is something the next Kodak or have
Speaker 4: I got the next Navidia, because they will work their
Speaker 4: way through into that index and we will hold them.
Speaker 2: So what would be the attraction with all of that
Speaker 2: on offer and people looking at something that's based around
Speaker 2: the NZX twenty.
Speaker 4: Yes, so it's the top twenty companies in New Zealand
Speaker 4: and So if you're interested in a view when you
Speaker 4: talk about your allocation of what our home economy and
Speaker 4: country is doing, then this is a really good way
Speaker 4: to say, well, I've got the top twenty the largest
Speaker 4: most liquid actively trade New Zealand stocks, So they're listed
Speaker 4: keyw companies and I've got the top twenty of those,
Speaker 4: and so therefore a slice of home where I am.
Speaker 4: I've got to spend my dollars here most of the
Speaker 4: time in terms of participating in the local economy. Then
Speaker 4: I've also got a portion of my portfolio that is
Speaker 4: invested in the local economy and those top twenty companies
Speaker 4: and how they are doing.
Speaker 2: So you put these out briefly on an early release,
Speaker 2: and then they're going to be traded I think from
Speaker 2: this week onwards. Yes, what sort of early indications did
Speaker 2: you get about what people like and why they like them?
Speaker 4: So we went out and we've done this time a
Speaker 4: pre application process. So we've partnered with shares E's. We
Speaker 4: also have MUFG as the registry of our listed ETFs
Speaker 4: and gone out with them as well to ask people
Speaker 4: if they've got interest in that. And then we've got
Speaker 4: our own intermediary channels around advisors, etc. Our most popular
Speaker 4: has been the US Tech, followed by the Gold, then
Speaker 4: Bitcoin and then the ends at Next twenty at this
Speaker 4: stage but actually a lot closer together than you might
Speaker 4: think in terms of that early interest, so we'll be
Speaker 4: really fascinating. That's the pre application process where people have
Speaker 4: signed up and said, yet when it goes live, I'd
Speaker 4: like some of that money with their mouth is yeah exactly.
Speaker 4: And then when we do go live and have them out,
Speaker 4: then they're obviously tradeable on the exchange. Are we interesting
Speaker 4: to see if that early level of largely retail investor
Speaker 4: interest stacks up as those ETFs are on the exchange
Speaker 4: and start to be actively traded.
Speaker 2: Are you using these ETFs as an investor to try
Speaker 2: and get that exposure, to get comfort with understanding how
Speaker 2: the market works and then moving on to something else,
Speaker 2: or do you see them as something that an investor
Speaker 2: could potentially hold as part of their portfolio right the
Speaker 2: way through.
Speaker 4: Both of those Actually, a lot of us might do
Speaker 4: the exactly there as you talk about that's my baby steps.
Speaker 4: So I actually believe in US tech or I believe
Speaker 4: in robotics, but I don't really know which of those
Speaker 4: companies in particular, but I do believe in that sector
Speaker 4: or that disegregated view of the market. So perfect way
Speaker 4: to enter that explore part of your portfolio to say
Speaker 4: I think I'm interested in that sector, so let's buy that,
Speaker 4: and I'm buying a basket of those stocks, and I'm
Speaker 4: now tracking that market. If that continues to go on
Speaker 4: and that's a particular area of interest for me, then
Speaker 4: I might find that there's one or two in there
Speaker 4: that I really like more than the others, and so
Speaker 4: I can hold them directly. By buying that stock directly
Speaker 4: doesn't necessarily mean I have to sell the ETF, because
Speaker 4: I've still got a whole market following bet. But I
Speaker 4: might want to say, actually, I like this one even more,
Speaker 4: and I think into the long run, I want to
Speaker 4: hold that too. But when we look off shore and
Speaker 4: to a lot of investors, when we think about wealthier
Speaker 4: individuals or people with a larger portfolios, a lot of
Speaker 4: people have now moved away from individual stockholding and actually
Speaker 4: hold a whole portfolio of ETF or FUN type structures.
Speaker 4: And that's not to say that they're the multi asset
Speaker 4: fun They've got all those individual building block components in there.
