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

Episode Date: February 6, 2024

Here at She's On The Money we LOVE a list, and we know you do too. So buckle in as we count down the The Top 5 Performing ETFs in 2023! Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements.The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri 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 Awadjeri 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 podcast for people who want financial freedom. My name is Bec Syed and Victoria Devine is with me as always. V, what are we talking about today? I'm so excited. You're probably going to go, oh, the second I say this. But today, my friends, we are talking about the top five ETFs of 2023. Okay.

Oh, you're in? I'm kind of in, yeah. You're kind of in? Yeah. Why are you kind of in? I know we've spoken about ETFs 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 investing. And 2024 is the year of Beck starting TenVest. Yes, yes. And I feel like from the conversations we've been having not on the podcast, an ETF's what you're planning on picking, right? Oh, yeah. So, Slay, 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 dive in. I think 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 Sharesies 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, an ETF is an 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, Bec, 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 going to 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? Yeah. 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, this fund 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, Bec. So there are ETFs here in Australia of the top 100 companies, the top 200 companies in Australia, the top 500 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, Bec, 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 U.S., Bec, an ETF that only invests in companies who have women on their boards. Oh, that's cool. Right? So like you can nowadays find an ETF that reflects your values. Historically, it was kind of like just this big pooled fund of like you only get the top 200 or you only get the top 300. And you'd be like, you know what? I'd like to track 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 manages and you go, I'd like 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 $47, this ETF might cost $47, but by investing your $47, 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 an awful analogy. You know what, I'm just going to let you get away with that because I and everyone listening knows exactly what you meant by that. Thank you so much. So typically, Bec, an 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 100, 200, 300, 400, 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. So 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 dabble 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 bidder? Well, actually, if you're at a bar, Bec, and you say, I've got ETFs, you immediately look smarter and you can tell all your friends like, yeah, what ETF have you got? And you can start to sound a little bit like a finance bro. So social status is what we're looking for here. Yeah, absolutely. We're going for social status. I can go with that. So obviously that doesn't matter. And we all know

how I feel about finance bros talking about their assets 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 BHP as an option. That sounds familiar. You've 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 going to 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 back and, you know, they're off 15%. Your entire portfolio is then off 15% because you have 100% exposure to that asset. if you go with an ETF and you know it might be the top 100 companies on the ASX and you go great you're going to get those banks in there anyway one of them might have that negative 15 one of the other banks might be just on par another sector that is in the top 100 might have actually performed at 23 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 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 your bank account and stuff it's as easy as ordering a dress on the iconic that's easy enough it's too easy in my house it is way 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 Sharesies as an investing platform that just works for them right and this isn't even me plugging them it just sharesies does this lots of other places do this to give you access to the australian stock exchange but the benefit of sharesies is also they give you access to other exchanges as well around the world so with sharesies 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, Bec. So like 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're like, the 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. 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 for me yeah but it's actually not like they're making sure that any income is disclosed to the tax agents and actually that's really good because if the ATO happens to do an audit on a platform

which they can do, and finds that, you know, Miss Bex Syed hadn't put her 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. It means also sometimes these things are just attached to the ATO portal. So when you log in, 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. 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. If you are paying tax, that's sexy. Like it means, Bec, 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, Bec, I look at my portfolio and I'm like, like I hate this this sucks am 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 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. I am like rocking 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, well, yeah, it's kind of like a gateway drug, Bec. 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 lots 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 alcohol before and you're like, oh, 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 14. And I wouldn't know the difference between a Savvy Bee and a Chardonnay. Oh my God. That's white wine. White wine and maybe it's a little bit bubbly. No, those ones aren't bubbly, babe. I still don't know what anything is. If you become a bit of a wino, which I'm not right now because I'm pregnant. A sommelier. Yeah, but like on a base level, we all know there's red wine, there's white wine. Sure. There's sparkling, get some beers. But like if you went and spoke to a wine person, they'd be like, oh, do not offend us with that very bleak description. A Sauvblanc

looks like this. A Chardonnay looks like this. A Pinot Gris is very different to a Pinot Grigio. This one's got legs. But do you know how you find what you like? You drink. You try them. you try them. So that I think is a good analogy of what ETFs are kind of like. They're all going to be slightly different. You might look at a lot of ETFs and go, oh, but they kind of have the same top 10 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 committing to one at the very start and saying, this is the be all end all and I can never change. You can have a savvy bee and then you can go back up to the bar and be like, I want something different now. Yeah, exactly. does that make sense that is making a lot more sense so we're finding our taste we are researching our 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 v i don't even want a wine i want a water i want 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, I'm going to have a really nice savvy bee. And probably going to put an ice cube in it, but nobody judged me for that. You're kind of selling it to me. I'm going to try that.

