Speaker 1: You're listening to a Shasise podcast. One thing I think
Speaker 1: that we think about when we think about active and
Speaker 1: passive is and this is why I continue to talk
Speaker 1: about index tracking, because if there's an index in a market,
Speaker 1: then that's what you're doing. In a passive fund, that's
Speaker 1: your job right to replicate. In mirror key, we Savor
Speaker 1: in New Zealand has really grown this area of interest
Speaker 1: in a diversified fund, so that has broad in new complexity.
Speaker 1: When you get into a diversified fund, anybody, regardless of
Speaker 1: whether you're using index tracking, building blocks or stock selection,
Speaker 1: you're making a active choice on how you build that
Speaker 1: diversified fund. And so that's where the line I think
Speaker 1: that blurs between passive and active. So, yes, it's smart.
Speaker 1: Do we have a bunch of index tracking etips? Absolutely
Speaker 1: we do. Do we also under the super Life brand
Speaker 1: that we're going to change to Smart, have diversified fund
Speaker 1: We have those two. You need extra acid allocation expertise
Speaker 1: to go into that, so give you a little bit
Speaker 1: more color, give you a little bit cost as well
Speaker 1: from the sound of it too. Absolutely, but that's where
Speaker 1: you get the extra expertise. So we talk about how
Speaker 1: risk tolerant. Are you you might be conservative or balanced
Speaker 1: or growth. With that becomes a pretty global standard way
Speaker 1: of thinking how you spread your assets for that. So
Speaker 1: a balance portfolio pretty traditionally is sixty percent in equities
Speaker 1: which are called growth assets, forty percent in bonds or
Speaker 1: fixed income or defensive stable assets. That's the worldwide acknowledged.
Speaker 1: You can chat GPT that and will tell you what
Speaker 1: your standard asset allocation is. Right. So from there, right,
Speaker 1: we've started at the top. We've got some growth, some stability.
Speaker 1: That's the balance. But underneath that you've got asset categories.
Speaker 1: You've got New Zealand equities, Australian equities, International, the Europe.
Speaker 1: You've got fixed income which comes into your stable. You've
Speaker 1: also got cash and increasingly you've got alternative assets, so
Speaker 1: you have to look at those in that. You've got commodities.
Speaker 1: We've talked about gold before as a great diversifier. You've
Speaker 1: got property that's become listed properly, become really popular and
Speaker 1: far more standard in terms of that. So you've got
Speaker 1: asset categories. Then what you do as a fund manager
Speaker 1: and say, right, well, if those are the core ingredients,
Speaker 1: what's my strategic acid allocation. So when I break down
Speaker 1: the sixty forty, how do I make that up? And
Speaker 1: in that zone, we're all making a decision about where
Speaker 1: our target waiting is in any of those asset categories
Speaker 1: and what our range is. So you set that'll be
Speaker 1: in the SIPO and that's what you're set with. But
Speaker 1: then within that you have tactical plays. So even though
Speaker 1: you might be labeled a passive fund manager, when you're
Speaker 1: buying a diversified fund that's growth or balanced, we're all
Speaker 1: making conscious choices around acid allocation. So here it's smart.
Speaker 1: When we choose our diversified fund, we will build that
Speaker 1: up with index tracking building blocks because we think that
Speaker 1: those are tracking the market and are a good lower
Speaker 1: cost alternative. So that's how we build it. But we
Speaker 1: still need to put that together and know how our
Speaker 1: acid l cation looks. If you're an active fund manager,
Speaker 1: you've got the same acid allocation that you're working on,
Speaker 1: but at the lower level of fund you might choose
Speaker 1: instead of having index tracking funds, you might choose to
Speaker 1: build it up via active stock selection, so you're picking
Speaker 1: individual names, individual companies to build, which is a little
Speaker 1: bit more intensive, but potentially gives you exposure to greater
Speaker 1: greater gain, but greater losses. Well yeah, and so there's
Speaker 1: a whole lot more onus there on doing the research,
Speaker 1: finding the right companies and doing that. The tricky thing
Speaker 1: for investors, I think with the diversified fund is there's
Speaker 1: no easy benchmark or index. So there's no global New
Speaker 1: Zealand based investor balanced risk profile, there's no index for that.
Speaker 1: So it's really hard to compare the performance of our
Speaker 1: diversified funds. And that's why it comes into league tables
Speaker 1: and why people constantly talk in that space around as
Speaker 1: your fund performing in the top quart aisle or not,
Speaker 1: and where does it rank versus its peers. But we're
Speaker 1: all going to be slightly different in our acid allocation
Speaker 1: that we've employed and the width of our ranges and
Speaker 1: where we can tactically tilt given market conditions. So we
Speaker 1: might hold more in cash right now, less in international equities,
Speaker 1: and we can do that because that's within an acid
Speaker 1: allocation guideline rather than very specifically having to track to
Speaker 1: there's no global common standard of what a diversified fund
Speaker 1: should look like. Investing involves risk. You might lose the
Speaker 1: money you start with we recommend talking to a licensed
Speaker 1: financial advisor. We also recommend reading product disclosure documents before
Speaker 1: deciding to invest