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The Top 5 Performing ETFs in 2023 · She's On The Money

0:00
Speaker 1: Hello.
0:01
Speaker 2: My name's Santasha Nabananga Bamblet. I'm a proud yr the
0:05
Speaker 2: Order Kerni Whoalbury and a waddery woman. And before we
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Speaker 2: get started on She's on the Money podcast, I would
0:11
Speaker 2: like to acknowledge the traditional custodians of the land of
0:14
Speaker 2: which this podcast is recorded on a wondery country, acknowledging
0:18
Speaker 2: the elders, the ancestors and the next generation coming through
0:23
Speaker 2: as this podcast is about connecting, empowering, knowledge sharing and
0:27
Speaker 2: the storytelling of you to make a difference for today
0:31
Speaker 2: and lasting impact for tomorrow.
0:33
Speaker 3: Let's get into it.
0:34
Speaker 4: She's on the Money, She's on the Money.
0:57
Speaker 3: Hello, and welcome to She's on the Money, the pod
1:00
Speaker 3: cast for people who want Financial Freedom. My name is
1:02
Speaker 3: beck Syed and Victoria Divine is with me as always.
1:06
Speaker 3: What are we talking about?
1:08
Speaker 1: I'm so excited You're probably gonna go oh the second
1:12
Speaker 1: I say this bit. Today, my friends, we are talking
1:15
Speaker 1: about the top five ETFs of twenty twenty three. Okay,
1:18
Speaker 1: oh you're in. I'm kind of in. Yeah, why are
1:22
Speaker 1: you kind of in?
1:22
Speaker 3: I know we've spoken about ets before, and I feel like,
1:25
Speaker 3: in my mind they're like the easiest thing for me
1:27
Speaker 3: to wrap my head around. Oh good, yeah, well not
1:30
Speaker 3: easy to wrap my head around. But I'm like, this
1:32
Speaker 3: seems like a good option if you're getting into investment
1:35
Speaker 3: and twenty.
1:35
Speaker 1: Twenty four is the year of beck starting. Yes, best, Yes,
1:39
Speaker 1: And I feel like from the conversations we've been having
1:41
Speaker 1: not on the podcast and ETFs, what you're planning on picking?
1:44
Speaker 2: Right?
1:45
Speaker 3: Oh yeah, so how about I.
1:48
Speaker 1: Tell you about the top five ETFs?
1:50
Speaker 3: Then perfect? But before we get started, Yes, this is
1:53
Speaker 3: a really basic question. Yes, I just want to know
1:55
Speaker 3: if you could run us through what an ETF actually
1:59
Speaker 3: is before we die.
2:00
Speaker 1: That's smart. Let's just like start at the basics. Obviously,
2:02
Speaker 1: on this podcast, we have done an entire investing series historically.
2:07
Speaker 1: We did it with shares these last year. It was
2:09
Speaker 1: one of the most popular series we've ever done. It
2:12
Speaker 1: was four episodes. It went through the investing basics, and
2:15
Speaker 1: if you haven't listened to that, please go back and
2:17
Speaker 1: listen to those because I think it is really important.
2:20
Speaker 1: But to just get everyone on exactly the same page.
2:23
Speaker 1: And ETF is in exchange traded fund sounds fancy, promise,
2:28
Speaker 1: It's not that fancy or complicated. It's basically a basket
2:32
Speaker 1: of shares, and what happens is you have decided Beck
2:38
Speaker 1: and I'm using you as an example here that you're like,
2:40
Speaker 1: you know what, I am not the type of girlie
2:42
Speaker 1: who's gonna go out and you know, do my research
2:45
Speaker 1: on every single individual share and then purchase every single
2:49
Speaker 1: individual share and make sure they're consistently balanced. Yes, performing well,
2:54
Speaker 1: doing not so well. You know, you're rebalancing your portfolio. Occasionally,
2:58
Speaker 1: some people are really into this. Don't get me wrong,
3:00
Speaker 1: I'm that girl. I love to play with direct shares,
3:04
Speaker 1: but let's be honest, they're not for everybody. You're not
3:06
Speaker 1: an investor full time. You do video and content, right,
3:11
Speaker 1: so why would you go and get an investment that
3:15
Speaker 1: doesn't make a lot of sense for your lifestyle. So
3:17
Speaker 1: a lot of people will turn to an exchange traded
3:20
Speaker 1: fund because essentially fund managers who are usually big dog
3:24
Speaker 1: white men still sadly, but we trust them here because
3:28
Speaker 1: they've got lots of experience. They go, you know what,
3:31
Speaker 1: I'm going to make an ETF of my own. It's
3:33
Speaker 1: going to be an exchange traded fund. Usually it's under
3:35
Speaker 1: a brand, so you might have heard them under Vanguard.
3:38
Speaker 1: You might have heard them under Global x. You might
3:41
Speaker 1: have heard them under our friends are beta shares. There's
3:44
Speaker 1: lots and lots of different providers. There's lots of individual providers.
3:48
Speaker 1: If they're on the ASX SO the Australian Stock Exchange,
3:51
Speaker 1: they're a legit ETF. It's all good like there's no
3:54
Speaker 1: dodgy ones on there, if that makes sense. But you go,
3:58
Speaker 1: all right, well, this person fun manager has gone and
4:01
Speaker 1: done all of the work, all of the research, has
4:03
Speaker 1: an entire team behind them that helps pick you know,
4:05
Speaker 1: the shares that make up the ETF. And the ETF
4:09
Speaker 1: could be of anything, beck. So there are ETFs here
4:12
Speaker 1: in Australia of the top one hundred companies, the top
4:15
Speaker 1: two hundred companies in Australia, the top five hundred companies.
4:19
Speaker 1: Beyond that, it could just be a collection of tech
4:22
Speaker 1: companies that this particular company is really passionate about and
4:26
Speaker 1: it's gone. You know what, Beck, I've gone and done
4:28
Speaker 1: all my research, and I reckon these are the you know,
4:31
Speaker 1: best tech companies to put in my basket of shares.
4:35
Speaker 1: There are thousands of different types of ETFs globally. In fact,
4:39
Speaker 1: you can buy in the USC an ETF that only
4:43
Speaker 1: invests in companies who have women on their boards.
4:46
Speaker 3: Oh that's cool, right, So you.
4:49
Speaker 1: Can nowadays find an ETF that reflects your values. Historically
4:53
Speaker 1: it was kind of like just this big pulled fund
4:56
Speaker 1: of like you only get the top two hundred, or
4:58
Speaker 1: you only get the top three hundred, and you'd be like,
5:00
Speaker 1: you know what, I'd like to trite the index. But now,
5:03
Speaker 1: as time is going on, they're becoming more and more niche,
5:06
Speaker 1: so women only companies, you might be looking at tech companies.
5:10
Speaker 1: You might have an ETF that only invests in biopharmaceuticals.
5:13
Speaker 1: You might have an ETF that invests in crypto. So
5:17
Speaker 1: there are so many different options. But essentially it is
5:21
Speaker 1: a basket of shares that a fund manager managers, and
5:25
Speaker 1: you go, i'd back in on that, And in exactly
5:28
Speaker 1: the same way that you purchase a share on the
5:30
Speaker 1: stock market, you purchase an ETF. So you go, you
5:33
Speaker 1: pay for your ETF, and instead of going, ah, this
5:37
Speaker 1: share cost forty seven dollars, this ETF might cost forty
5:40
Speaker 1: seven dollars. But by investing your forty seven dollars example,
5:44
Speaker 1: obviously you get instant diversification and exposure to all of
5:49
Speaker 1: those companies sitting in the basket.
5:51
Speaker 3: Yeah, okay, does that make sense totally? So for me
5:53
Speaker 3: it sounds like there's someone else doing all the thinking
5:57
Speaker 3: for me. Yes, Like I don't want to be putting
5:59
Speaker 3: all my eggs in one basket. Yes, But if I
6:02
Speaker 3: put my basket in all the eggs, then that's what
6:06
Speaker 3: an ETF kind of is. That's all you know what.
6:08
Speaker 1: I'm just gonna let you get away with that, because
6:10
Speaker 1: thank you, I and everyone listening knows exactly what you
6:14
Speaker 1: meant by that so much. So. Typically BECK and ETF
6:18
Speaker 1: is going to track I guess a particular index or
6:20
Speaker 1: sector or commodity or other assets. So as I said before,
6:24
Speaker 1: it might be the top one hundred, two hundred, three
6:26
Speaker 1: hundred and four hundred whatever. It might be crypto, it
6:29
Speaker 1: might be technology. So it's not as active as what
6:33
Speaker 1: we call in Australia a managed fund. So a managed
6:36
Speaker 1: fund is usually a lot more hands on. So you
6:39
Speaker 1: might have less shares in that particular type of basket
6:44
Speaker 1: than an ETF, but they're more highly managed. They're being
6:48
Speaker 1: swapped out more often if necessary. You have somebody looking
6:51
Speaker 1: at them each and every single day. It's not just
6:54
Speaker 1: a collection of assets. The main difference between these two
6:59
Speaker 1: types of assets, or these two types of investments, is
7:02
Speaker 1: a managed fund has higher fees, so there's more people
7:06
Speaker 1: working on it, more people to get paid. The fees
7:09
Speaker 1: on a managed fund are always going to be higher
7:12
Speaker 1: than an ETF that you can just go purchase in
7:14
Speaker 1: the share market. Sure is one better than the other?
