Speaker 1: Hello, and welcome to Shared Lunch, brought to you by ShaSS.
Speaker 1: My name is Sonia and I'm the co founder and
Speaker 1: co here share CS, and we're on a mission to
Speaker 1: create financial empowerment for everyone. Many people use ETFs or
Speaker 1: exchange traded funds as a defensive move with market volatility.
Speaker 2: For some, it also allows.
Speaker 1: Them to enter the market in a more accessible way. Today,
Speaker 1: I'm joined and hosted by Bryce from Equity Mates to
Speaker 1: discuss all things ETFs and what to consider.
Speaker 2: Before adding them to your portfolio.
Speaker 1: Before we get started, I'd like to acknowledge the traditional
Speaker 1: custodians of the land where we come to you from today,
Speaker 1: the Gettigill people of.
Speaker 2: The Aura nation, and pay respects to olders past and present.
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 recording.
Speaker 2: Welcome Brice, Thanks for having me excited to be here.
Speaker 1: Yeah, thanks for having us anytime. Yeah, So we digging
Speaker 1: into etifs. But before we get started, can you just
Speaker 1: what are.
Speaker 4: They whatf okay. So ETFs think of them like a
Speaker 4: It's a bundle of investments that you can buy in
Speaker 4: one on a stock exchange. The analogy that we like
Speaker 4: to use is traditionally, when you were to buy stocks,
Speaker 4: you would have to choose individual stocks and buy them
Speaker 4: individually on the stock exchange. You would buy a Commonwealth Bank,
Speaker 4: you'd buy Woolworths, you'd buy Telstra, for example, three investments,
Speaker 4: three individual holdings. Think of that like buying banana at
Speaker 4: wool is, apple and orange. Whereas now you can go
Speaker 4: in and you can buy the fruit salad, a bucket
Speaker 4: that has all the fruit cut up and in one
Speaker 4: in one purchase you can buy a bit of everything,
Speaker 4: and an ETF is just like that. You can buy
Speaker 4: a bit of Commonwealth, a bit of Telstra, a bit
Speaker 4: of Woolworth in one and trade it just like a
Speaker 4: stock on the Australian Stock Exchange or exchanges around the world.
Speaker 1: The other twom you're here and there with the etfss
Speaker 1: and mixes, can you tell us about how those two connect.
Speaker 4: So indexes are a way of measuring change. So you
Speaker 4: would baseline whatever you're trying to measure, and then the
Speaker 4: index will tell you how that has changed over time.
Speaker 4: In investing, the indexes are around the world a group
Speaker 4: of stocks that have been put together and then we
Speaker 4: measure the change in those stocks. So, for example, the
Speaker 4: ASEX two hundred is an index of the top largest
Speaker 4: two hundred stocks in Australia and the index then measures
Speaker 4: how that changes. You'll hear Alan Kohler on ABC News
Speaker 4: in Australia say that the ASEX two hundred is up
Speaker 4: two percent today. That means that that measure of all
Speaker 4: two hundred stocks has moved up two percent on average
Speaker 4: in value. How that relates to an ETF is that
Speaker 4: ETFs then come along and wrap that index all up
Speaker 4: and then you can buy that index and so you
Speaker 4: can buy all two hundred companies and effectively you can
Speaker 4: buy the change in the ASX two hundred over time.
Speaker 4: So index ETFs ETFs where what you are investing in
Speaker 4: is the underlying index that it tracks.
Speaker 1: Over the last week, while we've seen more of Aaronbistas
Speaker 1: putting money into ETFs over individual companies as something you've
Speaker 1: seen as well, you know, why do you think they might.
Speaker 2: Be the case?
Speaker 4: I mean, yeah, we've definitely seen it as part of
Speaker 4: the equitymates community. I even look at the way I've
Speaker 4: changed my investing strategy over the last sort of ten years,
Speaker 4: and it is very much now centered around a core
Speaker 4: ETF index philosophy. I think why that has has become
Speaker 4: I guess popular is because you know, back in the day,
Speaker 4: when you only had the ability to choose in vidual
Speaker 4: stocks or you had to choose fund managers to invest
Speaker 4: money on your behalf, it was really overwhelming, like I
Speaker 4: didn't really know what I was doing. Like I thought
Speaker 4: I was trying to be Warren Buffett and find you know,
Speaker 4: deep value companies, and you hear all these things about
Speaker 4: trying to find the hidden gem. But the reality is
Speaker 4: that as like an early stage investor, you have to
Speaker 4: do a lot of work to really be good at
Speaker 4: picking individual stocks and create a portfolio. And so it
Speaker 4: was I guess a major barrier to a lot of people.