You're 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 has 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 sell, 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, Bec, their ticker code is NAB. Wow, that'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. They'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. I 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. Exciting. But 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 by 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 hit buy it's attached to your bank account everything will be all good same thing when it comes to selling if you're like don't want this investment anymore want to get rid of it you hit sell yeah 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 you think it's really complex yeah like I need to know every single step before I 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 going to get really

rich right that's our plan that's the goal let your hair down watch it grow maybe we'll see how we go. Anytime you let your hair down, Bec, I swear you just cut it off or bleach it. So like, I don't know if that's good advice. Probably very risky. Maybe I'll 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? I wish I could give you an answer on that. Yeah. I had a feeling you'd say something like this. Yeah. I feel like I'm a little bit of a broken record. No, I tried to trick you. Yeah. Okay. So is the cheapest the best? Not necessarily, Bec, 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 0.5 and the fee on this is 0.6. 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 12 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 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 50% return on some of these ETFs back. We're not talking about the average return of the Australian share market back here. We're talking about, you know, those top five performing ETFs from 2023, because if we did, and we actually looked at the average rate of return of the Australian market in 2023, if we look at the S&P 200, so the S&P is a very American term, and it's something that I like to talk about quite often. So it's the Standard & Poor's 500, which is basically the

top 500 companies in a share market. In Australia, we just call it like the ASX 200 or what not. And here in Australia, if we actually looked at the ASX top 200, which it's ticker code Beck is XJO, the average rate of return in 2023 was 7.8%. Okay. So that's pretty good as a return. It's modest. It's normal. You know, the average historical benchmark is 9.3 for the ASX top 200 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, Bec, has 200 shares in it, 200 different assets. But much of the return of the ASX top 200 actually comes from the top 20 shares in that

basket. So the rest of it's for diversification and exposure. obviously there's like more prominent weighting inside those top 20 shares but it's really important to understand once we get into it that sometimes when picking an ETF it's 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 like I think we need to contextualize it because are we going for the highest returns no I've never ever ever

Beck 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 it 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 cereal 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 2022. 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, V's done the top five ETFs of 2023, I'm going to go invest in them. Terrible idea. Okay. Just because they performed this year, I mean, they're going to do it again. I mean, they might, but like, I can't guarantee that. No, I mean. It's really 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'm no financial advisor. But you're getting there. Like this year, Bex Syed is going to be an investor. Qualified financial advisor. No, So, unqualified investor, I think, is probably what we could deduce it to.

I'm happy that. But I reckon we should go to a really quick break. I really want to get into what the top five ETFs were for 2023. 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 funds are brand new. So, that'll be really fun.

Guys, don't go anywhere because it's about to get a little bit spicy. Okay, welcome back, everyone. Now, 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 Coke. I honestly think I might die if you don't tell us in the next three minutes. All right, all right, all right. Let me get into it. I've obviously got the top five. I have sourced these from the ASX. This is from 2023. The period ending is the 30th 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, 2023, because we're looking at like a defined period, not something that's moving. Like what happened last year, Bec? Not what's happening now. What happened last year? So I'm going to 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 Thomas

Tank Engine. I mean, you're not that far off, Bec. The description of this ETF is the Global X Semiconductor ETF, ticker code is S-E-M-I, 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 why it sounds so funny to me. It is 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 10.81% of their portfolio is Broadcom Inc. Number two at 9.2% is TSMC. Then we have Navida Corp. Then we have ASML Holding, NV, 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, 99% of this sector breakdown is made up of information technology. And then you've got 0.1% 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 66% of the assets they hold are based in the US. Then you've got 12% in Taiwan. You've got 11.8% 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, Bec? I hear you asking. It's one year return of 47.95%. Whoa. How's that even wild? Possible. Oh, they just returned really well. Interestingly, they don't have a three or a five year return because this is a

brand new ETF. It's just entered the market. Doesn't mean that it has had a great return And 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 2021. 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'd got in on that, Bec.

