Speaker 1: You're listening to a sharseise podcast.
Speaker 2: I saw some research out of the UK that said
Speaker 2: that anyone over fifty five, you ask three of them
Speaker 2: about atfs, only one of them is going to have
Speaker 2: heard of those. You ask anyone under thirty four, and
Speaker 2: probably like ninety percent or more will be able to
Speaker 2: tell you what an ETF is. Is there a consistent
Speaker 2: picture that you find and your practice and around the world, Yeah.
Speaker 1: I think so. Yeah, Yeah, I think that's pretty consistent globally,
Speaker 1: And honestly, I think it's driven by one really key
Speaker 1: thing in particular, and that is the demographics around those
Speaker 1: different age groups. So you know, it's quite likely for
Speaker 1: anyone over fifty five that they've been pretty lucky to
Speaker 1: be a property owner in a period where property has
Speaker 1: done extremely well. For people under thirty five, it's very
Speaker 1: hard to get on the property ladder in in most
Speaker 1: property markets globally because price has gone up so much,
Speaker 1: lending has got harder, or borroing's got harder, should say,
Speaker 1: And so you know that there is a whole cohort
Speaker 1: of people now coming through in that age group, under
Speaker 1: a thirty five age group, who are really looking for
Speaker 1: other ways to grow their wealth, and ETFs play a
Speaker 1: big role in that.
Speaker 2: The research that I saw suggested that the kinds of
Speaker 2: people I mean it literally said, it's like a young
Speaker 2: guys game, overwhelming the demographic in the UK, younger males
Speaker 2: eighteen to thirty four are kind of strongly using it.
Speaker 2: They're using it a lot, They're they're making some quite
Speaker 2: quick trades. But some other research I saw out a
Speaker 2: morning Star suggested that a lot of the times people
Speaker 2: investing in ETFs are kind of buying late and missing
Speaker 2: the market, they're trading them quite quite quickly. I mean,
Speaker 2: is there a lesson there just about general investment hygiene?
Speaker 2: I suppose, no matter what financial product you're using.
Speaker 1: Were certainly we know that people that there there are
Speaker 1: investors that are using ets more as trading tools than
Speaker 1: investing tools. The key difference. Being a trading tool is
Speaker 1: basically you just buy and hold it for very short
Speaker 1: period of time. An investing tool you buy and hole
Speaker 1: for a long period of time. Key difference. So we
Speaker 1: do see a bit of that encouragingly, certainly in New Zealand.
Speaker 1: You know, if we look back to for example, COVID
Speaker 1: and some of the other more volatile market periods, we've
Speaker 1: actually seen investors holding through those periods and if anything,
Speaker 1: actually continuing to buy through those periods. So we're starting
Speaker 1: to see more of a buy the mentality here, which
Speaker 1: I think is fantastic. That's the right way to think
Speaker 1: about it. You know, you invest in shares, you invest
Speaker 1: in you buy most things when they're on sale. You know,
Speaker 1: why not buy shares when they're on sale as well?
Speaker 1: So yeah, I think it's slightly different here. Definitely at
Speaker 1: the margin you see more trading. But again, the more
Speaker 1: you trade, the more it costs you, and the more
Speaker 1: likelihood there is of making a mistake.
Speaker 2: Just looking more broadly and more globally, I suppose, have
Speaker 2: we seen any evidence or have you come across any
Speaker 2: suggestion that ETFs are kind of inherently adding to the
Speaker 2: amount of liquidity or volatility in the market.
Speaker 1: They certainly add liquidity. Yeah, you know, if you think about,
Speaker 1: you know, wanting to exit a particular investment, if you
Speaker 1: have a single stock, you know, it might be quite difficult.
Speaker 1: Part could if it's sort of a smaller company or
Speaker 1: that type of thing. Whereas in ETFs, you know, because
Speaker 1: they're broadly diversified, there were sort of get a little
Speaker 1: little technical here, but there are kind of three levels
Speaker 1: of liquidity with ETFs. So you know, essentially, if you
Speaker 1: think about going into a grocery a dairy grocery store,
Speaker 1: you know, and there's a fridge of coke on the floor,
Speaker 1: that's that's your sort of on market liquidity. And then
Speaker 1: you know the dairy's probably got a palette of coke
Speaker 1: sort around the back somewhere in the warehouse, so that's
Speaker 1: your market maker inventory. So in the market makers in
Speaker 1: ETF always holding inventory to meet demand. And then you know,
Speaker 1: if you really need to go big and do a
Speaker 1: very large trade, you've got the individual stocks underlying the ETF,
Speaker 1: which is the factory essentially, so you know you've got
Speaker 1: this momultiple lads of liquidity and ETFs which just don't
Speaker 1: exist in individual shares.
Speaker 2: For example, investing involves the risk you might lose the
Speaker 2: money you start with. We recommend talking to a licensed
Speaker 2: financial advisor. We also recommend reading product disclosure documents before
Speaker 2: deciding to invest.