What are the best Australian Bond ETFs?

Best Australian bonds ETFs
 

There seems to be an important investment asset that many Australians have forgotten.

This particular asset has proven time and time again to have great diversification benefits and provide steady, reliable income.

What asset is this you may ask?

The name is Bond…Fixed Income Bonds, and much like 007’s martini cocktails, when markets are “shaken, not stirred”, bonds can be a valuable part of your portfolio.

In this article we’ll show you why and what we look out for when selecting a bond ETF.
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Better investing on autopilot

Investing on autopilot
 
Almost 7 million Australians invested in direct shares or other securities such as Exchange Traded Funds (ETFs) in 2018, up from 6 million in 2015.

If you are one of these investors, or are considering starting investing, you should ask “How does Stockspot compare to managing my own investments online with, say, CommSec or NabTrade?”

Content:

  1. Build a diversified portfolio instantly
  2. Saves time and risk
  3. Helps you avoid mistakes
  4. Avoids costs like brokerage fees
  5. Keeps up with your situation and goals

 
Certainly the trend over the last 10 years has been towards more people investing themselves. The latest ASX Share Ownership Study highlighted that direct ownership of shares and ETFs has rocketed over the past decade, while interest in managed funds and professional advice has fallen.
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Top 5 reasons for portfolio diversification

Diversification tips
 

I spoke on Your Money’s Investing 101 segment this week with the ASX’s Rory Cunningham to share my top 5 tips on why you should diversify your investment portfolio. Here they are:

1. Diversification gives you a smoother ride

Diversification is about spreading your money across different investments to enjoy a smoother ride. It serves as a cushion to protect your basket when a few eggs crack.

Diversification is important for anyone who doesn’t want to experience stomach churning ups and downs in their portfolio which is what happens when you only own a few shares.

The theory on how to use diversification was pioneered by Harry Markwitz in his paper “Portfolio Selection” published in 1952.

He showed that by owning shares in different industries and countries as well as other asset classes like bonds, you could get a smoother portfolio return without sacrificing return. Markowitz later won the 1990 Nobel Prize in Economics for his work.
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Women and investing

Stockspot women investing
 

A dream for many women is to be financially independent and free from worry about money. The unfortunate thing is, it remains a dream for many.

The financial disparity between men and women in Australia is an important topic to address as we continue to see gender-based inequities present themselves.

We live in an age where women are predicted to outlive men by almost half a decade. This begs the question, what can women do differently over the course of their lives to help them achieve more financial independence and control?

We know that many women take time out of the workforce to care for children; that on average women’s remuneration is 21.3% less than men; that on average women retire with 37% less in super and on top of this, will outlive men.

It doesn’t feel like the odds are stacked in our favour does it? This sense of inequality leads to many women feeling disempowered, stressed and fearful of their financial futures.

How can we flip this so more women feel in control, positive and connected to their financial futures. What would it take to get there?
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What returns have Stockspot clients earned?

Stockspot client returns
 
Why some numbers matter more than others when you invest. We show which figures you should focus on and how Stockspot clients have done.

A couple of questions we often get asked by clients are:
‘How do my returns compare to others?’, and
‘What are the average returns earned by people like me?’.

Both are great questions and ones you should ask any investment adviser – more on that later. Let’s start with the basics on how Stockspot and others calculate returns.

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What are the best Global Share ETFs?

Global share ETFs
 
International share ETFs and U.S. share ETFs have had a huge increase in popularity for individual and SMSF investors in Australia.

As of 2019 there is over $17 billion invested in ETFs tracking global shares on the ASX. The largest and most popular track either a broad global index or the U.S. share market which is considered to be a proxy for global shares.

Each year we compare all 175+ ETFs in our ETF Report. Here we road test 12 popular Global share ETFs, comparing them across 5 factors, as well as summarising our favourites.
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Market predictions for 2019

Market predictions 2019
 
The start of the new year is a popular time to make predictions about the market.

A lineup of experts will confidently tell you which shares to buy, if property is going up or down, whether the RBA will raise or cut rates, where the Aussie dollar is heading and if the stock market will crash.

Expert market forecasts have been a pet peeve of mine for a long time. I’ve never understood why they’re so popular (to give or receive) in light of how terrible forecasters track records are.
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What I learnt at the ASX Investor Day

Chris Brycki ASX event
 

I recently presented at the ASX Investor Day in Sydney, which I was thrilled to be asked to do since the ASX has featured heavily in my life.

First winning the ASX share game as a school student, then as the work experience kid and more recently as the CEO of Stockspot.

The topic the ASX gave me was: ‘Why invest on the ASX? How to pick the best investments’.

I really enjoyed the opportunity to present to 300+ eager investors and hopefully provide some useful tips to help make them better investors.
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Index investing succeeds in down markets too

Index investing in down markets
 
Whenever markets fall, funds who use active stock picking or market timing strategies fire up their sales engines. Their pitch? That if you put your trust in their active strategy you won’t have to withstand the down periods that come with a ‘buy and hold’ strategy.