7:17
Speaker 1: Absolutely not. It's actually down to your values and what
7:19
Speaker 1: you want to purchase. Personally, I think I've said before
7:23
Speaker 1: on the podcast, I own a couple of ETFs. I
7:25
Speaker 1: have some money in a managed fund. I also have
7:27
Speaker 1: direct shares. I double with all of them. But predominantly
7:31
Speaker 1: my personal and this is not advice, this is me
7:33
Speaker 1: just sharing because I think people are real pervy. Predominantly
7:36
Speaker 1: my investment portfolio is made up of two ETFs.
7:40
Speaker 3: But with that said, what makes ETFs appealing to the
7:44
Speaker 3: everyday bidd.
7:46
Speaker 1: Well, Actually, if you're at a bar Beck and you
7:48
Speaker 1: say I've got ETFs, you immediately look smarter and you
7:51
Speaker 1: can tells like, yeah, what ETF have you got, and
7:54
Speaker 1: you can start to sound a little bit like a
7:56
Speaker 1: finance bro.
7:57
Speaker 3: So social, social statay, social status is what we're looking
8:01
Speaker 3: for here.
8:02
Speaker 1: Yeah, absolutely, we're going with social status.
8:04
Speaker 3: I could go with that.
8:05
Speaker 1: So obviously that doesn't matter. And we all know how
8:08
Speaker 1: I feel about finance bros. Talking about the U sits
8:11
Speaker 1: at the bar like sit down, your dad told you
8:14
Speaker 1: all of that. But one of the best features of
8:17
Speaker 1: an ETF for me is that instant diversification key. So
8:21
Speaker 1: we talk about investing all the time on the podcast
8:25
Speaker 1: and the importance of it, But for me, it's again
8:28
Speaker 1: like you were saying, not putting all your eggs in
8:30
Speaker 1: one basket. Like if I went and for some reason,
8:32
Speaker 1: I keep picking BEHP as an option.
8:36
Speaker 3: That sounds familiar. You spoken about BHP before.
8:38
Speaker 1: Yeah, I think it's just because I've been in the
8:40
Speaker 1: share market recently and it just keeps coming up. I
8:43
Speaker 1: don't even invest in that, bro, It's not aligned to
8:47
Speaker 1: my values at this point in time. But anyway, it
8:50
Speaker 1: gives you instant diversification. So if you were to go,
8:53
Speaker 1: all right, I'm gonna buy this one share in NAB
8:55
Speaker 1: or BHP or you know, combank or whatever, you're getting
8:58
Speaker 1: access to only one of those assets. So let's say
9:03
Speaker 1: that you know a bank has a really bad year,
9:05
Speaker 1: BECK and you know they're off fifteen percent your entire
9:08
Speaker 1: portfolio is then off fifteen percent because you have one
9:12
Speaker 1: hundred percent exposure to that asset. If you go with
9:15
Speaker 1: an ETF and you know it might be the top
9:17
Speaker 1: one hundred companies on the ASEX, and you go, great,
9:21
Speaker 1: you're going to get those banks in there. Anyway, One
9:23
Speaker 1: of them might have that negative fifteen. One of the
9:26
Speaker 1: other banks might be just on par Another sector that
9:30
Speaker 1: is in the top one hundred might have actually performed
9:32
Speaker 1: at twenty three percent and looking pretty sexy. There might
9:35
Speaker 1: be a few that are lower than that. There might
9:37
Speaker 1: be some that have absolutely tanked. But what happens is
9:40
Speaker 1: because you have so many investments and diversification across different
9:44
Speaker 1: sectors and companies, you ultimately end up with an average return.
9:50
Speaker 1: So instead of you know, just getting that one company's
9:53
Speaker 1: losses or that one company's gains, everything averages out and
9:58
Speaker 1: you get usually the average of that market. And to me,
10:03
Speaker 1: I like slow and steady. I like to win the race.
10:06
Speaker 1: I don't have to blow the lights out with my
10:08
Speaker 1: investment portfolio. I also don't want to lose completely. So
10:12
Speaker 1: an ETF is usually a good way of getting consistent
10:15
Speaker 1: returns over the long term without having to be you know,
10:19
Speaker 1: a really really smart investor who knows how to pick stocks.
10:23
Speaker 3: Yeah, okay, I totally see what you're saying. And now
10:26
Speaker 3: my next question is what do I do? Like, what's
10:30
Speaker 3: the process? How do I even get started?
10:32
Speaker 1: It's really easy. I can do it, honestly. It's as
10:35
Speaker 1: easy as like buying new shoes online. And once you
10:38
Speaker 1: have a platform, mate, because you like then upload all
10:41
Speaker 1: your personal information to that platform. You've obviously like you know,
10:43
Speaker 1: signed all of their waivers and like you know, confirmed
10:46
Speaker 1: that you're happy with their terms and conditions, and like
10:48
Speaker 1: you've probably attached to your bank account and stuff. It's as
10:51
Speaker 1: easy as ordering address on the Iconic.
10:54
Speaker 3: That's easy enough.
10:55
Speaker 1: It's too easy. It is too easy.
10:58
Speaker 3: Unfortunately, slightly too easy.
10:59
Speaker 1: Yeah, right, So to buy an ETF in Australia, you're
11:03
Speaker 1: going to need a third party and you're going to
11:05
Speaker 1: need either an online broker, which is less common, or
11:09
Speaker 1: an investing platform. There are heaps of investing platforms out
11:12
Speaker 1: there for you to choose from. I'm not going to
11:14
Speaker 1: tell you right now, because we did a whole episode
11:16
Speaker 1: on what investing platforms might work for you. Go listen
11:19
Speaker 1: to that. We will link it in the show notes
11:21
Speaker 1: to make it super easy. But obviously our community are
11:25
Speaker 1: quite in love with Chazy's as an investing platform that
11:29
Speaker 1: just works for them, right, and this isn't even me
11:31
Speaker 1: plugging them, It just Chezey's does. These lots of other
11:34
Speaker 1: places do this too. Give you access to the Australian
11:37
Speaker 1: Stock Exchange, but the benefit of chair Z's is also
11:40
Speaker 1: they give you access to other exchanges as well around
11:44
Speaker 1: the world. So with Chaz's you get access to the
11:46
Speaker 1: American Exchange, you also get access to the New Zealand
11:49
Speaker 1: Exchange and they're always expanding, whereas if you just go
11:52
Speaker 1: with an Australian one, you might not you know, be
11:54
Speaker 1: able to buy American ETFs or shares. Does that matter no,
11:57
Speaker 1: because you might not want to do that. Beck, Just
12:00
Speaker 1: when you're looking for a platform, what you need to
12:03
Speaker 1: do is just make sure that they're in line with
12:05
Speaker 1: your expectations, because you wouldn't go and download a platform
12:09
Speaker 1: that you know you've signed up for. You like their
12:11
Speaker 1: marketing's great, makes sense, I really like this, but they
12:14
Speaker 1: don't give you access to the American Stock Exchange if
12:17
Speaker 1: that's all you wanted.
12:18
Speaker 3: Sure, that's a bit silly, So I.
12:19
Speaker 1: Think it's make sure that you're picking a platform that
12:23
Speaker 1: works for you. All right, so you've picked your platform,
12:25
Speaker 1: you're going to sign up to your account. You're going
12:26
Speaker 1: to need to give them some personal information. This is
12:29
Speaker 1: a once off thing. You don't have to do this
12:30
Speaker 1: every time you go to invest money, but you need
12:33
Speaker 1: to do this as kind of like a hygiene factor.
12:35
Speaker 1: At the very beginning. You'll need to provide proof of ID,
12:39
Speaker 1: so your driver's license or passport. You'll need to also
12:42
Speaker 1: provide all of your personal details. A lot of platforms
12:45
Speaker 1: will also ask for your tax file number, which is
12:48
Speaker 1: not a red flag.
12:49
Speaker 3: Sure.
12:50
Speaker 1: It's actually them making sure that they have good disclosure
12:53
Speaker 1: with the government, and in a lot of cases it's
12:55
Speaker 1: now compulsory. So don't be like, oh, they shouldn't be
12:58
Speaker 1: asking me for that, Yeah they should.
13:01
Speaker 3: Okay, that one would be a red flag.
13:03
Speaker 1: Meet Yeah, but it's actually not like they're making sure
13:06
Speaker 1: sure that any income is disclosed to the tax agents.
13:10
Speaker 1: And actually that's really good because if the ATO happened
13:14
Speaker 1: to do an audit on a platform, which they can do,
13:17
Speaker 1: and finds that, you know, miss besay Ed hadn't put
13:20
Speaker 1: a TFN in and hadn't paid tax last year on
13:23
Speaker 1: those investments, you could be in a sticky situation. So
13:26
Speaker 1: it's actually putting you in the best possible position. Means. Also,
13:30
Speaker 1: sometimes these things are just attached to the ATO portals,
13:34
Speaker 1: so when you log in okay, they might be there
13:37
Speaker 1: for you to go tick, Yeah I did that.