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 on to 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 because, you know, I do quite like GlobalX as an ETF provider. They're nice people. They do a good job. I really like, I guess, how they evaluate performance and holdings and different characteristics. but if you went to their website global x and had a look at that it's kind of a marketing platform as well so we'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 an 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 1% or below. Okay. I'm usually pretty surprised if it's more than 1%. 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 happy to pay extra for that. But usually ETFs have fees below 1%. And the GlobalX Semiconductor ETF has a fee of 0.57% per annum. That sounds really good. Not bad. Would you like to move on, my friend? Sure. Yeah. Let's see number two. If that's the least, wait, are we talking, we're talking like going lowest to highest? Lowest to highest in terms of return. In terms of return. So that's the least. That's the least. 47 was the worst that they did this year. Okay.

So number four ETF is the Hyperion Growth Global. Oh, 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 rolling 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 98.91% of international equity and it's only carrying 1.09% 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 12.15% Tesla. Sounds familiar. Sounds familiar. Then you've got 10.89% of a company called ServiceNow Inc. You then have Microsoft, Amazon, Spotify, Workday, Block Inc, Meta, Visa, and companies that you're probably going to know. Sure. Which should not come as a surprise because remember what we said, they are looking for consistent growth in relatively conservative of 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 check-in point as well, because if I'd said to you without

the context I just provided, let's talk about the Hyperion Global Growth ETF, you would have been like, I'm way out of my depth. Pre this episode, I would have pretended I didn't hear you. 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. Oh, totally. It's a 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 the values of this

particular ETF. Might work for you, right? That's not what we're here for. I'm just giving context because I feel like I like doing that. Its ASX code is HYGG. Bec, 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 53.68%. 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. Is it something that I would personally invest in? Look, I haven't done that. I'm a more tried true, 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 10 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 30, 40 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, Bec, if they've been doing this of 50 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, ew, absolutely not going to support that. Cool. Well, maybe that's just not the ETF for you. Let'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 53.68% growth is 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, 12.15% of that portfolio is made up of Tesla. And we also know that one year return on Tesla in 2023 was 115.23. 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, 53% growth because the companies that held did really well. We need to then dive deeper and go, will they continue to perform as well as they did this year? Was there 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 1% back and that is 0.7% for 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 amount of return. 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 next ETF, Bec, 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 GlobalX Ultra Long NASDAQ 100 hedge fund. Whoa. Okay. I was going to try and repeat it after you, but I've completely got it already. The GlobalX Ultra Long NASDAQ 100 hedge fund.

Whoa. Yep. That comes in at a one-year return, Bec. 83.19%. Whoa, that is so good. Wild. They have a three-year return. I bet you're assuming it's going to be high, but it's actually 5.64%. Huh. How does that work? We will break it down and explain exactly how this has happened. Thank you. So first things first, let's talk about the actual product. Sure. The Global X Ultra Long NASDAQ 100 Hedge Fund, which we could just use the ticker code of LNAS, 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 100 index by investing primarily in a portfolio of long e-mini NASDAQ 100 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 objective of this fund is to provide investors with positively geared exposure to the NASDAQ 100. Positively geared borrowed money.

Yes. So 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 A, B, C, D and E because what they actually track is the NASDAQ 100 index.

And that is one of the world's most, I guess, preeminent large cap. So large cap just means big company growth indices. It has some of the planet's most iconic companies. So essentially, it includes 100 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 $15 trillion dollars back. And the NASDAQ 100 essentially has proven growth, history, impact, and performance. I'm assuming you've heard of the NASDAQ before, whether you understand it or not. It's a word that'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 50% of the NASDAQ weighting, but all the listed companies are essentially what they call disrupting markets, which is essentially new technology, which 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, 5.64, you wouldn't be super angry. You'd be like, all right, not the worst. I reckon a few people were like, what the heck? And when they have found out that in 2023, they had an average rate of return

of 83.19%. That's incredible. Wouldn't they mad? No. 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, Bec, 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 afterpay shares? And every man and his dog in every office around Australia was like, did you get afterpay shares? And then everyone bought them and then everyone lost money because they were buying them purely based on hype, not because they'd done market research.