It’s a tempting story! Why go through the emotional roller-coaster of down markets if that part of investing is optional…
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How to build an awesome investment portfolio

portfolio-5-assets-banner
 
Clients sometimes ask us how we built the Stockspot portfolios, and why we selected 5 assets to invest in rather than 2, 3 or 10!

It comes down to the purpose of the Stockspot portfolios which is to maximise returns for each level of risk. Five assets allows us to give clients the best possible combination of returns, risk and costs.

To do this we leverage the benefits of diversification. Diversification simply means that by combining investments with different characteristics you can improve the quality of returns in your portfolio.

Quality of returns is measured by how much risk you need to take to earn a certain return. Since all investing involves taking some risk, the aim is to minimise the risk you need to take to earn the return you want. Diversification across assets enables you to take less risk to earn better returns.
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How to pick the best super fund

Best super funds
 
Stockspot’s Fat Cat Funds Report 2018 has once again found that fees make all the difference when it comes to your retirement savings. If your super funds charges you high fees, chances are you could be $250,000 worse off when you retire.

The Fat Cat Funds report looks at the performance of Australia’s largest superannuation funds. It names the funds that take advantage of Australians unwittingly paying away their retirement funds in superannuation fees.
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How to make the most of market dips

long-term-game-banner
 
Financial markets can be quite scary at times. Headlines like ‘$50 billion wiped from the ASX’ can make it difficult to stay the course and remain invested when shares are going up and down like a yo-yo.

First-time investors tend to sell when the market falls out of a fear it will continue to go down and never return.

Research shows people feel the pain of losses twice as much than the enjoyment of profits. It’s our fight-or-flight response, the amygdala part of our brain kicking into overdrive to avoid the potential for loss.

People don’t like uncertainty and will avoid risks if possible.
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Top five things to do before you invest

Palm trees
 
Investing is the best way to create long-term wealth and financial independence.

If you’re just starting out no doubt you’ve figured out that it can be confusing at first. There are lots of decisions to make so it’s important to make sure you’re prepared to give yourself the greatest chance of success.

With this in mind, here’s the five things we think everyone should consider before investing.
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Kids invest for free

Piggy bank
 
We’ve made investing for children free!

We all want the best for the little ones in our life. So naturally as investing evangelists we believe children should be able to benefit from investing in the same way adults can.

Which is why clients who invest on behalf of a child will no longer be charged fees for portfolios up to $10,000^.
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How super funds play the ratings game (Part 1)

Ferris wheel
 
It’s that time of the year again when super funds release their annual performance. This blog looks at how the funds twist their performance relative to other funds and indexing. The funds’ PR is parroted by the ratings agencies whose tables and good news story are accepted at face value by the media.

Firstly, we look at how funds manipulate their inclusion into the categories set by the ratings agencies.
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Do you own your investments?

Blue fence and padlock
 
Something you may not put a lot of thought into when you invest is how those investments are held. Sometimes investments aren’t legally owned by you but instead owned by another entity on your behalf. That may sound like a minor difference however there can be significant consequences when it comes to security, tax, costs and the portability of your portfolio.

Broadly investments can be held in 2 ways:

  • Directly by you on your own HIN (Holder Identification Number)

  • Indirectly via a commingled fund or omnibus account structure

Historically stock brokers used a direct ownership model, so each of their clients had their own individual investment account or HIN and all investments were registered on the ASX’s computer system called CHESS (Clearing House Electronic Subregistry System). If the stock broker went bust it didn’t impact the end client because their investments were safely separated.
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When is a good time to invest?

When is a good time to invest

One of the main challenges investors face is ‘when is the right time to invest?’

As an investor your aim is to make money, so naturally it’s tempting to try and time your entry into the market and wait for prices to fall to grab a bargain. The problem is investment markets can move quickly and you’re just as likely to miss out on making good returns by waiting to invest.

The truth is markets can go up, down and sideways over the short-term and it’s almost impossible to pick the top or bottom (even for professionals). However if you’re completely out of the market you have no way to benefit from the gradual increase in prices over time.

Thankfully, there is a way you can avoid the anxiety of investing, closing your eyes and hoping for the best! This is a simple investment strategy called dollar cost averaging.
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ETFs continue to disrupt the asset management industry

2018 Australian ETF Report
 
ETFs continue to be the biggest disruptor to the asset management industry and at the same time are blurring the lines between different styles of investing.

Over the past 15 years, over US$2 trillion has moved out of active funds and into index funds and ETFs. Globally the ETF market is projected to reach US$10 trillion by 2020 and be larger than the active managed fund market by 2027.
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What are the best industry super funds?

Not all industry funds are equal
 
Not all industry super funds are equal, here’s how to spot a good one.

The Productivity Commission recently released their draft report on superannuation efficiency and competitiveness. What they found mirrors our Fat Cat Funds Research that shows that while Industry super funds outperform Retail funds, there are plenty of areas for improvement.

Our 5th annual Fat Cat Funds Report, analysed over 2,000 super funds and 2,000 managed funds to see how they performed over 5 years.

Once again we found industry super funds beat retail super funds across 10 of 11 investment categories. Industry funds had a smaller percentage of Fat Cat Funds and more Fit Cat Funds.
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