13:38
Speaker 3: This is something you probably have told me, but I
13:40
Speaker 3: didn't realize you had to pay tax on your earnings
13:42
Speaker 3: or whatever.
13:43
Speaker 1: On your income. You have to pay tax on any
13:46
Speaker 1: income made in Australia. Okay, So if you are making money, baby,
13:50
Speaker 1: you are paying tax. That is how the world works.
13:53
Speaker 1: And you will pay tax on your investments at the
13:56
Speaker 1: same rate as your marginal tax rate.
13:58
Speaker 3: Gotcha.
13:59
Speaker 1: If you are paying tax, that's sexy, Like it means beck,
14:04
Speaker 1: you are making money. If you are losing money on
14:06
Speaker 1: your share portfolio, it hurts. It has happened to me before,
14:10
Speaker 1: and like it still sucks. Like even though I was
14:13
Speaker 1: a financial advisor back, I look at my portfolio and
14:15
Speaker 1: I'm like, hey, this sucks. I even doing the right thing.
14:19
Speaker 1: And then I have to remind myself, like v this
14:21
Speaker 1: is a long term game. You signed up for this,
14:24
Speaker 1: Like you literally tell other people to do this. But
14:28
Speaker 1: in those years where you have a loss, you get
14:31
Speaker 1: to carry the loss forward, so you can offset those
14:34
Speaker 1: losses against your tax, which is kind of sexy. And
14:38
Speaker 1: in future years, if you make a profit, you can
14:41
Speaker 1: carry forward those losses. So like just good bookkeeping, keeping
14:45
Speaker 1: track of things. It's okay. Your platform will help you
14:48
Speaker 1: there if they're a good platform. So you want to
14:50
Speaker 1: do that, right, So let's say that you've signed up
14:52
Speaker 1: to your platform of choice. Now you know that you
14:54
Speaker 1: have to pay tax, and you've given them all of
14:56
Speaker 1: your personal details. You are now going to you think
15:00
Speaker 1: about the type of ETF that you are investing in.
15:04
Speaker 1: So what are you investing in? What's it look like?
15:06
Speaker 1: Start to do some research. If you are on a
15:09
Speaker 1: platform that gives you access to the Australian Stock Exchange,
15:13
Speaker 1: you might want to go off that platform to do
15:15
Speaker 1: your research. You might want to do some googling, have
15:17
Speaker 1: a look at some articles online, you know, ask some friends.
15:20
Speaker 1: You might even want to invest small amounts in a
15:23
Speaker 1: number of different ETFs just to like give it a
15:25
Speaker 1: bit of a go. Like I've got a couple of
15:27
Speaker 1: girlfriends who have just started investing and they're like, I
15:30
Speaker 1: don't know what to pick, and I am like rock
15:32
Speaker 1: in a hard place because I'm like, I wish I
15:34
Speaker 1: could tell you, but like I can't. So they're like,
15:37
Speaker 1: what if I just put, you know, a small amount
15:38
Speaker 1: of money in each of them. I'm like, oh, yeah,
15:41
Speaker 1: it's kind of like a gateway drug.
15:42
Speaker 3: Beck.
15:43
Speaker 1: Yeah, like, once you've had the gateway drug, you're pretty
15:45
Speaker 1: comfortable with the rest of the situation. And is that
15:48
Speaker 1: how we should see investing. No, but it makes a
15:50
Speaker 1: lot of people really comfortable when you explain it that way,
15:53
Speaker 1: because you go, oh, it makes sense. Like you know,
15:55
Speaker 1: it's like your first drink when you're really young and
15:58
Speaker 1: you like have never had out a goal before, when
15:59
Speaker 1: you're like this is bad, and then you're at the
16:01
Speaker 1: pub and you're like, oh, I know what type of
16:03
Speaker 1: wine to order. I don't know how old you were
16:05
Speaker 1: when you first started drinking, but like, let's be brutally honest.
16:08
Speaker 1: I was probably like fourteen, ah, and I wouldn't know
16:12
Speaker 1: the difference between a savvy b and a chardonna.
16:15
Speaker 3: Oh my god, white wine, white wine, and.
16:20
Speaker 1: Now those ones aren't bubbly.
16:21
Speaker 3: Babe, I still don't know what that leg is.
16:24
Speaker 1: If you become a bit of a Winoh yeah, which
16:28
Speaker 1: I'm not right now because I'm pregnant. But yeah, But
16:30
Speaker 1: like on a base level, we all know there's red wine,
16:32
Speaker 1: there's white wine, sure, sparkling, get some beers. But like
16:36
Speaker 1: if you went and spoke to a wine person, they'd
16:38
Speaker 1: be like, oh, do you not offend us with that
16:41
Speaker 1: very bleak description. Save blanc looks like this, a chardonna
16:45
Speaker 1: looks like this. A pino gree is very different to
16:47
Speaker 1: a pino greasy O.
16:48
Speaker 3: This one's got legs.
16:49
Speaker 1: But do you know how you find what you like
16:53
Speaker 1: you drink? You try them, You try them, you try them.
16:56
Speaker 1: So that I think is a good analogy of what
16:59
Speaker 1: ETFs kind of like, they're all going to be slightly different.
17:01
Speaker 1: You might look at a lot of ETFs and go, oh,
17:04
Speaker 1: they kind of have the same top ten holdings. Yeah,
17:07
Speaker 1: because probably they're really stable assets and everyone just wants
17:10
Speaker 1: to whack them in their ETF to make sure they've
17:12
Speaker 1: got some financial stability. And then it might be you know,
17:15
Speaker 1: sustainable assets after that. It might be you know, tech
17:18
Speaker 1: assets after that, or biopharmaceuticals or whatever it is. But like,
17:22
Speaker 1: don't be surprised if lots of ETFs kind of sometimes
17:25
Speaker 1: look similar. We actually need to find our taste. And
17:28
Speaker 1: if you want to invest in a couple of them
17:30
Speaker 1: at the beginning and see how they go and learn
17:32
Speaker 1: a bit more about them, and then you know, pick
17:34
Speaker 1: one from that short list and start investing more aggressively
17:38
Speaker 1: in that. That's probably going to make you feel a
17:40
Speaker 1: lot more comfortable than just like commission to one at
17:43
Speaker 1: the very start and saying this is the B all
17:45
Speaker 1: end all and I can never change yea, you can
17:47
Speaker 1: have a savvy B. And then he keeps go back
17:50
Speaker 1: up to the bar and be like, wants something different?
17:52
Speaker 1: Now are yeah exactly? Does that make sense?
17:55
Speaker 3: That is making a lot more sense.
17:57
Speaker 1: So we're finding our taste. We are re searching out
18:00
Speaker 1: ETF and working out what works for us. And just
18:04
Speaker 1: because it works for me, beck might not work for you, right,
18:07
Speaker 1: Like you don't even drink so like me picking a wine,
18:12
Speaker 1: You might be like me, I don't even want a wine.
18:13
Speaker 1: I want a water on a free sparkling water at
18:16
Speaker 1: the pub. Absolutely, but we have different tastes and that's okay,
18:20
Speaker 1: But that doesn't mean that we can't be on the
18:21
Speaker 1: same page about having conversations about asset classes and having
18:25
Speaker 1: conversations about what we invest in. It doesn't mean that
18:28
Speaker 1: we have to pick the same thing though. Just because
18:30
Speaker 1: you picked it doesn't mean that it's going to work
18:32
Speaker 1: really well for me, because I'm telling you right now,
18:35
Speaker 1: when I'm not pregnant, you can have a really nice,
18:38
Speaker 1: savvy be and probably gonna put an ice cube in it.
18:41
Speaker 1: But nobody judged me for that, right I was selling.
18:43
Speaker 3: It to me.
18:43
Speaker 1: I'm trying to welcome. You can come over and drink
18:45
Speaker 1: with me, thank you. So then what you're going to
18:48
Speaker 1: do is you've picked an ETF that you want to
18:50
Speaker 1: start with, or you've picked a couple of ETFs that
18:52
Speaker 1: you want to start with. You're then going to go
18:54
Speaker 1: to your platform and just search the ticker code. Anything
18:57
Speaker 1: that is traded on a stock exchange as a ticker code,
19:01
Speaker 1: and this is essentially a unique individual code that identifies
19:06
Speaker 1: a business or an investment in an abbreviated form. So
19:10
Speaker 1: whenever you go to place a buy or a cell
19:13
Speaker 1: you're going to need to know that ASX code to
19:15
Speaker 1: be able to make that transaction. It is not complex, right,
19:19
Speaker 1: National Australia Bank BECK their ticker code is NAB WOW
19:24
Speaker 1: it's easy, right, it's actually not complex. They're not these
19:26
Speaker 1: codes that you're not going to know. It's not like
19:28
Speaker 1: a Wi Fi password. No, it's not like a Wi
19:30
Speaker 1: Fi password. It's not something that you're going to get
19:32
Speaker 1: confused by. And once you have your investment portfolio, these
19:36
Speaker 1: ticker codes are basically going to be attached to everything,
19:39
Speaker 1: so you know, if you're looking at your investment, it
19:42
Speaker 1: will usually have like your ticker code in brackets always,
19:45
Speaker 1: so you know what you're looking at, because some things
19:47
Speaker 1: are really similar. Right, Like as I said before, Vanguard
19:51
Speaker 1: they're one of the biggest issuers of ETFs in Australia.
