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The Investing Trends That Defined 2025 (And What They Mean For You) · She's On The Money

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Speaker 1: My name is Tatasha Bamblet. I'm a proud First Nations
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Speaker 1: woman and I'm here to acknowledge country t Glenn Young, Ganya, Niana,
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Speaker 1: Kaka yah Ya, bin Ahaka Nian, Our guy in Mbini,
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Speaker 1: yak um Jar, Domayama, Domagahawakawaman, damon Immalan, Bumba, bang Gada,
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Speaker 1: boma In and now in Waka Ghana on yak rum
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Speaker 1: Jar Watanadaa. Hello, beautiful friends, we gather on the lands
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Speaker 1: of the Aboriginal people. We thank acknowledge and respect the
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Speaker 1: Abiginal people's land that we're gathering on today. Take pleasure
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Speaker 1: in all the land and respect all that you see.
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Speaker 1: She's on the Money podcast acknowledges culture, country, community and connections,
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Speaker 1: bringing you the tools, knowledge and resources for you to thrive.
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Speaker 2: She's on the Money. She's on the Money. Hello and
0:51
Speaker 2: welcome to She's on the Money. The podcast is here
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Speaker 2: to show you investing isn't just for the rich. It's
0:56
Speaker 2: for you too. Unless you're rich and you're listening.
0:58
Speaker 3: To this money, you know what rich people might like
1:02
Speaker 3: this episode.
1:03
Speaker 2: That's true, true, exactly, and everyone's welcome here, rich and
1:07
Speaker 2: poor and everything in between. If you love a bit
1:09
Speaker 2: of gossip and don't.
1:10
Speaker 3: Want we do we do. I don't want to be involved,
1:13
Speaker 3: but I want to know about your cousin's brother's friend.
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Speaker 2: Absolutely, yeah, absolutely, Get your popcorn ready, everyone, because this
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Speaker 2: is the episode few. It's our twenty twenty five share
1:23
Speaker 2: market recap where we look at who made ridiculous returns,
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Speaker 2: what everyone was suddenly obsessed with, where the money actually flowed,
1:31
Speaker 2: and what it all says about how people were really
1:33
Speaker 2: feeling about their money last year. I'm excited, and with
1:36
Speaker 2: me is the woman who is more invested in the
1:38
Speaker 2: share market drama than anyone I know, Victoria Divide.
1:41
Speaker 3: I'm so ready for this. Me too, are my favorite.
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Speaker 3: And this year is all about investing and just more
1:48
Speaker 3: investing content and like the juicy stuff. And I feel like,
1:51
Speaker 3: if you thought that investing is boring up until now,
1:54
Speaker 3: sit down, strap in, get your popcorn, because it's not
1:58
Speaker 3: no fun. It's exciting.
2:00
Speaker 2: It's exciting, and I think it's really smart to kind
2:02
Speaker 2: of frame it in this way where it's like it
2:03
Speaker 2: almost fel like we're watching a reality TV show.
2:05
Speaker 3: One hundred percent. And this episode is coming out in
2:07
Speaker 3: March instead of earlier in the year because some of
2:10
Speaker 3: you may have heard a little bit of gossip about
2:12
Speaker 3: my life. I actually had a baby in January, so
2:15
Speaker 3: I was just a little bit busy, so I took
2:18
Speaker 3: some time off recording. But I'm back and I missed it.
2:22
Speaker 3: And yeah, that's just how long it takes. But also
2:24
Speaker 3: enough we needed all the financial reports to come out,
2:27
Speaker 3: so the soonest you would have got this episode was
2:29
Speaker 3: February anyway, so March like, that's.
2:31
Speaker 2: Pretty good, that's pretty good, that'd be good. It's incredible.
2:34
Speaker 2: You just had a literal baby.
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Speaker 3: I did, and she's in the corner. Literally, yeah, you
2:39
Speaker 3: might actually be able to hear exactly. And I'm so
2:41
Speaker 3: excited to get back into it, guys. And it's my
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Speaker 3: favorite type of episode where I do get to gossip
2:45
Speaker 3: about my favorite topic, and that, my friends, is the
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Speaker 3: share market. And we say this every single time we
2:50
Speaker 3: do an episode like this, because one, I'm just an
2:54
Speaker 3: anxious girl too. I hold a financial services license, so
2:58
Speaker 3: I have a legal ablation to remind you that past
3:01
Speaker 3: performance is not a reliable predictor of future performance. And
3:03
Speaker 3: the shares and ETFs in this episode are not featured
3:06
Speaker 3: because we recommend that you invest them but rather this
3:08
Speaker 3: episode is purely for educational purposes, for helping you understand
3:11
Speaker 3: the market better.
3:13
Speaker 2: Wow, that was so smooth.
3:15
Speaker 3: That wasn't scripted.
3:16
Speaker 2: That is incredible. I want to clip that and just
3:20
Speaker 2: put that disclaimer everything. I think everyone would.
3:23
Speaker 3: It's important because I don't ever want someone in our
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Speaker 3: community to listen to this episode and go, oh my gosh,
3:28
Speaker 3: that ETF that Beck and Victoria we're talking about, I'm
3:30
Speaker 3: going to go invest in that, because the reason we're
3:33
Speaker 3: talking about these things is not because they're good investment opportunities,
3:37
Speaker 3: but just to understand the market better. I mean, they
3:39
Speaker 3: could be great investment opportunities, and as we're going to see,
3:42
Speaker 3: some people made a lot of money back. But just
3:45
Speaker 3: because it performed in one year doesn't mean that it's
3:47
Speaker 3: going to be consistent. Yeah, like it could have surged
3:50
Speaker 3: riplethora of reasons, and we'll get into it.
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Speaker 2: So I want to start by asking b what was
3:55
Speaker 2: the big investing story of twenty twenty five?