Speaker 4: The I guess the inclusion or the entry of ETFs
Speaker 4: has made investing far more accessible for a lot of people. Also,
Speaker 4: they're super low cost. It doesn't cost a lot of
Speaker 4: money to invest in ETFs compared to having to invest
Speaker 4: in a fund manager back in the day. So probably
Speaker 4: accessibility and low cost a sort of the two biggest
Speaker 4: reasons I think that, Yeah, ETF's becoming a really popular choice.
Speaker 1: It's funny you say, like how you're investing, like behavior
Speaker 1: has changed over to time, because I definitely feel like
Speaker 1: I went through that too, where it's like kind of
Speaker 1: felt like I loved being able to do the company stuff,
Speaker 1: and then there came a time where I was like,
Speaker 1: wait a minute, I have a day job like this,
Speaker 1: And people often say, you know, like send your money
Speaker 1: to work when you're invested in, Like I kind of
Speaker 1: like that, like I don't have to micro manage it.
Speaker 2: Yes, I'll send.
Speaker 4: It to it investing it and it's hard. Is like
Speaker 4: money doing good for you while you don't have to
Speaker 4: do a lot, But you're right, like it takes a
Speaker 4: lot of time to sit down and actually be like,
Speaker 4: of all the money that I've just saved up, I've
Speaker 4: worked mine, you know, my whole life to have this
Speaker 4: pool of money. Do I really know what this individual
Speaker 4: company is doing against all of the other individual companies
Speaker 4: that I could invest in. So I think like the
Speaker 4: way that ETFs now allow you to invest just safely confidently,
Speaker 4: you know, there's a lot of advantages.
Speaker 1: You know, it kind of ties it nicely because it's like,
Speaker 1: who are ETFs good for?
Speaker 4: I would argue everyone, like even even you look at
Speaker 4: some of the best investors from around from around the world,
Speaker 4: and I'm talking like billion dollar hedge fund managers, and
Speaker 4: they have index ETFs in their portfolios because it's just
Speaker 4: because it's just such an easy way to make money.
Speaker 4: And I don't say that it's a given that you
Speaker 4: make money from them, but it's just it's such a
Speaker 4: beautiful mechanism to invest in the stock market without having
Speaker 4: to do a lot. So I think they're suitable for everyone,
Speaker 4: but I think to flip it around, their best for
Speaker 4: people who have worked hard for their money, know that
Speaker 4: they want to try and build wealth outside of just
Speaker 4: saving money in the bank account, but don't really feel
Speaker 4: like they have a whole lot of time or knowledge
Speaker 4: to invest in individual stocks. Because the reality is there
Speaker 4: are ETFs available these days that we call one stop
Speaker 4: shops where you can just choose one ETF that gives
Speaker 4: you global access to thousands of companies and you'd really
Speaker 4: just let that ride for forty years and you're going
Speaker 4: to be more than okay. So I think for beginners
Speaker 4: it's the best way to start, and then once you
Speaker 4: sort of start being a little bit more confident, there's
Speaker 4: different types of ETFs that you can start adding to
Speaker 4: your portfolio, depending on areas of the market that you're
Speaker 4: interested in or what your long term investment strategy is.
Speaker 4: But if someone turns around said ETFs are not for me,
Speaker 4: then I would really challenge them on why that is,
Speaker 4: because the data shows that, as I said, over the
Speaker 4: long time, you can create a very healthy portfolio just
Speaker 4: through index investing.
Speaker 1: Is any disadvantages that you see, maybe not disadvantages, but
Speaker 1: like some misconceptions perhaps Oh yeah, A lot of people.