19:54
Speaker 1: I've got heaps of them, so sometimes I even get
19:57
Speaker 1: confused about looking at what the different ETFs are, but
20:00
Speaker 1: I know the ticker codes and that's what helps me
20:02
Speaker 1: decipher it. Most ASX listed companies have three characters in
20:08
Speaker 1: their ticker codes. Most ETFs have four characters in their
20:14
Speaker 1: ticker code. So start there, won't get too much into it.
20:17
Speaker 1: I'm actually releasing an investment course later this year and
20:21
Speaker 1: we'll like deep dive into absolutely everything so that you
20:24
Speaker 1: guys become actual financial investment wizards. More on that later,
20:30
Speaker 1: but Essentially, you'll have your ticker code, you'll key it in,
20:33
Speaker 1: and then you just place an order to purchase in
20:36
Speaker 1: exactly the same way that you do buy address on
20:39
Speaker 1: the Iconic. It's not complex. You don't need to, you know,
20:42
Speaker 1: fill in any more forms. You just get your platform,
20:46
Speaker 1: get it sorted, put all your info on there, and
20:48
Speaker 1: then whenever you want to invest, you go on there,
20:51
Speaker 1: you pick it, you kit by, it's attached to your
20:54
Speaker 1: bank account. Everything will be all good. Same thing when
20:57
Speaker 1: it comes to selling. I feel like, don't want this
20:59
Speaker 1: investment anymore. I want to get rid of it. You
21:01
Speaker 1: hit cell and it basically gets refunded into your account.
21:05
Speaker 3: This is really good to know because my brain for
21:07
Speaker 3: some reason, like even if I'm going it's complex, Yeah,
21:10
Speaker 3: like I need to know every single step before you
21:14
Speaker 3: know I do it to actually do it.
21:15
Speaker 1: Your job after that is to log into the platform,
21:19
Speaker 1: watch its performance. Don't do it too often because analysis paralysis.
21:23
Speaker 1: But like, we're investing for the long term, so keep adding,
21:27
Speaker 1: keep growing, and then essentially we're just gonna get really rich.
21:30
Speaker 3: Right that love, that's our plan, that's the goal. Let
21:33
Speaker 3: your hair down, watch it grow, maybe see how.
21:35
Speaker 1: We go anytime you let your hair down, Beck, I
21:37
Speaker 1: swear you just cut it off or bleed it. So, like,
21:40
Speaker 1: I don't know if that's good advice, probably very risky.
21:43
Speaker 3: We will keep it up. I'll keep it up. Okay.
21:45
Speaker 3: So with ETFs, what actually makes a good ETF? Like
21:48
Speaker 3: is it cheapest? Is it best performing? Is it one
21:51
Speaker 3: that's been around for the longest, or like most reliable?
21:54
Speaker 1: At least I could give you an answer on that.
21:56
Speaker 3: Yeah, I'd a feeling you'd say something.
21:58
Speaker 1: Like this, Yeah, I feel like I'm a little bit
22:00
Speaker 1: of a broken record, nor I try to trick you. Yeah, okay.
22:03
Speaker 1: So is the cheapest to the best not necessarily, Beck,
22:07
Speaker 1: because sometimes you pay peanuts and you get monkeys, right, Like,
22:10
Speaker 1: you might be looking at ETFs and starting to get
22:13
Speaker 1: a little bit of analysis paralysis because you're like, you know,
22:16
Speaker 1: literally comparing them and going, all right, well, the fee
22:19
Speaker 1: on this is point five and the fee on this
22:21
Speaker 1: is point six. Oh is it worth the extra fee? Like,
22:23
Speaker 1: I don't know, I want the cheaper one, and then
22:25
Speaker 1: you might go with the cheaper one. But sometimes when
22:29
Speaker 1: you pay peanuts, you get monkeys. And you know, we
22:32
Speaker 1: all know the story of you know, even just buying
22:34
Speaker 1: school shoes.
22:35
Speaker 2: Right.
22:35
Speaker 1: We all know that if you buy the cheapest school shoes,
22:38
Speaker 1: you're going to replace them more often and it might
22:39
Speaker 1: cost you longer in the long term than just buying
22:42
Speaker 1: the good investment at the start and wearing them for
22:46
Speaker 1: twelve months. Right, But that is not all it comes
22:49
Speaker 1: down to. It also comes down to returns. And after
22:52
Speaker 1: the break, I'm going to be talking to you about
22:54
Speaker 1: I guess the returns of the top five performing ETFs.
22:58
Speaker 1: And what I want to be really clear you're about
23:00
Speaker 1: is this is not normal, Like these are the top
23:03
Speaker 1: five performing ETFs. It's actually really impressive. But we're talking
23:07
Speaker 1: about like nearly fifty percent return on some of these ETFs.
23:11
Speaker 3: Beck.
23:12
Speaker 1: We're not talking about the average return of the Australian
23:15
Speaker 1: share market.
23:16
Speaker 3: Beck.
23:16
Speaker 1: Here, we're talking about, you know, those top five performing
23:20
Speaker 1: ETFs from twenty twenty three, because if we did and
23:24
Speaker 1: we actually looked at the average rate of return of
23:27
Speaker 1: the Australian market in twenty twenty three, if we look
23:30
Speaker 1: at the SMP two hundred. So the SMP is a
23:33
Speaker 1: very American term and it's something that I like to
23:36
Speaker 1: talk about quite often. So it's the standard and pause
23:39
Speaker 1: five hundred, which is basically the top five hundred companies
23:43
Speaker 1: in a share market. In Australia, we just call it
23:47
Speaker 1: like the ASX two hundred or what not. And here
23:50
Speaker 1: in Australia, if we actually looked at the ASX Top
23:53
Speaker 1: two hundred, which it's sicker code bec is XJO, the
23:58
Speaker 1: average rate of return in twenty twenty three was seven
24:00
Speaker 1: point eight percent. Okay, so that's pretty good as a return.
24:04
Speaker 1: It's modest, it's normal. You know, the average historical benchmark
24:08
Speaker 1: is nine point three for the ASEX Top two hundred.
24:12
Speaker 1: And I guess much of this return when you look
24:15
Speaker 1: at the I guess basket of shares, right, So this
24:17
Speaker 1: basket of shares that we're talking about right now, Beck
24:19
Speaker 1: has two hundred shares in it, two hundred different assets.
24:23
Speaker 1: But much of the return of the ASEX Top two
24:26
Speaker 1: hundred actually comes from the top twenty shares in that basket, Okay,
24:33
Speaker 1: So the rest of it's for diversification and exposure. Obviously
24:38
Speaker 1: there's like more prominent waiting inside those top twenty shares.
24:42
Speaker 1: But it's really important to understand once we get into it,
24:45
Speaker 1: that sometimes when picking an ETF, it slow and steady
24:49
Speaker 1: wins the race. We're not trying to shoot the lights
24:52
Speaker 1: out and try and you know, find the next crypto.
24:54
Speaker 1: We're not trying to you know, invest in an after
24:56
Speaker 1: pay which has really high returns. And all your friends
24:58
Speaker 1: at the pub said that that was a really good idea,
25:00
Speaker 1: do you know what I mean? So I think we
25:02
Speaker 1: need to contextualize it, because are we going for the
25:04
Speaker 1: highest returns? No, I've never ever ever beg picked an
25:08
Speaker 1: ETF for a client when I was working as a
25:10
Speaker 1: financial advisor based on the returns it had. I would
25:13
Speaker 1: be picking an ETF because aligned to my client's values. Obviously,
25:17
Speaker 1: as a hygiene factor, you want them to be performing.
25:20
Speaker 1: If an ETF over a long period of time is
25:23
Speaker 1: not performing, you might rebalance the portfolio and replace it
25:26
Speaker 1: with something that does, because it's obviously important to get returns.
25:30
Speaker 1: But sometimes picking an ETF that is going to be
25:34
Speaker 1: tried and true and steady, and you're like, you know
25:37
Speaker 1: what it's going to do what it says on the
25:39
Speaker 1: serial packet, sometimes that's way better than trying to shoot
25:43
Speaker 1: the lights out. And I can guarantee we did this
25:46
Speaker 1: episode last year. We did the top five ETFs of
25:48
Speaker 1: twenty twenty two. I have since looked at those top
25:52
Speaker 1: five ETFs and yeah, they definitely don't have the same
25:55
Speaker 1: performance the year after. So if you're going to listen
25:58
Speaker 1: to this episode and go, oh, vise've done the top
26:00
Speaker 1: five ETFs twenty twenty three, we're gonna go invest in them.
26:04
Speaker 1: Terrible idea. Okay, just because they performed this year. Sure,
26:09
Speaker 1: I mean they're going to do it again. I mean
26:11
Speaker 1: they might, but like I can't guarantee that.