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Speaker 3: Right There has been a lot of chatter about this recently,
4:00
Speaker 3: and I feel like I want to caveat this a
4:03
Speaker 3: little bit because this state of the world is very
4:06
Speaker 3: different right now than it was in twenty twenty five,
4:10
Speaker 3: and one of the ETFs that we're going to talk
4:12
Speaker 3: about is war related, and I just want to caveat
4:16
Speaker 3: that there. It's obviously not a recommendation, but I can't
4:18
Speaker 3: change what has happened in the past. We just retrospectively
4:22
Speaker 3: looking at what performed the best, and the top performing
4:26
Speaker 3: ETF is involving drones. Okay. I don't know if it's
4:30
Speaker 3: like a trigger warning thing. I just feel the need
4:32
Speaker 3: to share that upfront because I don't want you thinking,
4:35
Speaker 3: oh my gosh, it's so insensitive talking about how well
4:38
Speaker 3: performing something that's so negative is. But the reality is
4:42
Speaker 3: it is what it is. But ETFs in general, I
4:46
Speaker 3: would say hot topic again. So if you're in the
4:49
Speaker 3: she's on the mining community, you'll be probably thinking, Victoria,
4:52
Speaker 3: they never left, like we've been talking about them for years,
4:54
Speaker 3: and yes we have, But when it comes to market trends,
4:59
Speaker 3: people haven't been that interested in them. And it's not
5:03
Speaker 3: just like a headline kind of hyper anymore. There's actual
5:06
Speaker 3: data that backs this up. So more Australians are now
5:09
Speaker 3: investing through ETFs than ever before and money is flowing
5:14
Speaker 3: in record highs, which is kind of cool.
5:16
Speaker 2: Yeah, Let's pretend Beck that that was you and I.
5:19
Speaker 2: I have a feeling, Yeah, I think it was us.
5:21
Speaker 2: I think it was us. We started talking about them more.
5:23
Speaker 2: We've been harping on.
5:24
Speaker 3: About that for years, and now you guys have finally
5:26
Speaker 3: caught up issues on the money community investing. So in
5:30
Speaker 3: twenty twenty five, the Australian ETF market closed with a
5:34
Speaker 3: total of sit down three hundred and thirty point six
5:38
Speaker 3: billion dollars in funds under management, or FuMB if you're
5:42
Speaker 3: an industry brum FuMB, that's not fine FUM, which is
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Speaker 3: an all time high and a thirty four percent growth
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Speaker 3: on the year.
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Speaker 2: Oh say yeah, that's cool.
5:53
Speaker 3: Investors actually added fifty three billion dollars of brand new
5:57
Speaker 3: money into the ETF market last year. Oh my god,
6:01
Speaker 3: so new cash money?
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Speaker 2: Yes, I actually I am really curious to know, like
6:04
Speaker 2: how much of that because I didn't invest before you,
6:08
Speaker 2: and so I'm sure you would be with the same story.
6:10
Speaker 3: It must be exactly the same for every single person
6:12
Speaker 3: in the market.
6:13
Speaker 2: Dare I say?
6:13
Speaker 1: Yeah?
6:14
Speaker 3: The previous record was actually thirty billion dollars, so to
6:17
Speaker 3: jump to fifty three billion dollars, that's a big jump.
6:20
Speaker 3: And we love to see it. Yeah, there are now
6:22
Speaker 3: BECK four hundred and fifty three exchange traded products trading
6:27
Speaker 3: on the AX and CBOE seventy one new products launched
6:32
Speaker 3: in the year.
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Speaker 2: Are they would they be like apps or things?
6:34
Speaker 3: No, they're just ETFs.
6:36
Speaker 2: Oh I see.
6:37
Speaker 3: I so brand new ETFs traded on the AX, which
6:40
Speaker 3: is really sexy. But last year seventy one new ETF products, Yes,
6:45
Speaker 3: became the reality. And like I say that in a
6:49
Speaker 3: way that you're probably like, okay, cool v. Historically there
6:54
Speaker 3: was like a handful. Yeah, like to have seventy one
6:58
Speaker 3: new options, Like there is an option for everything. Like
7:01
Speaker 3: if you're interested in tech, there's an ETF for that.
7:03
Speaker 3: If you're interested in women only led boards on companies,
7:08
Speaker 3: there is an ETF for that. You want to work
7:10
Speaker 3: with agriculture, fantastic. You want to invest in marijuana, great,
7:14
Speaker 3: there's an ETF for that. There's literally an ETF to
7:17
Speaker 3: fit what you're interested in.
7:19
Speaker 2: I love that. I really it is really exciting. It
7:22
Speaker 2: makes it more exciting for people that don't know about shares, like, hey,
7:24
Speaker 2: just invest in something that.
7:25
Speaker 3: You use exactly I'm interested in So the very thing
7:27
Speaker 3: that I have been banging on about in get These
7:30
Speaker 3: Beck nearly a thousand episodes of the podcast Wow Insane.
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Speaker 2: It's not a niche idea anymore.
7:38
Speaker 3: Like when I started as a financial advisor, Beck, which
7:41
Speaker 3: was honestly, I don't want to talk about it. It's
7:43
Speaker 3: been more than ten years now, terrifying. But when I
7:46
Speaker 3: started as a financial advisor, there were caps on everything,
7:50
Speaker 3: so like there were funds that I thought were really
7:52
Speaker 3: exciting because like they had these like you know, international
7:55
Speaker 3: tech companies that personally I couldn't afford to access because
7:59
Speaker 3: I didn't have twenty thousand dollars to invest back. Yeah,
8:02
Speaker 3: and that's what the caps were. And now you're telling
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Speaker 3: me that I can invest for like one cent.
8:07
Speaker 2: I know, isn't that great?
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Speaker 3: Like the idea that you got into the share market
8:11
Speaker 3: with ten dollars of free money, yeah, and started investing
8:15
Speaker 3: and now have more than a thousand dollars invested as
8:17
Speaker 3: an individual in so many different assets that aligned to
8:20
Speaker 3: your values. Yeah that way back then, if you told
8:22
Speaker 3: Baby Victoria, she would have been like, oh, no, that
8:25
Speaker 3: must be a scam. That can't be real totally, Like
8:28
Speaker 3: it's not accessible, like you have to have X amount
8:31
Speaker 3: and like the clients that I was dealing with, would
8:33
Speaker 3: you know, break up their portfolio over four different funds
8:36
Speaker 3: or something, but they had one hundred grand to play with?
8:40
Speaker 3: What unrelatable?
8:41
Speaker 2: Totally?
8:42
Speaker 3: We love accessibility. But people are now kind of clocking
8:46
Speaker 3: what ETFs do, how they work, and the power of them,
8:50
Speaker 3: and they're becoming a mainstream strategy.