Speaker 4: Think that any ETF is set and forget, And what
Speaker 4: I mean by that is index ETFs, which we've spoken about,
Speaker 4: you are very much bottom draw investments. You can put
Speaker 4: money in the ASX two hundred and really you could
Speaker 4: just keep adding to that over a long period of
Speaker 4: time and not have to really worry about doing much
Speaker 4: with that ETF because the way it works is it
Speaker 4: will change the companies within those two hundred just by
Speaker 4: nature of how the market works. But a lot of
Speaker 4: people then take that sort of concept of set and
Speaker 4: forget and bottom draw and put it to thematic ETFs,
Speaker 4: or ETFs that have a leverage tilt to them, or
Speaker 4: ETFs that actively managed for example. And so if you're
Speaker 4: buying a thematic ETF, which might be an ETF that
Speaker 4: invests in AI companies or an ETF that invests in
Speaker 4: defense companies, or thematics that are sort of the here
Speaker 4: and now, if you put that in the bottom drawer,
Speaker 4: thinking that something you can invest in forever, then you're
Speaker 4: effectively making a bet that that thematic is going to
Speaker 4: be a forty year thematic. And so people can go
Speaker 4: wrong thinking any ETF is a set and figet So
Speaker 4: I would just caution that that is probably with the
Speaker 4: biggest misconception or not disadvantage, but misconception that we see
Speaker 4: and maybe not a disadvantage. But there are now so
Speaker 4: many ETFs available as well, like there can be a
Speaker 4: feeling of ETF overload or overwhelmed when it comes to
Speaker 4: trying to pick it. So I'm sure we'll get into
Speaker 4: how to pick them, but yeah, it can feel confusing.
Speaker 2: Can you be too diversified?
Speaker 4: You can have too many ETFs? I think, because what
Speaker 4: you'll start finding is, you know, given that so many
Speaker 4: of them have hundreds if not thousands of companies, you'll
Speaker 4: start just overlapping. And what that means is you might
Speaker 4: find the top ten holdings of one ETF are very
Speaker 4: similar to the top ten of another, and very similar
Speaker 4: to the top ten of another, And there's nothing wrong
Speaker 4: with that, Like you're still invested, but you could be
Speaker 4: consolidated and a little bit more simplified. And if you
Speaker 4: have too many stocks, you've got to really ask yourself,
Speaker 4: what are you really trying to achieve? Yeah, so I
Speaker 4: don't want to put people off, but yeah, you you
Speaker 4: can have an overlap.
Speaker 1: And so let's check thematics. Because you've brought that up.
Speaker 1: What role do themetics play?
Speaker 4: They're probably one of the more hotter spaces in ETFs
Speaker 4: at the moment. Like the first things to kind of
Speaker 4: come to market was through Vanguard, which was the index investing.
Speaker 4: Let's just get access to the ASEX two hundred s
Speaker 4: and P five hundred, which is the top five hundred
Speaker 4: in the US, the foot see which is the top
Speaker 4: companies over in the UK. And then people sort of thought,
Speaker 4: this is a really great way to invest in a
Speaker 4: whole lot of stocks without really having to do a lot.
Speaker 4: Why don't we bucket up stocks that center around a
Speaker 4: particular theme, and so you'll see gold miners, for example,
Speaker 4: as an ETF thematic, or you'll see, as I said,
Speaker 4: AI semiconductors are a huge one at the moment given
Speaker 4: what's going on overseas. As I said, defense spending is
Speaker 4: a massive one cryptocurrency. There's been all sorts of like
Speaker 4: trends where ETF providers have come a long and wrapped
Speaker 4: up companies and created an ETF. So that's a thematic
Speaker 4: ETF where all of the companies sort of follow one theme.
Speaker 4: The positives of that are that again I can go
Speaker 4: in and be like, I'm super bullish on semiconductors, but
Speaker 4: I really don't have the understanding all the time to
Speaker 4: go and choose the best semiconductor stock. I want just
Speaker 4: access to the best twenty and for me, an ETF
Speaker 4: is the best way to do that. And so you
Speaker 4: could put that in your portfolio as a smaller percentage
Speaker 4: on top of your core and that's one way to
Speaker 4: get access to that thematic. The danger of that, as
Speaker 4: I said, is that that thematic you still need to
Speaker 4: pay attention to. Because I've been in plenty I got
Speaker 4: on I thought the legalization of marijuana, for example, over
Speaker 4: in the States was talked up and hyped and thought
Speaker 4: this was going to be the next biggest thing. There
Speaker 4: were ETFs that gave exposure to all of the marijuana
Speaker 4: producers and retailers over in the States, but that's been
Speaker 4: an absolute flop. And if you weren't paying attention to
Speaker 4: that thematic, if you put it into your bottom drawn you,
Speaker 4: then you would have, you know, probably lost a lot
Speaker 4: of money. And so thematics are a great way to
Speaker 4: get broader exposure to I guess a trend or a fad,
Speaker 4: but it comes with caution that they're not something that's
Speaker 4: going to last forever.