Speaker 4: But it just is a way that suits people to
Speaker 4: get a good diversified spread of everything that's going on,
Speaker 4: but still have from particular mars at all thematic feelings
Speaker 4: and beliefs within the book.
Speaker 2: So these four that you're launching, they feel going back
Speaker 2: to your core and explore idea. They feel very much
Speaker 2: part of the Explore side of things. This is people
Speaker 2: who are feeling a little bit more confident taking. Does
Speaker 2: that mean that you feel that people are at the
Speaker 2: stage where we've done all of the education around the
Speaker 2: core that we need.
Speaker 4: To definitely not and that's also part of our rebrand
Speaker 4: and that wise investmart This comes with a renewed commitment
Speaker 4: to do investor education. Really what it is it's about,
Speaker 4: do we as New Zealanders understand it enough about maths
Speaker 4: and money? And those of your two we go back.
Speaker 2: To the core, Well, the stats out of the schools
Speaker 2: would suggest horribly not yes, And I think that.
Speaker 4: We talk a lot about do we understand enough about maths?
Speaker 4: Probably not, as you said when you look at the scores,
Speaker 4: but also money kind of goes with maths, and if
Speaker 4: we put it together at the very basic form at
Speaker 4: the beginning, then those are some things that we can
Speaker 4: teach all of our children and everyone who's getting educated
Speaker 4: in New Zealand about simple things like compounding interest. If
Speaker 4: I put my dollar in now and that grows to
Speaker 4: a dollar twenty at the end of the year. Then
Speaker 4: next year, I've invested a dollar twenty and that grows
Speaker 4: proportionally more. You don't even have to do anything else
Speaker 4: apart from it continues to compound and pay the fees. Absolutely, yeah, absolutely,
Speaker 4: But that's a different view from I've invested my money
Speaker 4: and now I've made a profit, and I'm taking that
Speaker 4: out to spend on something else. So next year, I've
Speaker 4: still got the base dollar invested. Or I've invested my
Speaker 4: money and it pays dividends, but I'm going to take
Speaker 4: those dividends rather than reinvesting them. So everyone needs to
Speaker 4: make their own choice, depending on where they are in
Speaker 4: their life's journey and whether they need the income or
Speaker 4: the growth. But even the fact that not all of
Speaker 4: our kids understand the power of that compounding interest over time.
Speaker 2: Perhaps it's because people need that practical experience of actually
Speaker 2: putting some money on the line and seeing what it does.
Speaker 2: Because reading about these things and so on in the
Speaker 2: abstract is pretty dry. It's not until you've actually got
Speaker 2: some results to turning up or not turning up, and
Speaker 2: you're trying to ask questions about what happened there.
Speaker 4: Yeah, nothing like dollar in your pocket instead of a
Speaker 4: spreadshet in front of you. Completely agree, and I think
Speaker 4: that's been the power of online trading platforms and the
Speaker 4: power of what shares use has done in terms of
Speaker 4: retail space. But I also think that that's the power
Speaker 4: of what Kei we Saver has brought to And we're
Speaker 4: not there nearly yet right in terms of there being
Speaker 4: enough people making enough contributions for a good retirement and
Speaker 4: a dignified retirement, but actually on the way there. What
Speaker 4: it's meant is a whole lot more people are now
Speaker 4: interested in investing, and so instead of our somewhat traditional
Speaker 4: right yep, I buy a property and then that'll be
Speaker 4: my ticket to retirement. People are understanding and need to diversify,
Speaker 4: so I don't want all my eggs in one basket.
Speaker 4: And that's encouraged a whole lot more people to, as
Speaker 4: you say, get involved and actually feel it themselves and
Speaker 4: see it.
Speaker 2: I want to bring your partners in this ice is
Speaker 2: into the equation a little bit. You've talked about them before.
Speaker 2: Who who are I shares and why are you working
Speaker 2: with them on.