26:14
Speaker 3: No, I mean rogue. And sometimes it's kind of like,
26:17
Speaker 3: why did you make so much money in such a
26:19
Speaker 3: short amount of time? Surely that's unsustainable. But who am I?
26:22
Speaker 3: I know, financial advisor, but.
26:23
Speaker 1: You're getting there, Like this year bexied is going to
26:27
Speaker 1: be an.
26:27
Speaker 3: Investor qualified financial advisor, no unqualified investor.
26:32
Speaker 1: I think is probably what we could reduce it too happy,
26:35
Speaker 1: But I reckon we should go to a really quick break.
26:37
Speaker 1: I really wanted to get into what the top five
26:39
Speaker 1: ETFs were for twenty twenty three. We're going to look at,
26:42
Speaker 1: you know, the average return, We're going to look at
26:44
Speaker 1: the fees, We're going to look at the performance. I
26:46
Speaker 1: think something that you'll be really surprised about is a
26:48
Speaker 1: lot of these onns are brand new, so that'll be
26:51
Speaker 1: really fun. Guys, don't go anywhere because it's about to
26:54
Speaker 1: get a little bit SPICYO.
27:01
Speaker 3: Okay, welcome back everyone. Now at the moment, we've all
27:04
Speaker 3: been absolutely dying.
27:06
Speaker 1: For, have we You're so dramatic. I love it. Tell
27:09
Speaker 1: us it's like me, I'm like, I will die if
27:11
Speaker 1: I don't get a frozen coach.
27:13
Speaker 3: I honestly think I might die if you don't tell
27:15
Speaker 3: us in the next three minutes.
27:17
Speaker 1: All right, all right, right, let me get into it.
27:18
Speaker 1: I've obviously got the top five. I have sourced these
27:21
Speaker 1: from the ASX. This is from twenty twenty three. The
27:26
Speaker 1: period ending is the thirtieth of November, which is a
27:29
Speaker 1: very normal reporting period. So if you went and googled
27:32
Speaker 1: these right now and what their returns are, their returns
27:34
Speaker 1: are not going to be what I am reporting on
27:36
Speaker 1: this podcast, because I have just done the reporting to
27:40
Speaker 1: November twenty twenty three. Because we're looking at like a
27:42
Speaker 1: defined period, not something that's moving like what happened last year, Beck,
27:45
Speaker 1: not what's happening now what happened last year. So I'm
27:49
Speaker 1: gonna go lowest performing all the way through to like
27:53
Speaker 1: the number one highest performing asset. We have numbered these
27:57
Speaker 1: based on return, not on fees or anything like that.
28:01
Speaker 1: So let's kick it off. Are you ready?
28:03
Speaker 3: I'm so ready.
28:04
Speaker 1: Coming in At number five, we have the Global X
28:08
Speaker 1: Semiconductor ETF.
28:10
Speaker 3: Okay, something to do with trains. No, I just think
28:13
Speaker 3: of Tom's tank engine.
28:14
Speaker 1: I mean, you're not that far off, Beck. The description
28:17
Speaker 1: of this ETF is the Global X Semiconductor ETF. Ticker
28:21
Speaker 1: code is SEMI seeks to invest in companies that stand
28:25
Speaker 1: to potentially benefit from the broader adoption of tech enabled
28:30
Speaker 1: devices that require semiconductors. This includes the development and manufacturing
28:36
Speaker 1: of semiconductors.
28:39
Speaker 3: So I don't know what sounds so funny to me?
28:41
Speaker 3: It is, okay, so niche.
28:42
Speaker 1: If I look at the top holdings in this ETF,
28:45
Speaker 1: I can almost guarantee you've never heard of them. So
28:48
Speaker 1: number one holding at ten point eight one percent of
28:51
Speaker 1: their portfolio is broad Colm Inc. Number two at nine
28:55
Speaker 1: point two percent is TSMC. Then we have Nevada Corp.
29:01
Speaker 1: Then we have ASML holding Envy and all of these
29:04
Speaker 1: things that, honestly, as a financial advisor, I had never
29:06
Speaker 1: heard of either, which makes sense because it's actually a
29:09
Speaker 1: relatively new ETF. Right, So if we have a look
29:12
Speaker 1: at the sector breakdown, ninety nine percent of this sector
29:15
Speaker 1: breakdown is made up of information technology, and then you've
29:19
Speaker 1: got zero point one percent cash because sometimes ETFs will
29:23
Speaker 1: carry some cash just to be safe. They don't have
29:26
Speaker 1: much cash. If you look at a country breakdown, most
29:29
Speaker 1: of it comes from the United States, so sixty six
29:32
Speaker 1: percent of the assets they hold are based in the US.
29:35
Speaker 1: Then you've got twelve percent in Taiwan. You've got eleven
29:38
Speaker 1: point eight percent in the Netherlands. Then you've got Japan,
29:41
Speaker 1: South Korea, Germany and France, which makes sense as to
29:44
Speaker 1: why you and I haven't heard of them, because none
29:46
Speaker 1: of them for Australia makes sense. So what puts this
29:50
Speaker 1: at number five? Back I hear you asking. It's one
29:54
Speaker 1: year return of forty seven point ninety five percent?
29:58
Speaker 3: WHOA, How's that even wild possible?
30:02
Speaker 1: They just returned really well. Interestingly, they don't have a
30:06
Speaker 1: three or a five year return. Because this is a
30:08
Speaker 1: brand new ETF just entered the market, doesn't mean that
30:11
Speaker 1: it has had great return just because people have gotten
30:14
Speaker 1: in on it. It's inception date, so it's start date
30:17
Speaker 1: when it like kind of was invented is August twenty
30:20
Speaker 1: twenty one, and interestingly it's doing really well. But yes,
30:25
Speaker 1: this is something that I don't think any of us
30:27
Speaker 1: would have heard of prior to this podcast.
30:31
Speaker 3: Episode unless you're a semiconductor.
30:33
Speaker 1: But imagine if we've got in on that, then.
30:35
Speaker 3: I know that sounds incredible. But also we shouldn't because
30:39
Speaker 3: I'm the type that would rush into that and be like,
30:40
Speaker 3: oh my god, maybe I could still get on this train.
30:42
Speaker 1: Yeah, And I mean a lot of people are probably
30:44
Speaker 1: going to go and do a lot of research. I
30:46
Speaker 1: mean there's you know, if you go onto any website
30:50
Speaker 1: that does research on things that are listed, you'll find
30:54
Speaker 1: heaps of reasons why to invest. And also you've got
30:57
Speaker 1: to kind of take all of that with a grain
30:59
Speaker 1: of salt, you know. I do quite like global x
31:03
Speaker 1: as an ETF provider. They're nice people, they do a
31:06
Speaker 1: good job. I really like I guess how they evaluate
31:09
Speaker 1: performance at holdings in different characteristics. But if you went
31:13
Speaker 1: to their website global x and how to look at that,
31:16
Speaker 1: it's kind of a marketing platform as well. So I've
31:18
Speaker 1: just got to be careful when we're doing research that
31:21
Speaker 1: we know where our research is coming from, because obviously
31:24
Speaker 1: global X is going to put their best foot forward
31:26
Speaker 1: for their ETF and be like, here's this shiny marketing
31:28
Speaker 1: and here are the reasons to consider semi as in investment.
31:32
Speaker 1: Here are the reasons that you should look at, you know,
31:35
Speaker 1: investing in this in the future, and this is the
31:37
Speaker 1: next big thing. And basically every marketing page is going
31:40
Speaker 1: to say that. So if I were I would be
31:41
Speaker 1: looking a bit broader than just the marketing websites for
31:45
Speaker 1: the ETF that you know is owned by that company.
31:48
Speaker 3: Does that make sense, Yeah, it totally does.
31:50
Speaker 1: Touching on fees right before we move on. Their fees
31:53
Speaker 1: are pretty reasonable, So I, as an ex financial advisor,
31:57
Speaker 1: would usually look at an ETF fee. I would call
32:00
Speaker 1: it reasonable. If it's one percent or below, okay, I'm
32:03
Speaker 1: usually pretty surprised. If it's more than one percent doesn't
32:07
Speaker 1: mean it's bad. Again, there's usually a really good reason
32:10
Speaker 1: for it. It could have more management, it could have,
32:12
Speaker 1: you know, a whole heap of other resources being thrown
32:14
Speaker 1: at it that you go, well, I'm having to pay
32:16
Speaker 1: extra for that. But usually ETFs have fees below one percent,
32:20
Speaker 1: and the Global ex Semiconductor ETF has a fee of
32:23
Speaker 1: point to five seven percent per annum.
32:26
Speaker 3: That sounds really good, not bad.
32:27
Speaker 1: Would you like to move on, my friend?
32:29
Speaker 3: Sure? Yeah, let's say number two. If that's the least. Wait,
32:33
Speaker 3: we're talking we're talking.
32:34
Speaker 1: About going lowest to highest lost highest in terms of return,
32:37
Speaker 1: in terms of return, So that's the least. That's the least.