Speaker 2: How do you choose what etifs to envisten?
Speaker 4: It firstly comes down to and this is a classic
Speaker 4: answer which I actually hate when other people tell.
Speaker 2: Me, but it depends, It depends what.
Speaker 4: It depends what your goals are to begin with, and
Speaker 4: then from there you can kind of work things out.
Speaker 4: So if your goal, for example, is to just put
Speaker 4: your money to work and never have to pick a stock,
Speaker 4: and you just want one thing to invest in, then
Speaker 4: that kind of tells you all. I need to find
Speaker 4: an ETF that gives me that functionality that is, gives
Speaker 4: me the opportunity to buy a lot of stuff around
Speaker 4: the world very cheaply, and so you can kind of
Speaker 4: will search to find that out. There are plenty of examples.
Speaker 4: But if that's the goal, then there's a universe of
Speaker 4: ETFs that suit that. If the goal is I want
Speaker 4: to create a core portfolio that tracks index products, but
Speaker 4: I want to create the portfolio myself, then you say, okay, well,
Speaker 4: now I have a universe of stocks where I need
Speaker 4: to find, you know, index ETFs that are particular to countries,
Speaker 4: and so you can sort of filter that way. If
Speaker 4: your goal is I only want to invest in the
Speaker 4: hottest themes around the world, I don't care about just
Speaker 4: investing in Australia or whatever, then there's ETFs that will
Speaker 4: probably track your theme. So like starting with like how
Speaker 4: like your goal what it is you want to be
Speaker 4: investing in, can kind of figure it out. But from
Speaker 4: there there are a few small things like looking at
Speaker 4: the provider or the the the ETF whereah, the ETF
Speaker 4: provider like some big names in Australia. You've got Vanguard,
Speaker 4: You've got Beta shares, You've got black Rock or I shares,
Speaker 4: that they have a huge range of ETFs available and
Speaker 4: all sort of do different things. So starting there, and
Speaker 4: they all have very good transparent information on their websites
Speaker 4: where you can I would recommend always going and starting
Speaker 4: at their websites to find out everything you need to
Speaker 4: know about that ETF.
Speaker 2: Yeah, so there are.
Speaker 1: Like the same funds that check the same indixes and
Speaker 1: so that you've got a range of options. What's the
Speaker 1: kind of if you're reading the information, what are the
Speaker 1: key things to look for to try and decipher whether
Speaker 1: you want to go for this, Like I said, a
Speaker 1: provider of an et if over or very different.
Speaker 4: One good question. So let's take the S and P.
Speaker 4: Let's take ASEX two hundred, which is the Australian top
Speaker 4: two hundred. So Beta shares have one pretty sure I
Speaker 4: Shares Vanguard have a sort of equivalent. But let's say
Speaker 4: that there's three providers. The first thing is that at
Speaker 4: the end of the day, don't get worked up on
Speaker 4: just like the minuture of it all you through all
Speaker 4: three of them, you are buying the same thing, which
Speaker 4: is the top two hundred companies in Australia. Beta shares
Speaker 4: is not going to change theirs or VANDGUARD is not
Speaker 4: going to change theirs. They all have to follow the
Speaker 4: same index methodology and so you're not going to get
Speaker 4: anything different in terms of the underlying assets. So don't
Speaker 4: feel like one is like worse off than the other.
Speaker 4: Where you really can differentiate for us is the price
Speaker 4: and not so is the cost of the ETF, not
Speaker 4: the share price, because the share prices will all be
Speaker 4: different and it has no bearing on anything. But it's
Speaker 4: actually the underlying management fee of the ETF, and you
Speaker 4: can find that information on the website. It's often called
Speaker 4: a management expense ratio MEER, or it's just going to
Speaker 4: say management fee. If if all three of them, you're
Speaker 4: getting access to the same investments. For me, it's like
Speaker 4: pay as cheap as possible. Yeah.
Speaker 2: Yeah, that's a great point.
Speaker 1: And I loved your point at the start around like
Speaker 1: they're all invested on the same thing, you know, don't.
Speaker 2: Kind of get too caught up. But your point on
Speaker 2: fees is really imporant.
