Brilliant!! I am looking forward to the rest of the series. Key points of interest is criteria used to select an ETF, how to determine a investment strategy, how to balance regularly and the ‘triggers’ to rebalance and how do I manage ETF risk.
Hi can you run through again why the price of the share doesn't mean too much? What reflects the price of the share (is it the growth of the individual companies or is the demand of other people trying to trade for the fund? ) Thanks alot!
Hi I'm new to your podcast, and I'm really enjoying them, thank you very much. I have a question, do Australians have to buy Australian ETF? If we buy American ETF are we worse off because of the exchange rate?
Will get same return in absolute terms from the underlying shares, but it’s priced in AUD. so the returns will be different in the short to medium term. Long term though, especially with dollar cost averaging as the AUD/USD fluctuates, will likely be pretty similar. Easier with tax for the Australian version is my thinking
Usually they are the 200 biggest (or in the case of the SP500- 500 companies) by ‘market capitalisation’. Market cap is total number of shares outstanding for a given company x the share price. Basically, how much it would cost to buy the whole company outright. So ETF with too 200 shares will always be the biggest most expensive companies. As individual shares prices of those companies change, sometimes company number 201 gets bigger than company number 200. So at rebalancing time (once a month, once a quarter, depends on the individual ETF), they’ll sell company 200 and buy company 201. They’ll also rebalance each individual share as their ratio of market cap changes. Look up a list of market cap list of the SP500. Apple makes up 7% of it. Microsoft makes up 6.5%. In fact, the top 40 companies make up about 90% of the entire value of the SP500. Look at what that list looked like 20 years ago. And 40 years ago. See how the companies have changed positions. Look at what industries dominated at those times. Right now it’s tech. But in another 20 years, who knows! That’s why ETFs/index funds are so good. They automatically rebalance as time goes on and new industries pop up.
Hey Adam! Thanks for commenting and for the feedback. It’s worth noting we act under an Australian Financial Services Licence - and our FSG is available on the Rask website. Finally, I take your point more broadly - it’s important to understand what might seem like real-life examples could be somewhat fictional. Great comment and reminder though! Cheers! Owen
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Very informative! I've been watching you for a long time)
Brilliant!! I am looking forward to the rest of the series. Key points of interest is criteria used to select an ETF, how to determine a investment strategy, how to balance regularly and the ‘triggers’ to rebalance and how do I manage ETF risk.
Very useful and helpful. Going to check out the other parts of this series. Thank you for such an informative session. 😊
Looking forward to the series.. great work. ❤
Thanks for the explanation. Very insightful.
Love it looking forward to rest of series
Hi can you run through again why the price of the share doesn't mean too much? What reflects the price of the share (is it the growth of the individual companies or is the demand of other people trying to trade for the fund? )
Thanks alot!
This looks like a great channel. Kudos
Great series. Thank you guys.
Excellent explanation guys dividends not mentioned much
Hi I'm new to your podcast, and I'm really enjoying them, thank you very much. I have a question, do Australians have to buy Australian ETF? If we buy American ETF are we worse off because of the exchange rate?
Will get same return in absolute terms from the underlying shares, but it’s priced in AUD. so the returns will be different in the short to medium term. Long term though, especially with dollar cost averaging as the AUD/USD fluctuates, will likely be pretty similar. Easier with tax for the Australian version is my thinking
Great way to explain
If I need dividends in my retirement should be only buying ETF that pay dividends?
If ETF provider has 200 company share inside, can they add or remove shares based on market performance or are they just fix same 200 forever?
Usually they are the 200 biggest (or in the case of the SP500- 500 companies) by ‘market capitalisation’. Market cap is total number of shares outstanding for a given company x the share price. Basically, how much it would cost to buy the whole company outright.
So ETF with too 200 shares will always be the biggest most expensive companies. As individual shares prices of those companies change, sometimes company number 201 gets bigger than company number 200. So at rebalancing time (once a month, once a quarter, depends on the individual ETF), they’ll sell company 200 and buy company 201. They’ll also rebalance each individual share as their ratio of market cap changes. Look up a list of market cap list of the SP500. Apple makes up 7% of it. Microsoft makes up 6.5%. In fact, the top 40 companies make up about 90% of the entire value of the SP500. Look at what that list looked like 20 years ago. And 40 years ago. See how the companies have changed positions. Look at what industries dominated at those times. Right now it’s tech. But in another 20 years, who knows! That’s why ETFs/index funds are so good. They automatically rebalance as time goes on and new industries pop up.
Would you buy IOZ or IVV
Should of waited till the end covered
love your show, you are walking a fine line though be unlicensed with some comments
Hey Adam! Thanks for commenting and for the feedback. It’s worth noting we act under an Australian Financial Services Licence - and our FSG is available on the Rask website. Finally, I take your point more broadly - it’s important to understand what might seem like real-life examples could be somewhat fictional. Great comment and reminder though! Cheers! Owen
Ugh, so slow. The chocolate metaphor was dumb at best