8:52
Speaker 2: Yeah that's so cool. So what were the big shifts
8:55
Speaker 2: in how people were investing? Right, let's paint a picture
8:58
Speaker 2: what twenty twenty five looked like. So we're going to
9:00
Speaker 2: go back to twenty twenty four. We're living in the past.
9:02
Speaker 3: Okay, so good at that, and we're going to talk
9:05
Speaker 3: about how Australians were investing. So it was very concentrated
9:09
Speaker 3: in big US or American ETFs. So funds that tracked
9:14
Speaker 3: the S and P five hundred, which is just the
9:17
Speaker 3: top five hundred companies in America and the Nasdaq were
9:20
Speaker 3: really really popular. Growth was the theme, So lots of
9:23
Speaker 3: people were investing in big tech and there was even
9:26
Speaker 3: huge money at that point in time flowing into bitcoin ETFs,
9:30
Speaker 3: which was called the I Shares Bitcoin Trust if you
9:34
Speaker 3: want to look that one up on the ASX. Their
9:36
Speaker 3: ticker code is ib it I believe, and that tells
9:40
Speaker 3: us that in twenty twenty four, investors were really confident
9:44
Speaker 3: with the US economy. Like if you, guys, if a
9:47
Speaker 3: majority of people investing in ETFs are picking American, you
9:50
Speaker 3: could probably assume that they're pretty confident with the economy
9:54
Speaker 3: that America has. They were very confident in concentrating in
9:59
Speaker 3: mega cap tech. So what mega cap is, It's like,
10:04
Speaker 3: it just means big organizations. So in the investing world,
10:07
Speaker 3: you might hear the term small caps and big caps
10:11
Speaker 3: being thrown around you like loop, I just have a
10:13
Speaker 3: regular sized cap on, but big is just big companies.
10:17
Speaker 3: Small is just small companies. Got you, and a lot
10:20
Speaker 3: of people were actually more willing to take on volatility.
10:23
Speaker 3: They were willing to see the ups and downs of
10:25
Speaker 3: the market for higher returns, which you know, you guys
10:29
Speaker 3: might be as well because you're doing your risk profile
10:31
Speaker 3: and you're a high growth or a growth investor. But
10:34
Speaker 3: people were very confident in riding that momentum and being
10:37
Speaker 3: able to focus on growth. Okay, let's move forward. It's
10:41
Speaker 3: look at twenty twenty five. The biggest inflows and when
10:44
Speaker 3: I say inflows, that just means where new money is
10:47
Speaker 3: coming from that was shifting in the Australian market more
10:51
Speaker 3: towards Australian broad ETFs. Okay, so you entered the market, Beck,
10:56
Speaker 3: and I feel like this is a really good example.
10:59
Speaker 3: You didn't go for American company first, you went for
11:01
Speaker 3: something homegrown.
11:02
Speaker 2: Yes, idea, we're just comfy with it, right, I was,
11:05
Speaker 2: And I kind of like knew, like there are some
11:07
Speaker 2: things that were more familiar, so yeah, you know, and
11:09
Speaker 2: definitely more we did.
11:11
Speaker 3: Have more global diversified share ETFs rather than just the US,
11:15
Speaker 3: and more defensive options were introduced, like global bond funds,
11:19
Speaker 3: subordinated debt funds, which I'll get too.
11:21
Speaker 2: Don't worry.
11:22
Speaker 3: High dividend strategies are even high interest cash ETFs.
11:27
Speaker 2: So people were getting a little bit worried.
11:29
Speaker 3: Yeah, but like that makes sense because like, and I
11:32
Speaker 3: say this a lot on the podcast, mainly because it's
11:36
Speaker 3: meme culture, mainly because we're all on social media. But
11:40
Speaker 3: and I don't know how much I want to tick
11:42
Speaker 3: off Trump at the moment, but like he kind of
11:44
Speaker 3: lost his mind a little bit. Yeah, like he was
11:46
Speaker 3: saying some pretty rash things. Yeah, we started to feel
11:49
Speaker 3: a little less confident in the economy that he was creating.
11:53
Speaker 2: It's not just him.
11:54
Speaker 3: There's lots of things that go into that, right, But like,
11:57
Speaker 3: as a really good example, he felt to be unhinged.
12:01
Speaker 2: Yeah yeah, I mean I wouldn't trust him with my baby.
12:06
Speaker 3: Yeah yeah, but like that's just it, right, Yes, you
12:09
Speaker 3: can feel that uneasiness, you can feel the tension, you
12:12
Speaker 3: can feel that like, oh this is a bit delulu,
12:15
Speaker 3: Like this is probably a bit NQR. And that is
12:19
Speaker 3: a completely different mood and sentiment from twenty twenty four
12:22
Speaker 3: where people were investing in growth options. Like the feelings,
12:26
Speaker 3: the vibes had changed, right, And like there's obviously a
12:29
Speaker 3: lot to it, we'll get into it, but I think
12:31
Speaker 3: that we can all agree that we understand a vibe shift.
12:34
Speaker 3: We all agree that yeah, he was a bit unhinged
12:36
Speaker 3: and we didn't particularly understand what he was getting up to.
12:40
Speaker 3: But instead of doubling down on one market and us
12:43
Speaker 3: going yeah, that's still great, let's go and having one
12:46
Speaker 3: growth story, investors are now spreading their exposure a little
12:49
Speaker 3: bit more broadly. Yeah, And it's because it makes us
12:52
Speaker 3: feel a bit safer, right, Like they are thinking more
12:55
Speaker 3: about income and diversification and preserving their capital and liquidity,
13:01
Speaker 3: so being able to get rid of their investments asap
13:03
Speaker 3: and have it back in cash if they wanted to.
13:06
Speaker 3: Because we're all a little bit more anxious. Yes, and
13:09
Speaker 3: that's okay, Yeah, that's okay, because it's an opportunity for
13:12
Speaker 3: good investors. But I think that that story is relatable,
13:16
Speaker 3: and it suggests that the market has moved from let's
13:19
Speaker 3: call it aggressive optimism.
13:21
Speaker 2: Yeah, okay, we were like, yeah, let's go hard, let's.