Speaker 4: Yeah, I think you can get overwhelmed with trying to
Speaker 4: find like the perfect ETF. But as I said, like firstly,
Speaker 4: what are you trying to do. I'm trying to get
Speaker 4: access to this train market. If you're paying a percentage
Speaker 4: of zero point zero four and the next the one
Speaker 4: next door is zero point zero three, like, it really
Speaker 4: doesn't matter that much. It's like only if the one
Speaker 4: up the road was paying one percent or whatever. But yeah,
Speaker 4: I think you can get overwhelmed, and especially with ETFs
Speaker 4: as well, like you can always sell it and move
Speaker 4: to another one if you find later on that there's
Speaker 4: another one that is actually better and suits your needs.
Speaker 4: That's exactly what I've done. I've sold in and out
Speaker 4: until I've found the right mix for my core portfolio,
Speaker 4: and now I'm really happy with it. So I think
Speaker 4: it's not like a once you're in, you're locked in.
Speaker 4: Just get in and you'll kind of figure it out.
Speaker 1: You know, are there any other kind of ways that
Speaker 1: etif's fit in is your overall portfolio?
Speaker 4: I have dabbled and sort of do dabble on the
Speaker 4: matic side a little bit more than I think others might.
Speaker 4: You know, if I think that Bitcoin's going to have
Speaker 4: a good run, or if I think that you know,
Speaker 4: the you know, Liberation Day was a good example actually
Speaker 4: short at the nasdak over a period of time and
Speaker 4: did well out of that but you kind of really
Speaker 4: need to have an understanding of what is going on
Speaker 4: and pay very very close attention if you start playing
Speaker 4: that short term game like it's just I think fundamentally
Speaker 4: trying to time the market is just not the right
Speaker 4: thing to be doing at all. You can have a
Speaker 4: little bit of fun with it on the side, but
Speaker 4: as I said, I can do that knowing eighty percent
Speaker 4: of my core my portfolio is sitting in core. So yeah,
Speaker 4: I think the matics play that part.
Speaker 2: Are there any other trends that you're seeing.
Speaker 4: We're seeing a lot of active ETFs starting to come
Speaker 4: And what I mean by that is traditionally, if you
Speaker 4: were not investing in individual stocks, you could have gone
Speaker 4: to fund managers and given them your money and they
Speaker 4: would run a folio of companies. Traditionally, that was a
Speaker 4: very expensive way to invest because they would charge you
Speaker 4: a high percentage on what you're investing. They'd also charge
Speaker 4: you management fees, and it was all pretty opaque and
Speaker 4: you didn't really know what they were investing in. They
Speaker 4: kind of just said, this is what we've done for
Speaker 4: you this year. And because of the rise of ETFs,
Speaker 4: these fund managers are now saying, well, we want to
Speaker 4: be able to get access to a lot of the
Speaker 4: trends that are happening in the ATF space, So why
Speaker 4: don't we turn our funds into ETFs. And so the
Speaker 4: good thing with that is we can now access some
Speaker 4: of the best fund managers around the world. And I'm
Speaker 4: talking fund managers that traditionally work for like Ultra high
Speaker 4: net worths, JP Morgans, Black Rocks, Fidelities. These are like
Speaker 4: multi trillion dollar investment banks. They are now listing their
Speaker 4: investment strategies as ETFs on the Australian Stock Exchange. So
Speaker 4: I can go and give my money to JP Morgan
Speaker 4: and let them run their global fund managers, or I
Speaker 4: can go to Fidelity and get them to invest in
Speaker 4: their small cap fund. So what it's done is it's
Speaker 4: like opened up a world of opportunity to invest in
Speaker 4: some of the best fund managers, which sounds cool and
Speaker 4: it is cool. The thing you need to remember is
Speaker 4: that a lot of them, an overwhelming amount of fund managers,
Speaker 4: actually struggle to beat what we call the benchmark, which
Speaker 4: is just those underlying index ETFs. And so you need
Speaker 4: to be very careful on who you're giving your money
Speaker 4: to or which active ETFs you're choosing because if they
Speaker 4: can't beat the ASX two hundred or the S and
Speaker 4: P five hundred, you may as well just be going
Speaker 4: with the index. So that's a huge trend we're seeing.
Speaker 4: We're seeing a lot of companies come out and sort
Speaker 4: of create differentiated ETFs. You might get access now to
Speaker 4: commodities that we may never have been able to access.
Speaker 4: You can buy gold ETFs. You can buy that give
Speaker 4: you access to all different asset classes as well property, crypto,
Speaker 4: So they've really opened up the investment universe.