32:40
Speaker 1: Forty seven was the worst that they did this year. Okay,
32:44
Speaker 1: So number four ETF is the Hyperion Growth Global Stunning. Yeah,
32:51
Speaker 1: I knew you'd know that was next. So if we
32:54
Speaker 1: look this one up, this says the fund seeks to
32:56
Speaker 1: achieve consistent average investment returns over a row five year
33:00
Speaker 1: period by investing in high quality, predictable businesses with superior
33:05
Speaker 1: growth prospects and attractive risk adjusted return profiles.
33:09
Speaker 3: Oh lovely.
33:10
Speaker 1: So this one again has an asset allocation that is
33:13
Speaker 1: semi similar to the first ETF we talked about. So
33:17
Speaker 1: this one has an asset allocation of ninety eight point
33:20
Speaker 1: ninety one percent of international equity and it's only carrying
33:24
Speaker 1: one point oh nine percent cash. So good to know,
33:28
Speaker 1: nothing too exciting. But this one has some assets that
33:31
Speaker 1: you might actually know. So if we look at the
33:33
Speaker 1: assets that the portfolio is made up of twelve point
33:36
Speaker 1: one five percent Tesla.
33:39
Speaker 3: Sounds familiar, familiar.
33:41
Speaker 1: Then you've got ten point eight nine percent of a
33:43
Speaker 1: company called service Now Inc. You then have Microsoft, Amazon, Spotify,
33:49
Speaker 1: work Day Block Inc. Meta Visa, and companies that you're
33:53
Speaker 1: probably gonna know sure, which should not come as a
33:57
Speaker 1: surprise because remember what we said, they are looking for
34:00
Speaker 1: consistent growth in relatively conservative companies. So you go, all right,
34:05
Speaker 1: well that makes sense. Hyperion sounds fancy, though.
34:08
Speaker 3: Does sound very fancy.
34:09
Speaker 1: I think this is a really good checking point as well,
34:12
Speaker 1: because if I'd said to you without the context I
34:15
Speaker 1: just provided, but let's talk about the Hyperion Global Growth ETF,
34:19
Speaker 1: you would have been like.
34:20
Speaker 3: I'm way out of my depth pre this episode exactly.
34:23
Speaker 3: I have pretended I didn't hear.
34:25
Speaker 1: But it's actually just a fancy name for the ETF,
34:27
Speaker 1: because you know what, if I had an ETF, I'd
34:29
Speaker 1: want it to have a good name too.
34:30
Speaker 3: I'll tell this beautiful name.
34:32
Speaker 1: Right, so we don't have to think about the name.
34:34
Speaker 1: Don't let the names overwhelm you if you're starting to
34:36
Speaker 1: do your ETF research, because honestly, you might go through
34:39
Speaker 1: this and be like, well, Actually, I do want exposure
34:42
Speaker 1: to Tesla and Microsoft and Amazon and Spotify and Workday
34:45
Speaker 1: and all of these companies that kind of make sense.
34:47
Speaker 1: I actually aligned to the values of this particular ETF
34:50
Speaker 1: might work for you, Right, It's not what we're here for.
34:53
Speaker 1: I'm just giving context because I feel like I like
34:55
Speaker 1: doing that. It's asx code is hy doubleg beck. It
35:01
Speaker 1: comes in at a one year return. Again, it doesn't
35:03
Speaker 1: have like our previous ETF three or five year returns.
35:07
Speaker 1: One year return of fifty three point six eight percent. Wow,
35:12
Speaker 1: that's so nice.
35:13
Speaker 3: Am I wrong in feeling like no three and five
35:15
Speaker 3: year return is like very disconcerting.
35:19
Speaker 1: No, I don't think so. And I think it's important
35:22
Speaker 1: to kind of weigh up the pros and cons. Okay,
35:25
Speaker 1: is it something that I would personally invest in? Look,
35:28
Speaker 1: I haven't done that. I'm a more tried to. Like,
35:31
Speaker 1: I really like a company that has, you know, consistent
35:35
Speaker 1: dividend payout and is actually quite steady. And a lot
35:39
Speaker 1: of the ETFs that I own do have the three, five,
35:42
Speaker 1: even ten year growth that it can report on, because
35:45
Speaker 1: that makes me feel comfortable that they've kind of been
35:47
Speaker 1: doing the job for a long time. Does that mean
35:50
Speaker 1: that it's a bad thing to invest in a company
35:53
Speaker 1: like this, No, because it's basically a global equity managed fund. Like,
35:57
Speaker 1: have a look at the company behind it. You know what?
35:59
Speaker 1: That company behind it might have been doing ETFs for
36:03
Speaker 1: thirty forty years and they've just created a brand new one.
36:06
Speaker 1: So that would take a bit of pressure off when
36:08
Speaker 1: it comes to oh, well who are they? That gives
36:10
Speaker 1: me anxiety and then you go, oh, am I actually anxious? Beck,
36:13
Speaker 1: if they've been doing this for fifty the years and
36:14
Speaker 1: they've just got a new product. Whereas if they are
36:18
Speaker 1: a brand new business putting ETFs into the market and
36:20
Speaker 1: don't have a tried, true track record, I'd be like, oh,
36:23
Speaker 1: that makes me feel a little bit uncomfortable. So we're
36:26
Speaker 1: just trying to keep ourselves safe. But the best way
36:28
Speaker 1: to keep ourselves safe is to keep ourselves educated and
36:31
Speaker 1: understanding what's happening. And this is what I mean when
36:34
Speaker 1: I talk about research, right, Like research sounds really overwhelming.
36:38
Speaker 1: But Beck, go and google top five ETFs. Now click
36:41
Speaker 1: into one of those profiles and look at what they hold.
36:44
Speaker 1: Do you know the companies? Does that make you comfortable?
36:47
Speaker 1: You know what we might talk to some of our
36:48
Speaker 1: listeners on the show and they'll be like, I would
36:51
Speaker 1: never invest in Tesla, Like, ill absolutely not going to
36:54
Speaker 1: support that. Cool, Well, maybe that's just not the etfu's
36:57
Speaker 1: move on. What's the next ETF you're going to look at?
37:00
Speaker 1: On the flip side, we might have someone who goes,
37:02
Speaker 1: oh my gosh, I love that, like this is made
37:04
Speaker 1: up of a whole heap of assets that I do
37:05
Speaker 1: want exposure to. I love this idea. Right, And obviously
37:10
Speaker 1: this fifty three point six eight percent growth pretty sexy,
37:14
Speaker 1: But we also need to realize that it's not just
37:16
Speaker 1: the ETF driving that growth. Right, Like, if we look
37:20
Speaker 1: at this portfolio that Hyperion has, twelve point one five
37:25
Speaker 1: percent of that portfolio is made up of Tesla, and
37:28
Speaker 1: we also know that one year return on Tesla in
37:31
Speaker 1: twenty twenty three was one hundred and fifteen point two three,
37:36
Speaker 1: So that's actually really high and it's driving a lot
37:40
Speaker 1: of the growth. We then drop down and look at
37:43
Speaker 1: the individual performance of each of the assets that are
37:46
Speaker 1: in that list and go, well, actually, it makes sense
37:49
Speaker 1: that Hyperion had you know, fifty three percent growth because
37:53
Speaker 1: the companies that hell did really well. We need to
37:56
Speaker 1: then dive deeper and go will they continue to perform
37:59
Speaker 1: as well as they did this year? Was their good
38:01
Speaker 1: reason as to why they performed as well as they
38:03
Speaker 1: did this year? Does that make sense?
38:05
Speaker 4: Yeah?
38:06
Speaker 3: Definitely.
38:06
Speaker 1: So to touch on fees, we said before we like
38:09
Speaker 1: anything below one percent BECK, and that is zero point
38:12
Speaker 1: seven percent four fees on hyperion.
38:15
Speaker 3: Very nice.
38:15
Speaker 1: Any questions from the class.
38:18
Speaker 3: Not yet good. I'm liking what I'm hearing.
38:21
Speaker 1: Is it exciting?
38:22
Speaker 3: Especially excited because I know those are the least turn
38:25
Speaker 3: But also I feel like when we start to talk
38:27
Speaker 3: about the top five and I break it down, you go, oh,
38:29
Speaker 3: it's not that complicated, is it? It's making sense.
38:32
Speaker 1: Here is the NEXTDTF BECK coming in at number three
38:35
Speaker 1: with arguably one of the longer names that makes people
38:39
Speaker 1: feel overwhelmed. But we will break this down is the
38:42
Speaker 1: Global x Ultralong NASDAK one hundred hedge fund WHOA.
38:47
Speaker 3: Okay, I was going to try and repeat it after you,
38:50
Speaker 3: but I've.
38:50
Speaker 1: Got Global x ulter it on NASDAK one hundred hedge funds.
38:52
Speaker 1: WHOA Yep, that comes in at a one year return
38:56
Speaker 1: BECK eighty three point one nine percent.
38:59
Speaker 3: WHOA, Oh that is so wild?
39:02
Speaker 1: They have a three year return. I bet you're assuming
39:05
Speaker 1: it's going to be high, but it's actually five point
39:08
Speaker 1: six four percent. We will break it down and explain
39:13
Speaker 1: exactly how this has happened. So first things first, let's
39:16
Speaker 1: talk about the actual product.
39:17
Speaker 3: Sure.