13:23
Speaker 3: Go growth, like we can go up and down in
13:27
Speaker 3: twenty twenty four, to more having a measured shift towards
13:31
Speaker 3: building resilient portfolios and hedging our bets a little bit
13:34
Speaker 3: and rather than chasing the hottest thing on the market
13:37
Speaker 3: with like, but what's tried and true and tested, because
13:40
Speaker 3: we just want consistency.
13:42
Speaker 2: At this point, you mentioned a few types of funds
13:44
Speaker 2: with bonds and debt in the name, and I don't
13:46
Speaker 2: really know what they are, So can you explain what
13:48
Speaker 2: they mean?
13:48
Speaker 1: Yeah?
13:49
Speaker 3: I said i'd get to them.
13:50
Speaker 2: Thank you, is my time to shop? Amazing.
13:53
Speaker 3: So the two top funds in the top ten inflow ETFs,
13:57
Speaker 3: they're not actually shares at all. Okay, Yes, they're actually
14:01
Speaker 3: about lending money and they were new additions to the
14:04
Speaker 3: top ten inflow this year. So at now before we
14:07
Speaker 3: have the Vanguard Global Aggregate Bond Index ETF. Easy rolls
14:12
Speaker 3: off easy, just rolls off the time. The ASX ticker
14:15
Speaker 3: code is VB in D. Yeah, and also will make
14:19
Speaker 3: a fact sheet so you guys can look this up.
14:21
Speaker 3: You don't have to write all these things down. It's okay,
14:23
Speaker 3: well just put it down. And then at number eight
14:26
Speaker 3: we had the Van Australian Subordinated Debt ETF.
14:29
Speaker 2: So very it feels nice when you say that subordinated.
14:33
Speaker 3: Yeah, it's because it feels a little bit like they're listening. Ah,
14:38
Speaker 3: you know, like subordinate, like they're you know, under us
14:41
Speaker 3: car but you feel strong.
14:42
Speaker 2: Yes, I see.
14:44
Speaker 3: But their ASX ticker code is sub D And those
14:48
Speaker 3: are both absolute mouthfuls. Like they didn't name it like
14:50
Speaker 3: the Happy Sunshine Fund.
14:52
Speaker 2: They didn't make it easy for us to pay. They
14:54
Speaker 2: were larious.
14:55
Speaker 3: Do you know what, if you were scared of ETFs,
14:58
Speaker 3: We're going to make you really scared of these ones
15:00
Speaker 3: and give them complicated names totally.
15:02
Speaker 2: It's like, hey, you don't need to make it more
15:05
Speaker 2: what's the word I'm looking for discouraging.
15:07
Speaker 3: Yeah, that it's adorned discouraging. But what I can tell
15:10
Speaker 3: you with absolute certainty, and I'm sorry, Vanguard, love you,
15:13
Speaker 3: Van Nick also love you. Those were clearly named by
15:16
Speaker 3: medioca middle aged white men. Yeah, yeah, you just can tell.
15:19
Speaker 3: She's got a vibe about it, a vibe about it.
15:22
Speaker 3: Just got a vibe about it. I'm just picking up
15:23
Speaker 3: where they're putting down. But anyway, instead of them being
15:26
Speaker 3: like a basket of shares, like I've explained before, like
15:29
Speaker 3: a normal ETF, when you buy a bond or a
15:32
Speaker 3: debt fund like these, you're actually lending money and getting
15:36
Speaker 3: paid interest on it. So Vanguard Global Aggregate Bond Index ETF, Wow,
15:41
Speaker 3: is a basket of bonds.
15:43
Speaker 2: Cute, It's cute. It's cute.
15:45
Speaker 3: That's much easier.
15:46
Speaker 2: Yes, due just said basket of bonds.
15:49
Speaker 3: Yeah, that's a nice thing. That makes sense. But it's
15:51
Speaker 3: a basket of bonds. And we have a whole episode
15:53
Speaker 3: on what a bond is, how it works, and I'll
15:55
Speaker 3: make sure that's linked in the show notes. So if
15:56
Speaker 3: you're like, what the heck and Victoria, please just go
15:58
Speaker 3: listen to that and basically what it does is it
16:02
Speaker 3: lends money to governments and large companies all over the world.
16:06
Speaker 3: It is very diversified and it even hedges for currency,
16:09
Speaker 3: which just means that it tries to smooth out exchange
16:12
Speaker 3: rates swings for Australian investors.
16:14
Speaker 2: Oh cool.
16:15
Speaker 3: So you know how like when you're going on a
16:16
Speaker 3: holiday back you start looking up the exchange rate, Yeah,
16:19
Speaker 3: to get the best rate, because you're like, oh, if
16:21
Speaker 3: we buy today, maybe I'll get a few more cents
16:24
Speaker 3: to spend in America because the exchange rate is cooked.
16:27
Speaker 3: It basically means that you don't have to do that
16:28
Speaker 3: and worry about the exchange rate. Great, So people buy
16:32
Speaker 3: this stuff. So they buy the Vanguard Global Agria Bond
16:36
Speaker 3: Index ETF to get a steady income, to reduce overall
16:40
Speaker 3: risk in their portfolio, to balance out shares and add
16:44
Speaker 3: stability when the market is feeling really uncertain. Okay, so
16:48
Speaker 3: like pretty vanilla reasons, fair enough, Yeah, but a mouthful.
16:52
Speaker 3: So it's actually not that hard.
16:54
Speaker 2: Yeah, when you put it like that, that complex, Okay,
16:56
Speaker 2: it doesn't need quite as long.
16:58
Speaker 3: It didn't need to be so dramatic about it. And
17:00
Speaker 3: then the second one is the van neck Australian subordinated
17:03
Speaker 3: debt ETF and it actually puts money into loans made
17:07
Speaker 3: to major Australian banks and companies. Got you.
17:10
Speaker 2: So, if I was to take out a loan for
17:11
Speaker 2: a house, for example, and the interest rate was like
17:14
Speaker 2: five percent, and someone was investing in debt in this.
17:19
Speaker 3: Suborbs, it's the money that the banks borrow to lend
17:21
Speaker 3: to you.
17:22
Speaker 2: That's crazy. And so maybe the interest you make on
17:24
Speaker 2: that is like similar to the interest the person's paying.