Speaker 2: What about smart beta etifs.
Speaker 4: So smart beta is something that's very new here in Australia.
Speaker 4: There's only a handful and they are the big players Macquarie,
Speaker 4: JP etc. We're actually looking at them this morning and
Speaker 4: I think they have a great role to play. So
Speaker 4: what they are is like think about the ASEX two
Speaker 4: hundred index. It is based and ranked by the top
Speaker 4: two hundred in terms of the value of the company.
Speaker 4: The most valuable company BHP or Commonwealth sits at the
Speaker 4: top all the way down to the two hundredth most
Speaker 4: valuable and then that changes automatically as the stocks move around.
Speaker 4: What a beta ETF does is they will take that
Speaker 4: two hundred and then they'll say, we're going to slightly
Speaker 4: tweak a few stocks in there so that we should
Speaker 4: be able to get a little bit better performance than
Speaker 4: if you were to just in in the top two hundred. Now, again,
Speaker 4: you're backing in a manager or you're backing in a
Speaker 4: system to do that. But I mean some data we're
Speaker 4: looking out this morning shows that it does work, and
Speaker 4: it gives you access to different styles of investing as well.
Speaker 4: You might have heard of value investing, you might have
Speaker 4: heard of momentum, you might have heard of Well, I
Speaker 4: guess those are two sort of key ones, and these
Speaker 4: ETFs sort of put those investment strategies over the top
Speaker 4: of these big, sort of core index products. So again,
Speaker 4: need to know what you're investing in and why. But
Speaker 4: it's a new trend that we're starting to see from
Speaker 4: some of the big players. Yeah.
Speaker 2: Cool. And then coming back to your point when you
Speaker 2: were talking about.
Speaker 1: The act of investors playing a role like an analogy
Speaker 1: that we use it and there is because there are
Speaker 1: people doing a job in the mix of it, which
Speaker 1: is why the management fees exist. And we're kind of
Speaker 1: liken it to like whether you just check on a
Speaker 1: playlist at a party.
Speaker 2: Or get a d J.
Speaker 1: You know, it's like there is someone doing something like
Speaker 1: there is you know, like the indix's checking, say, to filters,
Speaker 1: or the ETF is checking to filters, or is this
Speaker 1: is someone who's actually like looking at this making this decision.
Speaker 1: And to your point, sometimes it doesn't necessarily lead to
Speaker 1: bitter decision making, but sometimes it does. I do you
Speaker 1: have a view on management fees or yea.
Speaker 5: I can try to think back to the analogy because
Speaker 5: I like DJing as well, and it's kind of like
Speaker 5: you would pay for a DJ because you would expect
Speaker 5: the DJ to get the dance floor going better and
Speaker 5: if you just exactly then if you just played the playlist.
Speaker 4: But it's not. But the risk is that you pay
Speaker 4: this DJ all this money and that they actually sucked
Speaker 4: at reading the room. In investments, it's the same thing.
Speaker 4: You could pay this manager all this money because you
Speaker 4: think they're going to do better than just buying the
Speaker 4: top two hundred, and in actual fact they've misread the
Speaker 4: room and continuously underperform and clear the dance floor night
Speaker 4: after night after night. So I don't have a problem
Speaker 4: with paying for it, but as long as you're getting
Speaker 4: bang for your buck, really, and what that means is
Speaker 4: as long as you're getting a better outcome than if
Speaker 4: a you couldn't do it yourself, but b if it
Speaker 4: is actually better than investing in low cost index ETFs.
Speaker 4: I have one managed fund that I use, and they
Speaker 4: charge a one point five management fee one point five percent,
Speaker 4: which in these day and age is quite high. But
Speaker 4: that is for a small cap manager for global small
Speaker 4: cap funds for small cap companies. And that's an area
Speaker 4: of the market that I know I will never have
Speaker 4: expertise in and I will never have the time to
Speaker 4: scour for the largest manufacturer of door hinges in Norway.
Speaker 2: And there's also not a lot of like analyst coverage.
Speaker 3: Door handle exactly.
