1 00:00:01,000 --> 00:00:04,720 Speaker 1: You're listening to a Shasise podcast. One thing I think 2 00:00:04,760 --> 00:00:07,600 Speaker 1: that we think about when we think about active and 3 00:00:07,640 --> 00:00:09,640 Speaker 1: passive is and this is why I continue to talk 4 00:00:09,640 --> 00:00:12,600 Speaker 1: about index tracking, because if there's an index in a market, 5 00:00:12,640 --> 00:00:14,920 Speaker 1: then that's what you're doing. In a passive fund, that's 6 00:00:14,960 --> 00:00:18,640 Speaker 1: your job right to replicate. In mirror key, we Savor 7 00:00:18,640 --> 00:00:21,480 Speaker 1: in New Zealand has really grown this area of interest 8 00:00:21,520 --> 00:00:27,040 Speaker 1: in a diversified fund, so that has broad in new complexity. 9 00:00:27,120 --> 00:00:31,040 Speaker 1: When you get into a diversified fund, anybody, regardless of 10 00:00:31,040 --> 00:00:34,400 Speaker 1: whether you're using index tracking, building blocks or stock selection, 11 00:00:35,000 --> 00:00:38,640 Speaker 1: you're making a active choice on how you build that 12 00:00:38,680 --> 00:00:41,560 Speaker 1: diversified fund. And so that's where the line I think 13 00:00:41,560 --> 00:00:44,560 Speaker 1: that blurs between passive and active. So, yes, it's smart. 14 00:00:44,560 --> 00:00:47,520 Speaker 1: Do we have a bunch of index tracking etips? Absolutely 15 00:00:47,560 --> 00:00:50,280 Speaker 1: we do. Do we also under the super Life brand 16 00:00:50,280 --> 00:00:53,080 Speaker 1: that we're going to change to Smart, have diversified fund 17 00:00:53,360 --> 00:00:56,520 Speaker 1: We have those two. You need extra acid allocation expertise 18 00:00:56,560 --> 00:00:58,360 Speaker 1: to go into that, so give you a little bit 19 00:00:58,400 --> 00:01:00,800 Speaker 1: more color, give you a little bit cost as well 20 00:01:00,800 --> 00:01:03,200 Speaker 1: from the sound of it too. Absolutely, but that's where 21 00:01:03,240 --> 00:01:05,880 Speaker 1: you get the extra expertise. So we talk about how 22 00:01:06,080 --> 00:01:08,800 Speaker 1: risk tolerant. Are you you might be conservative or balanced 23 00:01:08,880 --> 00:01:13,080 Speaker 1: or growth. With that becomes a pretty global standard way 24 00:01:13,160 --> 00:01:16,440 Speaker 1: of thinking how you spread your assets for that. So 25 00:01:16,560 --> 00:01:20,959 Speaker 1: a balance portfolio pretty traditionally is sixty percent in equities 26 00:01:21,360 --> 00:01:25,000 Speaker 1: which are called growth assets, forty percent in bonds or 27 00:01:25,040 --> 00:01:29,880 Speaker 1: fixed income or defensive stable assets. That's the worldwide acknowledged. 28 00:01:29,959 --> 00:01:31,840 Speaker 1: You can chat GPT that and will tell you what 29 00:01:31,880 --> 00:01:35,200 Speaker 1: your standard asset allocation is. Right. So from there, right, 30 00:01:35,200 --> 00:01:37,960 Speaker 1: we've started at the top. We've got some growth, some stability. 31 00:01:38,200 --> 00:01:41,320 Speaker 1: That's the balance. But underneath that you've got asset categories. 32 00:01:41,480 --> 00:01:45,360 Speaker 1: You've got New Zealand equities, Australian equities, International, the Europe. 33 00:01:45,440 --> 00:01:48,080 Speaker 1: You've got fixed income which comes into your stable. You've 34 00:01:48,080 --> 00:01:51,800 Speaker 1: also got cash and increasingly you've got alternative assets, so 35 00:01:51,840 --> 00:01:54,559 Speaker 1: you have to look at those in that. You've got commodities. 36 00:01:54,680 --> 00:01:58,200 Speaker 1: We've talked about gold before as a great diversifier. You've 37 00:01:58,200 --> 00:02:02,160 Speaker 1: got property that's become listed properly, become really popular and 38 00:02:02,280 --> 00:02:04,120 Speaker 1: far more standard in terms of that. So you've got 39 00:02:04,160 --> 00:02:06,920 Speaker 1: asset categories. Then what you do as a fund manager 40 00:02:06,960 --> 00:02:09,240 Speaker 1: and say, right, well, if those are the core ingredients, 41 00:02:09,639 --> 00:02:12,480 Speaker 1: what's my strategic acid allocation. So when I break down 42 00:02:12,480 --> 00:02:15,120 Speaker 1: the sixty forty, how do I make