17:27
Speaker 3: And it makes sense as to what people are probably
17:29
Speaker 3: a little bit interested in it right.
17:31
Speaker 2: Now, right, yeah, good cash? Right, Yes, that's really really true.
17:35
Speaker 3: Okay, I'm going to I'm going to look into that
17:37
Speaker 3: basically that one, it's Australian and it makes loans to
17:41
Speaker 3: major Australian banks and companies. But they're actually a specific
17:44
Speaker 3: loan that pays a higher interest rate because they carry
17:48
Speaker 3: slightly more risk than regular bonds.
17:50
Speaker 2: Got you.
17:51
Speaker 3: So you know there's a trade off. We have a
17:53
Speaker 3: risk reward chart. We know that we know that the
17:55
Speaker 3: more risk you take, more reward you could potentially get.
17:58
Speaker 3: But you've got to carry the risk.
18:00
Speaker 2: Sure, Okay, okay, so why are they riskier?
18:03
Speaker 3: Okay? So subordinated debt. You said it sounds.
18:07
Speaker 2: Sexy, does what the heck is it?
18:08
Speaker 3: It's basically a loan that sits lower in the repayment queue. Yep, okay,
18:13
Speaker 3: So they're not going to get to you first, you know,
18:16
Speaker 3: I said before subordinate, like you're the boss and there's
18:19
Speaker 3: a subordinate it's sitting below.
18:21
Speaker 4: I see.
18:22
Speaker 3: So you think it sounds safer, you think it sounds sexy,
18:26
Speaker 3: but it's not as sexy. So when a company bowery
18:29
Speaker 3: is money, there's actually like a list of who gets
18:32
Speaker 3: paid first things go wrong. Yep, And in this case
18:36
Speaker 3: it's not you, And that's okay. That's a risk you're
18:38
Speaker 3: willing to take because they're paying a higher interest rate
18:40
Speaker 3: and we like that idea. But bonds will get paid
18:43
Speaker 3: before this type of debt gets paid out, which is
18:46
Speaker 3: why it's a higher risk fund with the potential for
18:49
Speaker 3: higher returns.
18:50
Speaker 2: I see.
18:51
Speaker 3: And it often appeals to people who are like, oh,
18:53
Speaker 3: I want higher yield than cash or government bonds, but
18:56
Speaker 3: I don't want to go and invest in a like
18:59
Speaker 3: full share because there's a lot of volatility there. They
19:02
Speaker 3: are being invested in by people who are comfortable taking
19:06
Speaker 3: a little bit more risk for better returns. It's kind
19:09
Speaker 3: of like saying I want more income than a basic
19:12
Speaker 3: savings account or a safe bond fund, but I actually
19:15
Speaker 3: just don't want the full rollercoaster of the share market. Yeah,
19:19
Speaker 3: so it's not ultra safe. It's also not high growth.
19:22
Speaker 3: It kind of sits in the middle for people who
19:25
Speaker 3: want a little bit more but also don't want the
19:27
Speaker 3: full whole hog of the share market. Sure, okay, and
19:31
Speaker 3: then if you zoom out, yeah, I think that tells
19:33
Speaker 3: you a lot about the market sentiment, a lot about
19:35
Speaker 3: how we're picking up the vibe. I see a lot
19:38
Speaker 3: about how people are a little bit anxious or not
19:40
Speaker 3: sure about the share market and they're looking for a
19:43
Speaker 3: middle ground option where you're like, oh, my high interest
19:45
Speaker 3: savings account isn't really cutting it, but I'm also scared
19:48
Speaker 3: of the share market. I think it's really interesting, even
19:52
Speaker 3: with all the volatility that's going on, investors they didn't
19:55
Speaker 3: leave the market. They've just been picking different options that
19:58
Speaker 3: feel safer to them, and they are more focused on
20:01
Speaker 3: income and stability.
20:03
Speaker 2: I see very clever. Okay, I'm going to look into this.
20:06
Speaker 2: It sounds kind of enticing, so, but that's not advice.
20:11
Speaker 2: So we've covered market sentiment and how investors were behaving.
20:15
Speaker 2: I guess you could say, but when we come back,
20:16
Speaker 2: we're going to get into the stuff. We all want
20:18
Speaker 2: to know what gave the highest returns, So you want
20:21
Speaker 2: to stick around for that? I reckon, we do. Welcome
20:27
Speaker 2: back everyone. Now that we've unpacked where the investment money
20:29
Speaker 2: flowed in twenty twenty five, I need to ask the
20:31
Speaker 2: question we're all dying to know, where were the biggest returns.
20:35
Speaker 3: Oh, and this is the thing I was caveating before. Yes,
20:37
Speaker 3: I'm like, oh, I don't really want to talk about it,
20:39
Speaker 3: but I do want to talk about it because I
20:41
Speaker 3: think a lot of people are like, cool, Victoria Trump
20:45
Speaker 3: started World War three. You're in my DMS already asking
20:48
Speaker 3: being like, what does this mean for me? Should I
20:50
Speaker 3: be pulling all of my money out of the shell market.
20:52
Speaker 3: The answer is no, don't do that. I've spoken before,
20:54
Speaker 3: and I think that you guys, if you listen to
20:57
Speaker 3: the show religiously, we'll probably remember that I've spoken to
21:00
Speaker 3: about gold and how it dominated the money headlines last year,
21:03
Speaker 3: Like everyone was like should I invest in gold?
21:05
Speaker 2: What's going on?
21:06
Speaker 3: And like gold prices absolutely surged Like if hypothetically you
21:09
Speaker 3: were looking for an engagement ring last year, it's going
21:12
Speaker 3: to be more expensive this year if you're buying a
21:14
Speaker 3: gold one. Right, I see, And we might have to
21:16
Speaker 3: do a whole deep dive into investing in metals and resources.
21:20
Speaker 3: I reckon because we only touched on gold. Yeah for
21:22
Speaker 3: a little bit. Like we answered the questions. There are
21:24
Speaker 3: a few listener questions, and I feel like lots of
21:26
Speaker 3: people side note also investing in silver recently. Yeah, okay,
21:31
Speaker 3: Like anyway, so while a lot of the inflows were
21:34
Speaker 3: going into broad market ETFs, bonds and even some cash,
21:37
Speaker 3: some of the biggest returns were actually coming from precious
21:40
Speaker 3: metals and resources.