39:18
Speaker 1: The Global x Ultralong Nasdaq one hundred Hedge Fund, which
39:21
Speaker 1: we could just use the ticker code of l NAS,
39:25
Speaker 1: is an actively managed fund that aims to provide investors
39:29
Speaker 1: with geared returns. So geared returns means there is money
39:33
Speaker 1: being borrowed to be invested that are positively related to
39:37
Speaker 1: the return of the NASDAQ one hundred index by investing
39:41
Speaker 1: primarily in a portfolio of long E mini NASDAQ one
39:46
Speaker 1: hundred futures contracts listed on the Chicago Mercantile Exchange.
39:52
Speaker 3: I am so sorry. I don't know.
39:54
Speaker 1: No, I just thought that you already knew that.
39:56
Speaker 3: What's an e mini?
39:58
Speaker 1: Yeah, we'll get to that, Okay. The OBJECTI of this
40:00
Speaker 1: fund is to provide investors with positively geared exposure to
40:03
Speaker 1: the Nasdaq one hundred.
40:05
Speaker 3: Positively geared borrowed money, yes, okay.
40:08
Speaker 1: Geared investment means that it is borrowed money, it's currency hedged,
40:14
Speaker 1: so that means that exposure to currency movements between I
40:18
Speaker 1: guess the US dollar and the Australian dollar is reduced.
40:21
Speaker 1: Doesn't mean it's eliminated completely. But hedging, you know how
40:25
Speaker 1: like the currency goes up and down, hedging means it's
40:28
Speaker 1: a little bit more stable. It does go up and
40:30
Speaker 1: down a little bit. But it's really important to understand
40:33
Speaker 1: what hedged versus unhedged means. Unhedged literally just means that
40:37
Speaker 1: they're not accounting for any like currency changes. So this one,
40:42
Speaker 1: being a hedge fund, I'm unable to break it down
40:45
Speaker 1: for you, so I can't go all right, Their biggest
40:47
Speaker 1: holding is abc D and E because what they actually
40:51
Speaker 1: track is the Nasdaq one hundred index, and that is
40:54
Speaker 1: one of the world's most I guess pre eminent large
40:57
Speaker 1: cap So large cap just means a big company indices
41:01
Speaker 1: it has some of the planet's most iconic companies. So
41:04
Speaker 1: essentially it includes one hundred of the largest American domestic
41:08
Speaker 1: and international non financial companies that are listed on the
41:11
Speaker 1: Nasdaq stock market. And essentially it has a market cap
41:16
Speaker 1: of fifteen trillion dollars back and the Nasdaq one hundred
41:21
Speaker 1: essentially has proven growth history, impact and performance. Like I'm
41:26
Speaker 1: assuming you've heard of the NASDAK before, whether you understand
41:29
Speaker 1: it or not, it's a word that it's on the
41:32
Speaker 1: telly all the time. It makes a lot of sense.
41:34
Speaker 1: It's made up of I guess the world's most popular companies,
41:37
Speaker 1: so I can guarantee you'll see Apple, Google, Intel, Tesla,
41:41
Speaker 1: all of those types of companies in there, and of
41:45
Speaker 1: this technology companies make up about fifty percent of the
41:48
Speaker 1: Nasdaq waiting, but all the listed companies are essentially what
41:53
Speaker 1: they call disrupting markets, which is essentially new technology, which
41:57
Speaker 1: you know makes a lot of sense. But essentially what
42:00
Speaker 1: they're looking for is companies that accelerate change and have
42:04
Speaker 1: what they are deeming to be out of the box
42:07
Speaker 1: and robust solutions. So obviously they put it together. It's
42:11
Speaker 1: been around for a little while, first couple of years,
42:14
Speaker 1: Like during this economy five point six y four, you
42:17
Speaker 1: wouldn't be super angry, you'd be all right, not the
42:20
Speaker 1: worst I reckon. A few people were like, what the
42:23
Speaker 1: her can when they have found out that in twenty
42:25
Speaker 1: twenty three they had an average rate of return of
42:27
Speaker 1: a three point one nine percent.
42:30
Speaker 3: That's incredible.
42:30
Speaker 1: Wouldn't be mad? Oh, I'd probably keep my money in there. Actually, yeah,
42:34
Speaker 1: would I invest more in it now? Though maybe not,
42:37
Speaker 1: because past performance is not a reliable predictor of future performance.
42:41
Speaker 1: Back just because they did it in one year doesn't
42:44
Speaker 1: mean they are going to do it consistently.
42:46
Speaker 3: Yes, very true.
42:47
Speaker 1: So we need to be really careful that we don't
42:48
Speaker 1: kind of buy into the hype and go, oh my gosh,
42:51
Speaker 1: this is great, because remember how that happened with the
42:53
Speaker 1: after pay shares, and every man and his dog in
42:55
Speaker 1: every officer around Australia was like, did you get after
42:57
Speaker 1: pay chares? And then everyone bought them? And then everyone
42:59
Speaker 1: lost my because they are buying them purely based on hype,
43:02
Speaker 1: not because they're done market researches. Yeah, so we don't
43:05
Speaker 1: want to be the afterpay guys, right, all right? So
43:08
Speaker 1: that is the global x Ultralong NASDAK one hundred hedge fund.
43:12
Speaker 1: Do you want to know what the fee is and
43:13
Speaker 1: then we'll go to number two?
43:14
Speaker 3: Yeah, good idea.
43:15
Speaker 1: The fee is a flat one percent.
43:16
Speaker 3: Okay, okay, okay, that's fine, that's fine.
43:20
Speaker 1: Literally anything one percent or below we're not mad about,
43:22
Speaker 1: not mad, all right?
43:24
Speaker 3: Cuting it fine.
43:25
Speaker 1: The next one coming in at number two. It's actually
43:28
Speaker 1: another global x ETF beck doing very well. It's global
43:32
Speaker 1: x Fang plus ETF. Okay, fancy doesn't that it does,
43:37
Speaker 1: So the global x Fang plus ETF. It's ticker code
43:41
Speaker 1: is going to come as no surprise. It is fang easy.
43:44
Speaker 1: It seeks to invest in companies at the leading edge
43:47
Speaker 1: of next generation technology that includes household names and some newcomers,
43:52
Speaker 1: So that's nice for them. Do you know what the
43:54
Speaker 1: performance on that was?
43:56
Speaker 2: What?
43:57
Speaker 1: Eighty four point two nine percent twenty three these technology companies.
44:02
Speaker 3: I feel like that's the main theme here, is a
44:05
Speaker 3: lot of like techy sort of five.
44:07
Speaker 1: It does have historical performance, so not five year, but
44:10
Speaker 1: it does have three year because it's inception date so
44:13
Speaker 1: essentially the date it was born is February twenty twenty.
44:17
Speaker 1: So it's three year return. Pretty good to be honest.
44:21
Speaker 1: Seventeen point zero three percent.
44:23
Speaker 3: Oh that is good.
44:24
Speaker 1: That's good for a three year return, especially in this economy. Yeah, seriously,
44:28
Speaker 1: like after twenty twenty getting that greater performance, right, we're
44:32
Speaker 1: not mad. Eighty four point two nine percent though, that's
44:35
Speaker 1: pretty exciting.
44:36
Speaker 3: Yeah, that's really good.
44:37
Speaker 1: ETF is made up of a number of assets you
44:40
Speaker 1: would have heard of before. So you have Meta as
44:44
Speaker 1: the number one holding, coming in at ten point six
44:46
Speaker 1: three percent of the portfolio. Then you have Alphabet, Tesla, Netflix, Microsoft, Amazon, Broadcom, Apple,
44:54
Speaker 1: all these companies That kind of makes sense. It's obviously
44:57
Speaker 1: got a lot more, but those are some of the top.
45:00
Speaker 1: When it comes to fees, Global ex Fang Plus ETF
45:05
Speaker 1: has a fee of point three to five.
45:07
Speaker 3: Oh that's very good.
45:08
Speaker 1: A lot lower.
45:09
Speaker 3: Expecting something higher for some reason or don't know.
45:12
Speaker 1: Yeah, I expected a little bit higher, but I'm not
45:14
Speaker 1: surprised because it is more of a traditional etfure. So
45:19
Speaker 1: when it's a more traditional ETF it does what it
45:22
Speaker 1: says on the box you're usually looking at. I would
45:24
Speaker 1: say under zero point six percent in fees when they
45:28
Speaker 1: become a little bit more managed. So before we were
45:30
Speaker 1: talking about Hyperion, their fee was point seven because it's
45:34
Speaker 1: a bit more managed. Then you've got a hedge fund,
45:38
Speaker 1: which obviously involves a lot more admin because they're doing
45:40
Speaker 1: the hedging, and it was geared that came in at
45:43
Speaker 1: one percent, and that made a lot of sense to
45:45
Speaker 1: me because I was like, well, there's a bit more
45:46
Speaker 1: complexity in this particular asset as opposed to know a
45:51
Speaker 1: straight ETF where they've picked a whole bunch of shares,
45:53
Speaker 1: popped them in the basket and caught it a day.
45:55
Speaker 3: So its on at the.