Speaker 4: This I Shares are owned by black Rock they're the
Speaker 4: one of the biggest fund managers in the world. I
Speaker 4: Shares is the part that runs a whole lot of
Speaker 4: their ETFs, and so why we've partnered with them is
Speaker 4: because they have a great global footprint in terms of
Speaker 4: the product set and the depth of their knowledge that
Speaker 4: they have out there. So we started talking to them
Speaker 4: about how do we do that in a local market.
Speaker 4: A lot of people have done this in other markets
Speaker 4: before us, and I always think you should look off
Speaker 4: shore to see what you can learn from that. But
Speaker 4: the common goal that we both had, which was around
Speaker 4: trying to make investment more accessible.
Speaker 2: What's in it for them? Why are they not just
Speaker 2: directly taking their exposure to the market here, Why come
Speaker 2: through smart?
Speaker 4: I think it's the balance of what we both bring
Speaker 4: to that relationship. So I think that this is a
Speaker 4: really good blend from our local smarts, if you will,
Speaker 4: about our customer and market knowledge in our local New
Speaker 4: Zealand market and their global breadth and depth. So why
Speaker 4: would they not come here and do it themselves. Well,
Speaker 4: technically they could, and this is a market that they
Speaker 4: need to open up. We're already established in that place.
Speaker 4: We are the local ETF manufacturer and we already have
Speaker 4: that customer presence in that connection and through the market,
Speaker 4: so we keep that local presence, that expertise, the feeling
Speaker 4: that we absolutely are connected to our local market, but
Speaker 4: we help leverage our expertise and amplify it in some
Speaker 4: areas by connecting into them. The other great thing they
Speaker 4: bring on a global platform basis is that they've done
Speaker 4: this in lots of other markets around the world. They
Speaker 4: have a huge library I like to call it of
Speaker 4: ETF investment knowledge and education, and we're really hoping that
Speaker 4: we are going to really do a good job of
Speaker 4: leveraging that.
Speaker 2: So they're effectively doing all of the tracking for you.
Speaker 4: Yes, So you know when we talked about the investors
Speaker 4: and said do you start here and then do you
Speaker 4: grow as you grow your portfolio and hold direct assets
Speaker 4: instead of a fund product kind of the same idea
Speaker 4: as a product manufacturer. So if you think about that
Speaker 4: product cycle, we've gone live with a product where we
Speaker 4: have wrapped their I shares, so we put our line
Speaker 4: local PI tax wrapper around it. We make sure that
Speaker 4: we're handling that for the US tech the currency hedging
Speaker 4: here and what that looks like because it's listed here
Speaker 4: in New Zealand dollars. But we've chosen to just wrap
Speaker 4: their product. So that's the single holding that our fund
Speaker 4: will have over time. As that grows, which we really
Speaker 4: hope it will do, then it gets to a point
Speaker 4: in size where we have other options to manage that fund,
Speaker 4: we might decide that actually it makes most efficient sense
Speaker 4: in terms of running that product and getting the best
Speaker 4: end result for investors in terms of the fee, that
Speaker 4: we will unwrap that I share and instead we will
Speaker 4: hold all of those assets ourselves directly. Our other choice
Speaker 4: when we get to that is that we can decide, yep,
Speaker 4: we want to run that ourselves locally, or sometimes what
Speaker 4: happens within any jurisdiction or New Zealand is you get
Speaker 4: to a certain size where you think, actually the size
Speaker 4: and scale of that and I want to partner with
Speaker 4: someone else who's going to run it for me under
Speaker 4: an investment management agreement.
Speaker 2: When you came into I think partly to consolidate here,
Speaker 2: I think you said, and to make some smart choices
Speaker 2: forty four E. Now is that a smart portfolio to
Speaker 2: be holding? Do you want to look at pruning back
Speaker 2: some of those and how might that look if that happen.
Speaker 4: How many is too many? How many is not enough?
Speaker 4: Very good question. So we are looking at what the
Speaker 4: economics of those look like, but also what our investors
Speaker 4: want to have in choice. If we go back to
Speaker 4: the core and explore, I think you always want to
Speaker 4: have a corset, and that's where we're heading to as well.