that up? And 43 00:02:15,160 --> 00:02:18,679 Speaker 1: in that zone, we're all making a decision about where 44 00:02:18,760 --> 00:02:21,800 Speaker 1: our target waiting is in any of those asset categories 45 00:02:21,840 --> 00:02:24,519 Speaker 1: and what our range is. So you set that'll be 46 00:02:24,560 --> 00:02:27,680 Speaker 1: in the SIPO and that's what you're set with. But 47 00:02:27,800 --> 00:02:31,120 Speaker 1: then within that you have tactical plays. So even though 48 00:02:31,160 --> 00:02:34,000 Speaker 1: you might be labeled a passive fund manager, when you're 49 00:02:34,080 --> 00:02:38,520 Speaker 1: buying a diversified fund that's growth or balanced, we're all 50 00:02:39,000 --> 00:02:43,360 Speaker 1: making conscious choices around acid allocation. So here it's smart. 51 00:02:43,400 --> 00:02:47,000 Speaker 1: When we choose our diversified fund, we will build that 52 00:02:47,120 --> 00:02:50,280 Speaker 1: up with index tracking building blocks because we think that 53 00:02:50,320 --> 00:02:54,440 Speaker 1: those are tracking the market and are a good lower 54 00:02:54,480 --> 00:02:57,040 Speaker 1: cost alternative. So that's how we build it. But we 55 00:02:57,120 --> 00:02:59,520 Speaker 1: still need to put that together and know how our 56 00:02:59,520 --> 00:03:02,320 Speaker 1: acid l cation looks. If you're an active fund manager, 57 00:03:02,520 --> 00:03:05,240 Speaker 1: you've got the same acid allocation that you're working on, 58 00:03:05,320 --> 00:03:07,760 Speaker 1: but at the lower level of fund you might choose 59 00:03:07,800 --> 00:03:10,160 Speaker 1: instead of having index tracking funds, you might choose to 60 00:03:10,200 --> 00:03:13,720 Speaker 1: build it up via active stock selection, so you're picking 61 00:03:13,840 --> 00:03:16,919 Speaker 1: individual names, individual companies to build, which is a little 62 00:03:16,919 --> 00:03:19,440 Speaker 1: bit more intensive, but potentially gives you exposure to greater 63 00:03:20,560 --> 00:03:23,480 Speaker 1: greater gain, but greater losses. Well yeah, and so there's 64 00:03:23,480 --> 00:03:26,560 Speaker 1: a whole lot more onus there on doing the research, 65 00:03:26,639 --> 00:03:29,120 Speaker 1: finding the right companies and doing that. The tricky thing 66 00:03:29,160 --> 00:03:31,720 Speaker 1: for investors, I think with the diversified fund is there's 67 00:03:31,760 --> 00:03:36,040 Speaker 1: no easy benchmark or index. So there's no global New 68 00:03:36,160 --> 00:03:40,400 Speaker 1: Zealand based investor balanced risk profile, there's no index for that. 69 00:03:41,160 --> 00:03:43,840 Speaker 1: So it's really hard to compare the performance of our 70 00:03:43,880 --> 00:03:46,600 Speaker 1: diversified funds. And that's why it comes into league tables 71 00:03:46,920 --> 00:03:51,320 Speaker 1: and why people constantly talk in that space around as 72 00:03:51,360 --> 00:03:53,600 Speaker 1: your fund performing in the top quart aisle or not, 73 00:03:53,920 --> 00:03:56,520 Speaker 1: and where does it rank versus its peers. But we're 74 00:03:56,520 --> 00:03:59,640 Speaker 1: all going to be slightly different in our acid allocation 75 00:03:59,680 --> 00:04:02,240 Speaker 1: that we've employed and the width of our ranges and 76 00:04:02,280 --> 00:04:05,840 Speaker 1: where we can tactically tilt given market conditions. So we 77 00:04:05,920 --> 00:04:09,640 Speaker 1: might hold more in cash right now, less in international equities, 78 00:04:10,120 --> 00:04:12,400 Speaker 1: and we can do that because that's within an acid 79 00:04:12,440 --> 00:04:16,240 Speaker 1: allocation guideline rather than very specifically having to track to 80 00:04:16,480 --> 00:04:20,039 Speaker 1: there's no global common standard of what a diversified fund 81 00:04:20,000 --> 00:04:22,839 Speaker 1: should look like. Investing involves risk. You might lose the 82 00:04:22,839 --> 00:04:25,560 Speaker 1: money you start with we recommend talking to a licensed 83 00:04:25,600 --> 00:04:30,080 Speaker 1: financial advisor. We also recommend reading product disclosure documents before 84 00:04:30,080 --> 00:04:31,040 Speaker 1: deciding to invest