Yes. Yeah. So we don't want to be the afterpay guys. No. Right. All right. So that is the Global X ultra long NASDAQ 100 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 1%. Okay, okay, okay. That's fine. That's fine. Literally anything 1% or below, we're not mad about. Not mad. All right. Cutting it fine. The next one coming in at number two, it's actually another Global X ETF, Bec. They're doing very well. It's Global X FANG Plus ETF. Okay. That's easier. FANG sounds fancy, doesn't it? It does. So the GlobalX Fang Plus ETF, its 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. Oh. So that's nice for them. Do you know what the performance on that was? What? 84.29% in 2023. Wow. These technology companies, I feel like, that's the main theme here. There's a lot of like techie sort of vibe. 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, 2020. So it's three year return. Pretty good, to be honest. 17.03%. Oh, that is good. That's good for a three year return, especially in this economy. Yeah, seriously. Like after 2020, getting that greater performance, right? We're not mad. 84.29% though. That's pretty exciting. This 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 10.63% of the portfolio. Then you have Alphabet, Tesla, Netflix, Microsoft, Amazon, Broadcom, Apple, all these companies that kind of make sense. It's obviously got a lot more, but those are some of the top holdings. When it comes to fees, Global X-Fang Plus ETF has a fee of 0.35. Oh, that's very good. So that's a lot lower. I was expecting something higher for some reason. You reckon?

I don't know why. I expect it a little bit higher, but I'm not surprised because it is more of a traditional ETF. So when it's a more traditional ETF, it does what it says on the box. You're usually looking it, I would say under 0.6% in fees. When they become a little bit more managed, so before we were talking about Hyperion, their fee was 0.7 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 1% 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 a straight ETF where they've

picked a whole bunch of shares, popped them in the basket and called it a day. Sure. So if we look at the breakdown, because I'm excited about this all the time, 49%, so basically half of this ETF is made up of information technology, 31% is communication services, 19.9% is consumer discretionary sector, and then it has 0.1% cash. So these ETFs, the thing that I'm seeing that they have all in common is they're not carrying much cash at all. Because cash doesn't have good returns.

No, it certainly doesn't. So, again, country breakdown, 99.95% of the companies in this ETF are American. Classic. No surprise. No. I can see you are waiting on bated breath, Bec. I am. You're like, just tell me the number one, I don't even care about FANG anymore.

If the second highest is 84, I'm dying to know what number one is. All right, so number one has a return of 91.60%. Whoa, that's like doubling. 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? Is it 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 beta shares crypto innovators ETF. Oh, crypto. We all know 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 ASX? Bet 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. Okay. So you're investing in companies that are, you know, working with crypto, working on crypto. I'm on the BetaShares 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 50 different crypto leaders like Coinbase, Riot Blockchain, MicroStrategy, 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 back. You're investing in a 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, 91.60%. 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, but it's 0.67%. Oh, very reasonable. Not too bad. If we then have a look at the portfolio holdings, so like what is that investment actually made up of? Sure. 15% is a company called Marathon Digital Holdings, obviously a tech crypto company. Coinbase comes in at 9.4%. Galaxy Digital Holdings is 9.3%. And then it goes through Riot Platforms, MicroStrategy, BitFarms, Northern Data, Applied Digital Corp, Hut 8 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 53% of the portfolio. Then you've got financial exchanges and data, asset management and custody banking, transaction and payment processing systems, diversified 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. 76.6% of this country allocation is made up of American businesses. Then 7.7% Canadian companies, 4.6% Germany. then it goes China, Brazil, Australia at 1.5%, Cayman Islands, which makes me laugh.

That'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 bit 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 1.4% of other. So I just find

that really interesting. And the number one, who would have thought, is a crypto ETF. Wow. 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. 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, I see. 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 complex. Yeah, it's not 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 to do. I also want to unpack this Cayman Island tax fiasco.

Yeah, it's a bit spicy. Yeah, this sounds very juicy to me. But thank you so much, V. This has helped me. No, it's fun. I feel like this was a long one, but it was a good one. Long but a goodie. We'll see you guys on Friday.

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