Speaker 4: And at the moment, those are probably ten to eleven
Speaker 4: funds that we think would be the core part of
Speaker 4: any investor's portfolio, and in fact would be the same
Speaker 4: universe of building blocks that we would choose when we
Speaker 4: put together our own ready made investment strategies in our
Speaker 4: diversified funds for Key we Savior or superannuation, etc.
Speaker 2: I'm going to guess that they look an awful lot
Speaker 2: like the top ten trades that Cheese's customers make, because
Speaker 2: we seem to exactly Yeah.
Speaker 4: So I think that although we might all think that
Speaker 4: we have a really different outset allocation or strategic as
Speaker 4: the allocation strategy, basically it all comes back to the
Speaker 4: same core. So those are really important to have. Then
Speaker 4: what you put around and your explore around the outside, well, yeah,
Speaker 4: that will change over time because there when we think
Speaker 4: about our job as a product manufacturer. We need to
Speaker 4: be providing product and choice to people, meeting the demand
Speaker 4: that people have. And that's not to say that those
Speaker 4: themes will run forever. So we need to look at
Speaker 4: how many people are invested in that fund, how much
Speaker 4: is it growing over time, is it still a really
Speaker 4: useful part of people's portfolios or not. So we will
Speaker 4: constantly go into that, and we're now talking about an
Speaker 4: annual product review cycle so that we can look at
Speaker 4: what new products need to come to market, where might
Speaker 4: there be consolidation in that, and which ones are just
Speaker 4: no longer used by people.
Speaker 2: So you might have a bit of a watch list there,
Speaker 2: but nothing's about to be cut us'.
Speaker 4: Absolutely not, because I think that when we think about
Speaker 4: pushing that new brand and talking about and really sharing
Speaker 4: that education and information, we do think that there's still
Speaker 4: some things in our forty four that we probably haven't
Speaker 4: well publicized or talked to people about, or talked about
Speaker 4: what the value proposition of those is. So we absolutely
Speaker 4: want to give ourselves a time and a roadway to
Speaker 4: do that and then to see what market feedback we
Speaker 4: get to help design what their end product set looks like.
Speaker 2: And it almost feels a bit much to be asking
Speaker 2: you when you're just launching these four, But I guess
Speaker 2: you see other stories and themes around, like infrastructure and
Speaker 2: the ability to invest in other kinds of sectors or
Speaker 2: industries that perhaps people can't certainly at the retailing get
Speaker 2: easy access to. Is there a place for ETFs there
Speaker 2: and is that something that you're considering.
Speaker 4: E bit Yes, both of those. I think there is
Speaker 4: a place for ETFs, and especially again when you look
Speaker 4: offshore and you look at alternative ETFs or some of
Speaker 4: the work that Singapore has done, say to encourage and
Speaker 4: how do you again make that more accessible or democratize
Speaker 4: it as people talk about, how do you bring some
Speaker 4: of those alternative asset structures to the wider retail market
Speaker 4: and do it in an easily digestible way. So we're
Speaker 4: looking at some of those as well.
Speaker 2: That's year two, is it.
Speaker 4: Yeah? If it was a month to two, my team
Speaker 4: would kill me. So yeah, definitely year two.
Speaker 2: Anna Scott, thank you so much for your time today.
Speaker 2: Thank you for listening and for watching. If you're on YouTube,
Speaker 2: you're catching us there. If you're listening, you're probably on Apple,
Speaker 2: Spotify or work.
Speaker 3: Now you can combine the experience of multiple fund managers
Speaker 3: and get even more diversification in your Chezy's Kiwisaber scheme.
Speaker 3: Select up to six base funds ranging from conservative to
Speaker 3: high growth to make at least fifty percent of your
Speaker 3: investment plan, and add your own picks on top. If
Speaker 3: you wish it's real choice multiplied. Head to Chezy's dot
Speaker 3: nz slash kisaber to get more info. Chezy's Investment Management
Speaker 3: Limited is the issuer of the Chaz's Kiwisaber Scheme. View
Speaker 3: the lodged product disclosure statement at Chezy's dot nz slash
Speaker 3: kisaber slash documents