21:42
Speaker 2: This is making sense because my silver clay little hobby
21:45
Speaker 2: has become very right and when people saying, oh, this
21:48
Speaker 2: shear market doesn't impact me, Yes, the dose unfortunate hobbies
21:52
Speaker 2: are expensive because of it.
21:53
Speaker 3: Yeah, okay, there's going to be another year until someone
21:57
Speaker 3: gets an engagement ring because of this.
21:58
Speaker 2: I know.
22:00
Speaker 3: I'm saying, yes, stop asking seriously, and that honestly mirrors
22:06
Speaker 3: exactly what we're seeing more broadly, right, and when there's
22:09
Speaker 3: uncertainty in our market about inflation, about interest rates, which
22:13
Speaker 3: all I'm doing is talking to my team and to
22:16
Speaker 3: my community and to my clients about inflation rates, rates
22:20
Speaker 3: of growth or global growth. Investors often look for assets
22:24
Speaker 3: that feel like a store of value. Like you love
22:28
Speaker 3: a tangible thing. You just like to be able to
22:30
Speaker 3: see it and touch it and like feel it. And
22:32
Speaker 3: that's why people like property so much, because you can
22:35
Speaker 3: see it and you go. But even if the market crashes,
22:38
Speaker 3: I still have a house. Even if the market crashes,
22:42
Speaker 3: I've got this bar of gold.
22:45
Speaker 2: Yeah, very true.
22:46
Speaker 3: That's what people feel, right, and gold tends to benefit
22:48
Speaker 3: from that narrative, and then silver often moves alongside it
22:52
Speaker 3: with bigger swings like their little friends. Gold and silver
22:54
Speaker 3: go along together. And when this happens with physical precious metals,
22:59
Speaker 3: it has like an a ripple effect into the wider market. Right, So,
23:02
Speaker 3: I don't think it's going to come as a surprise
23:05
Speaker 3: that the mining industry was the standout performer in global
23:08
Speaker 3: and local markets with the beta shares Global gold Miners
23:13
Speaker 3: currency hedged ETF.
23:16
Speaker 2: Why do they do this to us? I know, I mean, sure,
23:19
Speaker 2: not a little town.
23:20
Speaker 3: But you can see where I'm going with it, right, Yeah,
23:23
Speaker 3: it led with a one hundred and forty eight point
23:26
Speaker 3: eighty four return during twenty twenty five. Oh my god.
23:29
Speaker 2: Really all these things, I'm like, I wish I jumped.
23:32
Speaker 3: On this right, And that's why we've got to be
23:34
Speaker 3: in the market consistently. But also we can't compare ourselves, no,
23:38
Speaker 3: because how were you to know? And also will that continue?
23:40
Speaker 2: We don't know.
23:42
Speaker 3: And nine out of the top ten that I'm about
23:45
Speaker 3: to share with you, they were in this sector. Okay,
23:48
Speaker 3: So for ETFs that focused on our local Australian shares,
23:51
Speaker 3: Precious Medals were represented in three of our top six performers,
23:55
Speaker 3: and the other three were from the same index, and
23:57
Speaker 3: they were Australian small caps CTFs.
24:00
Speaker 2: Small cap means small company.
24:02
Speaker 3: Yeah, small cap while you're wearing a cap. Companies on
24:05
Speaker 3: the share market are often grouped by sizes. OK, So
24:08
Speaker 3: they'll go large caps. They're big, they're known as like
24:10
Speaker 3: the giants. Think of like Apple, Microsoft, like big dogs,
24:14
Speaker 3: and then think of maybe like major banks or like
24:17
Speaker 3: really big dog mining companies. And then small caps are
24:20
Speaker 3: smaller companies that are kind of further down on the list.
24:22
Speaker 3: They're still listed on the stock exchange, but maybe they're
24:25
Speaker 3: newer companies, they're earlier in the stages of growth and
24:29
Speaker 3: they're smaller in value. Yeah, but they often grow quicker.
24:32
Speaker 3: Oh that's kind of sexy. And because they're smaller, they
24:36
Speaker 3: often tend to be a little bit more volatile and
24:38
Speaker 3: then they can grow quickly, but they can also fall
24:40
Speaker 3: much harder, sure, like they might not get funding next
24:43
Speaker 3: round and therefore ship. But they're more sensitive in the
24:47
Speaker 3: economic cycle, whereas you know, you see like the National
24:51
Speaker 3: Bank of Australia, like their share price might come down,
24:53
Speaker 3: but they're not leaving the market, like they're not going anywhere.
24:57
Speaker 2: I see, they'll be more secure.
24:59
Speaker 3: So when small caps are among the best performers, it
25:01
Speaker 3: actually often suggests that investors are willing to take on
25:03
Speaker 3: more risk in certain parts of the market. We're pretty confident, right, sure,
25:07
Speaker 3: and it can signal optimism about domestic growth and confidence
25:11
Speaker 3: in the economic outlook, which sounds like a complicated way
25:13
Speaker 3: of being, like we think everything's going well.
25:16
Speaker 4: Right.
25:16
Speaker 3: So the twenty twenty five local market gave us a
25:19
Speaker 3: bit of a personality spirit and I found it quite interesting.
25:22
Speaker 3: So mine as we're doing really really well, which often
25:25
Speaker 3: happens in uncertain environments, and then small caps were doing
25:29
Speaker 3: really really well, which usually reflects risk appetite and growth expectations.
25:34
Speaker 3: And I think that's a pretty interesting mix because we
25:38
Speaker 3: kind of split, we're not all in agreean it's about
25:41
Speaker 3: what the best thing is and what's going on in
25:43
Speaker 3: the market.
25:44
Speaker 2: Yes, that's very true, okay, And so I'm wondering about
25:48
Speaker 2: like individual shares.
25:49
Speaker 3: Yeah, and this is where it gets spicy or a
25:51
Speaker 3: bigger interesting because while metal and resources were I guess
25:55
Speaker 3: the theme of twenty twenty five, the standout individual share
25:59
Speaker 3: on the AX was than a minor. It was a
26:02
Speaker 3: company called Drone Shield. Yes, okay, and this is maybe
26:09
Speaker 3: a little bit topical the moment. Yeah, but like their
26:13
Speaker 3: growth had nothing to do with what's going on at
26:15
Speaker 3: the moment in the economy, Okay, because this was all
26:18
Speaker 3: in twenty twenty five before any of this was announced.
