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