Speaker 4: Yeah, And I'm just like, I will never be able
Speaker 4: to play in that game, but I and so I'm
Speaker 4: prepared to pay a higher fee to get that expertise
Speaker 4: as long as they show that they can continuously deliver
Speaker 4: good performance. What I'm not prepared to pay for is
Speaker 4: someone to say I'm going to actively manage the top
Speaker 4: ASX two hundred because the reality is statistically only fifteen
Speaker 4: percent of fund managers can do better than if I
Speaker 4: was just to buy the entire index myself, and so
Speaker 4: then I have to try and find the fifteen percent
Speaker 4: that can beat it, Choose one of them and hope
Speaker 4: that they can continue to do it. So don't be
Speaker 4: scared of high fees. You'll often find thematic ETFs have
Speaker 4: higher fees, and to your point, it's because people actually
Speaker 4: doing things there. They're creating the ETFs, they're managing the
Speaker 4: underlying system making decisions. So it doesn't mean that it's bad,
Speaker 4: but if you're paying a high fee, you need to
Speaker 4: have an expectation that you're going to get your money's worth.
Speaker 1: Yeah, it's like one of the first because we've got
Speaker 1: some managed funds on the platform on Cheesy's and one
Speaker 1: of the first ones we had was.
Speaker 2: As a responsible envestment manager, and.
Speaker 1: That's one of those where it's actually like really hard
Speaker 1: to get good information about response and it means something
Speaker 1: different to everyone. So it's like, actually, use is a
Speaker 1: management fee there, but someone's doing that work, and that
Speaker 1: work is actually really hard.
Speaker 4: To do, and particularly in that space, to your point,
Speaker 4: very hard to do. Like responsible investing can mean a
Speaker 4: thousand different things, and the opaqueness in that industry alone, well,
Speaker 4: in that investment sort of universe, you've got to be
Speaker 4: very clear on and your research needs to be so thorough.
Speaker 4: But that you know, paying someone to do that for you,
Speaker 4: you know, I think sort of makes sense.
Speaker 1: So before we kind of close out on ETFs, what's
Speaker 1: one thing you'd love people to know?
Speaker 4: I think there's one. There's something for everyone. Is the
Speaker 4: main thing, And no matter where you are on your
Speaker 4: investing journey, like ETF should or could play a very
Speaker 4: big part in your portfolio. But if you are in
Speaker 4: that early stage and you are feeling confused and overwhelmed
Speaker 4: with where to start. You don't want to be picking
Speaker 4: individual company, you don't want to be picking individual stocks,
Speaker 4: then this is the world to be playing in, and
Speaker 4: that you can have a very very successful investing journey
Speaker 4: by only investing in one or two ets that just
Speaker 4: track global stock markets, because at the end of the day,
Speaker 4: like the returns that that gives statistically is more than
Speaker 4: enough to build a healthy portfolio and far better than
Speaker 4: a lot of the professionals can do. So if you're
Speaker 4: feeling like you want to get started, then then this
Speaker 4: is absolutely the place to be playing yeah, yeah, fair enough.
Speaker 1: And then so what's coming up for you, what's exciting
Speaker 1: you at the moment, and what sneaks for equity makes
Speaker 1: our goal?
Speaker 4: Our mission is just to continue educating as many people
Speaker 4: as possible about how you can build wealth in the
Speaker 4: stock market. You don't know, if you're feeling priced out
Speaker 4: of property, if you're feeling like overwhelmed and you're feeling
Speaker 4: like you're behind, I think, a you're probably not, but
Speaker 4: and there a lot of other people sort of feeling
Speaker 4: like that, but be there are ways that you can
Speaker 4: start feeling more confident with what you're doing. And so
Speaker 4: I guess our mission is really just to continue doing that,
Speaker 4: continue growing reaching all different people across Australia in as
Speaker 4: many ways as possible. We've got our two main shows
Speaker 4: that we think sort of no matter where you are
Speaker 4: on your investing journey will cater for you. So yeah,
Speaker 4: that's what's next. I would love to say that we've
Speaker 4: got global expansion plans or something like that, but really
Speaker 4: it's just to continue doing what we're doing and trying
Speaker 4: to educate as many as strands as possible about the
Speaker 4: power of building wealth and stock market.
Speaker 1: Yeah awesome, Well thanks hes for chatting, and thanks for
Speaker 1: hosting us here anytime.
Speaker 4: Welcome back to Got the Lights. Yeah that was fun.
Speaker 4: I really enjoyed it.
Speaker 2: Thanks everyone for tuning in.
Speaker 1: You can watch your lunch on YouTube or follow along
Speaker 1: on your favorite podcast step leave us some message about
Speaker 1: what you'd like to hear about Nicks.
Speaker 2: See you next time.
Speaker 1: M m m mmm