26:21
Speaker 3: But if you haven't heard of them, they're in Australian
26:23
Speaker 3: defense tech company that builds counter drone systems, so detecting
26:29
Speaker 3: and disabling drones around military sites, airports and BEG infrastructure. Okay,
26:34
Speaker 3: you can probably understand.
26:35
Speaker 2: That right now.
26:36
Speaker 3: That's pretty topical. Yeah, And it finished the year up
26:41
Speaker 3: three hundred percent. And the share price surged sharply off
26:44
Speaker 3: the back of a number of different major defense contract wins,
26:49
Speaker 3: rapid revenue growth, increased global attention on counter drone technology,
26:54
Speaker 3: and heightened geopolitical tensions, which has kind of been reiterated
26:59
Speaker 3: with what's happened to this year? Right, Yeah, Yeah, they
27:03
Speaker 3: weren't in a sad way. They went wrong, No, absolutely,
27:06
Speaker 3: and they didn't need this. Yeah, and that's really sad,
27:08
Speaker 3: but if you zoom out, it really does make sense
27:11
Speaker 3: with everything that's happening globally, Like defense spending has been
27:14
Speaker 3: ramping up and governments are pouring money into like lots
27:17
Speaker 3: of security and lots of technology. So I don't think
27:20
Speaker 3: this was random hype by any stretch for the imagination.
27:23
Speaker 3: It was kind of all tied to a very real
27:25
Speaker 3: increase in demand.
27:26
Speaker 2: It's sad, but ye, but it makes it makes any sense.
27:31
Speaker 2: It does make sense.
27:32
Speaker 3: As women, we need to understand this and understand how
27:35
Speaker 3: it's working and why it's working. We don't want to
27:37
Speaker 3: go in that like personally, that's just not an investment
27:41
Speaker 3: for me to hundred percent up all that's sexy, I know,
27:44
Speaker 3: but like that's just not where I want to make
27:46
Speaker 3: my money.
27:46
Speaker 2: Yeah, it's not. It doesn't sit right.
27:49
Speaker 3: And that's okay if you're doing that pop off. I
27:51
Speaker 3: love that for you. Like we're all different and we
27:53
Speaker 3: all make different decisions, but I think that, yeah, we
27:57
Speaker 3: just need to understand it because at the end of
27:59
Speaker 3: the day, stuff impacts you.
28:01
Speaker 2: Yes, that's very true.
28:02
Speaker 3: What about in the US America?
28:05
Speaker 2: America?
28:07
Speaker 3: Well, if you're subscribed to our newsletter, which you absolutely
28:10
Speaker 3: should be because I share money and invest in gossip
28:12
Speaker 3: all the time. And if you're not subscribed to, like
28:14
Speaker 3: where are you, you'll put the link in the show notes.
28:16
Speaker 3: It's literally free. And if you've gotten this far into
28:19
Speaker 3: this episode and you like to hear me yap, you'll
28:22
Speaker 3: love the newsletter. Oh yeah, but if you are, you'd
28:24
Speaker 3: know that I spoke about how In twenty twenty five,
28:27
Speaker 3: Navidia became the first publicly traded company to surpass five
28:32
Speaker 3: brillion dollars in a market cap. Trially is so logic
28:36
Speaker 3: would tell you why it's up there, But no, it
28:39
Speaker 3: actually wasn't one of them. Sorry nvideo. But one of
28:42
Speaker 3: the biggest percentage performers in the US market in twenty
28:46
Speaker 3: twenty five was actually a company that most of us
28:48
Speaker 3: have probably heard of and use their products before. It's
28:51
Speaker 3: a bit of a throwback sand Disc.
28:54
Speaker 2: Sandy is Sandy. What are you guys doing here?
28:57
Speaker 1: No?
28:57
Speaker 3: Right, You probably were like, Oh, she's going to say Apple,
29:00
Speaker 3: I'm just going to say something.
29:02
Speaker 2: Yeah, or maybe Temple and web Star.
29:04
Speaker 3: Oh yeah. But the company that is responsible for all
29:08
Speaker 3: of your SD cards, every single one of them that
29:11
Speaker 3: I put in these cameras and in these podcast recording machines,
29:15
Speaker 3: they also make you SB six and they had a
29:18
Speaker 3: massive year.
29:19
Speaker 2: Oh it's about time, sand Disc. They need to get
29:21
Speaker 2: a lot of I feel like they we need to
29:24
Speaker 2: hype them more.
29:25
Speaker 3: Like I feel like I know if we need to
29:26
Speaker 3: hype them more, because it is actually an increase of
29:30
Speaker 3: five hundred and sixty seven percent. I think they're hyping
29:33
Speaker 3: themselves up at this point. Honestly, it's their time to shine.
29:35
Speaker 3: Let me come to your Christmas party for what happened? Well,
29:38
Speaker 3: part of the story comes down to something in finance
29:41
Speaker 3: speak called spinoff.
29:43
Speaker 2: Oh okay, I love a spinoff.
29:44
Speaker 3: Yeah, we'll love a spinoff. And a spin off is
29:46
Speaker 3: basically when a larger company separates its like one of
29:49
Speaker 3: its divisions, and turns it into its own company or
29:53
Speaker 3: its own standalone business that is on the shere market.
29:56
Speaker 2: Sure.
29:56
Speaker 3: So sand Disc used to actually sit inside a bigger company,
30:00
Speaker 3: and that bigger company was called Western Digital, and they
30:03
Speaker 3: were trading together as one big company. And then earlier
30:06
Speaker 3: in the year, so earlier in twenty twenty five, Western
30:09
Speaker 3: Digital spun off sand Disc and they were like, let's
30:12
Speaker 3: make this its own company, meaning it became its own
30:15
Speaker 3: listed entity. So it actually wasn't on the share market
30:19
Speaker 3: individually before this, and once it was a standalone company,
30:22
Speaker 3: investors could go, oh my gosh, like, you know, I
30:25
Speaker 3: wasn't that keen on Western Digital because they didn't love
30:27
Speaker 3: everything they did, But I love a SD card or USB.