45:56
Speaker 1: Breakdown because I'm excited about this all the time. Percent.
46:00
Speaker 1: So basically, half of this ETF is made up of
46:03
Speaker 1: information technology, thirty one percent is communication services, nineteen point
46:08
Speaker 1: nine percent is consumer discretionary sector, and then it has
46:11
Speaker 1: point one percent cash. So these ETFs, the thing that
46:14
Speaker 1: I'm seeing that they have all in common is they're
46:16
Speaker 1: not carrying much cash all because cash doesn't have.
46:19
Speaker 3: Good returns, No, certainly doesn't.
46:21
Speaker 1: So again country breakdown, ninety nine point ninety five percent
46:24
Speaker 1: of the company's in this ETF for American Classic no surprise. No,
46:29
Speaker 1: I can see you are waiting on bated breath. Beck,
46:32
Speaker 1: I am you liken't just tell me the number one.
46:34
Speaker 1: I don't even care about fang anymore.
46:36
Speaker 3: If the second highest is eighty four, I'm dying to
46:41
Speaker 3: know what number one.
46:42
Speaker 1: Is, all right, So number one has a return of
46:44
Speaker 1: ninety one zero point six zero percent. Whoh, that's like
46:49
Speaker 1: photomically three. Basically that's a good deal.
46:52
Speaker 3: That's very, very very good.
46:54
Speaker 1: I would like that consistently in my portfolio. Unobtainable, unrealistic.
46:58
Speaker 1: But that's not the point, right, too much to ask?
47:00
Speaker 1: Is it too much to ask to get consistently good returns?
47:04
Speaker 1: So this fund, I think is a bit rogue, And
47:07
Speaker 1: I say it's a bit rogue because I'm looking at
47:09
Speaker 1: it going of course you are, of course you are.
47:12
Speaker 1: Do you know what it's called?
47:14
Speaker 3: What is it?
47:15
Speaker 1: It's the beta shares. We like Beta shares if you
47:17
Speaker 1: haven't heard of them, they are a really good ETF
47:20
Speaker 1: provider here in Australia. The Beta Shares Crypto Innovators ETF.
47:25
Speaker 1: Oh crypto, I who knows how I feel about crypto?
47:28
Speaker 3: Yeah, this seems very controversial.
47:31
Speaker 1: It's a little bit spicy. But did you know you
47:34
Speaker 1: can buy crypto in the form of an ETF on
47:36
Speaker 1: the AX that you didn't know that?
47:39
Speaker 3: Oh? The ETF is crypto.
47:41
Speaker 1: It invests in crypto technology companies. So the fund objective
47:46
Speaker 1: is to track the performance of an index before fees
47:48
Speaker 1: and expenses. That provides exposure to global companies at the
47:52
Speaker 1: forefront of the dynamic crypto economy. So you're investing in
47:57
Speaker 1: companies that are you know, working with crypto working on crypto.
48:02
Speaker 1: I'm on the Beta shares website. So again, some of
48:04
Speaker 1: this is definitely marketing, but it does explain it very simply.
48:08
Speaker 1: But essentially cryp is their ticker code. It invests in
48:13
Speaker 1: up to fifty different crypto leaders like coinbase, Riot, Blockchain,
48:18
Speaker 1: micro Strategy, and more. So these are all crypto providers.
48:23
Speaker 1: You're not investing in the actual cryptocurrency, so you're not
48:26
Speaker 1: going to buy the bitcoin, beck You're investing in the
48:28
Speaker 1: company that makes a bitcoin.
48:30
Speaker 3: Okay, that feels a bit better, makes.
48:32
Speaker 1: More sense, right, So if we look at this, as
48:34
Speaker 1: I said, one year return ninety one point six zero percent,
48:38
Speaker 1: it doesn't have three or five year return. Because this
48:40
Speaker 1: is one of the first, if not the first crypto
48:44
Speaker 1: ETF that has been accessible in our market. Its fees
48:48
Speaker 1: are very good given you know, I would kind of
48:51
Speaker 1: have expected a cryptocurrency ETF to be a bit higher
48:55
Speaker 1: purely because there's more research, it's a newer emerging market rara.
48:58
Speaker 1: But it's point six seven percent. Oh, very reasonable, not
49:01
Speaker 1: too bad. If we then have a look at the
49:04
Speaker 1: portfolio holding, so like, what is that investment actually made
49:07
Speaker 1: up of? Sure, fifteen percent is a company called Marathon
49:10
Speaker 1: Digital Holdings, obviously a tech crypto company. Coinbase comes in
49:15
Speaker 1: at nine point four percent, Galaxy Digital Holdings is nine
49:18
Speaker 1: point three percent, and then it goes through Riot Platforms,
49:22
Speaker 1: Micro Strategy, Bit Farms, Northern Data, Applied Digital Corp, HUT
49:26
Speaker 1: eight Corp, and Bank Holdings. So all of that obviously
49:31
Speaker 1: makes not a lot of sense if you don't follow crypto,
49:33
Speaker 1: but all of those companies are creating cryptocurrency and trying
49:38
Speaker 1: to make it the future, which I think is really cool.
49:40
Speaker 1: When it comes to that, I guess sector allocation and
49:43
Speaker 1: that breakdown, you won't be surprised that application software companies
49:47
Speaker 1: make up fifty three percent of the portfolio. Then you've
49:51
Speaker 1: got financial exchanges and data asset management and custody banking,
49:56
Speaker 1: transaction and payment processing systems, diverse banks, and they do
50:02
Speaker 1: not hold any cash.
50:03
Speaker 3: You don't really need it.
50:04
Speaker 1: If we look at country though, you're not going to
50:07
Speaker 1: be surprised. Seventy six point six percent of this country
50:10
Speaker 1: allocation is made up of American businesses, then seven point
50:15
Speaker 1: seven percent, Canadian companies, four point six percent Germany. Then
50:18
Speaker 1: it goes China, Brazil, Australia one point five percent, Cayman Islands,
50:23
Speaker 1: which makes me laugh because it's so rogue. Usually the
50:27
Speaker 1: company is not in the Cayman Islands.
50:29
Speaker 3: Beck.
50:29
Speaker 1: It means that whoever owns the company has set up
50:33
Speaker 1: their banking in the Cayman Islands, which obviously is a
50:37
Speaker 1: little bits of a red flag because it's usually people
50:41
Speaker 1: trying to honestly legally avoid tax. Legally, it is legal
50:46
Speaker 1: to set up your company in the Cayman Islands, okay,
50:48
Speaker 1: but there will be good reasons as to why they
50:51
Speaker 1: do that, and they are usually to circumvent the laws
50:54
Speaker 1: in the country that they actually live in. I see,
50:56
Speaker 1: and then one point four percent of other So I
51:00
Speaker 1: find that really interesting. And the number one who would
51:03
Speaker 1: have thought wow is a crypto etf.
51:06
Speaker 3: Wow, and would not have thought I'd see the day.
51:09
Speaker 1: I didn't think i'd see the day. And if I
51:11
Speaker 1: had a grave, i'd be rolling in it.
51:13
Speaker 3: Haha.
51:13
Speaker 1: But that is okay. I think it's really interesting. Does
51:16
Speaker 1: that mean you guys should run out and go and
51:18
Speaker 1: invest in these ETFs? Absolutely not, that's a terrible idea.
51:22
Speaker 1: You need to do your research and understand what you're
51:25
Speaker 1: investing in and why. And obviously, as we went through
51:28
Speaker 1: the top five. There were good reasons as to why
51:31
Speaker 1: they had that type of growth and that type of return,
51:34
Speaker 1: And usually it wasn't the ETF itself, it was some
51:37
Speaker 1: of the holdings inside of that ETF, And we already
51:41
Speaker 1: identified Tesla was one of the main investments in a
51:45
Speaker 1: lot of those ETFs, and they're the ones that were
51:48
Speaker 1: carrying a lot of that weight. Yes, so interesting to
51:52
Speaker 1: know something to deep dive into. Hopefully that, like I
51:55
Speaker 1: don't know, sparks some people's interest in doing some more research,
51:58
Speaker 1: because I promise it's not that.
51:59
Speaker 3: Comp Yeah, it's scary.
52:01
Speaker 1: It's not scary. It's actually really interesting. And once you
52:04
Speaker 1: start looking at it, you're like, oh, they did what
52:06
Speaker 1: And then you go and look at another ETF and
52:07
Speaker 1: you're like, oh, spicy, who's that? Like, I promise it's
52:11
Speaker 1: way more exciting than it sounds before you've gotten involved.
52:14
Speaker 3: Yes, okay, I've got a bit of googling too. I
52:16
Speaker 3: also want to unpack this Cayman Island tax fiasco.
52:18
Speaker 1: So yeah, it's a bit spicy.
52:20
Speaker 3: Yeah, this sounds very douicy to me, but thank you
52:22
Speaker 3: so much for this has helped me.
52:24
Speaker 1: It's fun. I feel like this was a long one,
52:26
Speaker 1: but it was a good one.
52:26
Speaker 3: Long bit, goodie.
52:27
Speaker 1: We'll see you guys on Friday. Bye bye, guys.
52:36
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52:39
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52:43
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52:46
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