30:31
Speaker 3: They could go and invest in it individually. But investors
30:35
Speaker 3: weren't investing in the company that just makes SD cards.
30:39
Speaker 3: They were investing in a company sitting right in the
30:41
Speaker 3: middle of a data explosion. Oh so, like everything is
30:45
Speaker 3: crazy at the moment when it comes to data and
30:48
Speaker 3: needing to save data because we know that AI is
30:51
Speaker 3: taking off. You got to save that stuff otherwise it
30:53
Speaker 3: has no memory. Right, every single AI model being trained,
30:58
Speaker 3: every single cloud service that is expanding at the moment,
31:01
Speaker 3: and every single new data center that's being built needs
31:04
Speaker 3: somewhere to save their data to live. Where's their data
31:08
Speaker 3: going to live? And sand Disk is a flash memory
31:11
Speaker 3: and storage business, so when demand for data explodes, the
31:14
Speaker 3: need to store it also explodes, and then that demand
31:17
Speaker 3: directly flows through companies like them.
31:20
Speaker 2: Oh my god, this feels like a Robbie Williams situation.
31:22
Speaker 3: It's kind of fun. I love Robbie Williams. We're so old.
31:27
Speaker 2: No, this is incredible, and it.
31:30
Speaker 3: Was something that we spoke about historically in our Investing
31:32
Speaker 3: in Tech and AI episode which I'm obviously also going
31:36
Speaker 3: to link in the show notes if you missed it.
31:38
Speaker 3: And at the time of recording this particular episode, it
31:41
Speaker 3: was up a massive twelve hundred and fifty percent in
31:44
Speaker 3: the last twelve months. So I think it's going to
31:46
Speaker 3: be super interesting to see what's going to go on
31:48
Speaker 3: with this stock in twenty twenty six. Can it actually
31:51
Speaker 3: continue with that growth or is it going to be
31:53
Speaker 3: a little bit, you know, nuanced, Is it going to
31:55
Speaker 3: like drop down? Who knows? I don't know, but it
31:58
Speaker 3: just I think it's a super interesting thing to look into.
32:01
Speaker 2: That's this is insane.
32:02
Speaker 3: How do people even hear about this stuff, someone probably
32:04
Speaker 3: kind of thought, oh, actually, this is probably a good
32:06
Speaker 3: one because they've started looking into it and started putting
32:09
Speaker 3: their thinking cap on. But personally, I don't have the
32:12
Speaker 3: capacity to do that. So that's why I never invest
32:14
Speaker 3: in anymore in individual If you guys can hear Campbell
32:19
Speaker 3: has maybe joined the recording and doesn't know how to
32:22
Speaker 3: be quiet, and it's a squeaky, squeaky newborn, I.
32:25
Speaker 2: Mean, needs to talk about shares baby so cute.
32:29
Speaker 3: So it'll be super interesting to see where I guess
32:32
Speaker 3: that goes in the next year, Like will it be
32:35
Speaker 3: consistent or will it be different? Like is there going
32:38
Speaker 3: to be a market competitor that rises to like kind
32:41
Speaker 3: of rival them.
32:43
Speaker 2: It will be interesting to see what happens in the
32:44
Speaker 2: entire market in twenty twenty six. Dare I say, before
32:47
Speaker 2: we wrap up, are there any final thoughts? Who want
32:49
Speaker 2: to leave us with?
32:50
Speaker 3: I think twenty twenty five told us something really important. Yeah. Firstly,
32:54
Speaker 3: Victoria Devine can conceal an entire pregnancy.
32:56
Speaker 2: Yes, that's one.
32:57
Speaker 3: It is pretty good. But also that the average investor
33:00
Speaker 3: wasn't trying to pick the next winner. They were trying
33:02
Speaker 3: to build a really secure portfolio that could hopefully survive
33:07
Speaker 3: whatever twenty twenty six throws at them. Yeah, because while
33:10
Speaker 3: it's really fun to look at, I guess three hundred
33:12
Speaker 3: percent return and five hundred percent return purely for the gossip,
33:17
Speaker 3: those are exceptions, Like you can't predict that, because otherwise
33:20
Speaker 3: I'd be so rich. Beck Oh yeah, And I guess
33:22
Speaker 3: this is why you hear me always banging on about
33:24
Speaker 3: the same things like be consistent, diversify your portfolio, and
33:29
Speaker 3: all the boring stuff, because girl, you can't predict it.
33:32
Speaker 3: And the best investment strategy is actually just building something
33:35
Speaker 3: that will work in the years where gold thrives, or
33:39
Speaker 3: in the years where tech is incredible, or in the
33:41
Speaker 3: years where sand disk absolutely blew it out of the water,
33:44
Speaker 3: or even in the years where we've got a lot
33:46
Speaker 3: of political uncertainty, because you can't predict what's gonna thrive
33:51
Speaker 3: and not survive in the years to come. Like, let's
33:54
Speaker 3: just make something sustainable, And the best investment strategy is
33:58
Speaker 3: just building something canstan And the data actually backs this up.
34:02
Speaker 3: So more Australians than ever are choosing ETFs, and they're
34:06
Speaker 3: adding bonds and thinking about income and they're thinking about
34:09
Speaker 3: the resilience of their portfolio. They're not chasing what's coming
34:13
Speaker 3: in hot because that's yeah, I feel like that's my
34:17
Speaker 3: favorite type.
34:17
Speaker 2: Of investing story. From twenty twenty five, We're all just
34:20
Speaker 2: becoming basic. Bitch, very very very well said, what a
34:25
Speaker 2: perfect place to leave it. I've learned so much personally today.
34:27
Speaker 2: And if you have to, don't forget to subscribe. We've
34:29
Speaker 2: got more investing episodes on the way.
34:31
Speaker 3: And obviously if you cannot wait for our next investing episode,
34:35
Speaker 3: we actually have a whole investing hub on our website
34:38
Speaker 3: where you will find free investing freebies, courses, and investment
34:42
Speaker 3: episodes all in one place, all at the same time,
34:45
Speaker 3: So we'll link that in the show notes for you
34:46
Speaker 3: as well.
34:47
Speaker 2: We'll see you guys on Friday. By guys bye.
34:55
Speaker 4: The advice shared on Cheese on the Money is generally
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