[Smart Investing] A different form of distancing

Investments and personal finance insights from Vanguard Australia

25 March 2020 Hi everyone, I hope you're staying safe and keeping well during this unprecedented period. This week we discuss why you should never catch a falling knife, and suggest that perhaps extending your social distancing practices to include your portfolio balance could help temper some of the emotional impacts of watching the market's volatile swings. Vanguard's Senior Financial Writer Tony Kaye also examines what we're seeing in the Australian ETF market and busts the myths around ETF liquidity issues. Finally, we've included a video of Tim Buckley and Greg Davis, our global CEO and CIO respectively, discussing the protocols that we have in place across the globe to ensure that we can continue to manage your investments during these difficult times. If you have been trying to reach us over the phones, we thank you for remaining patient with us. As you can imagine, coronavirus issues have kept the phone lines very busy. We are committed to serving you as promptly as possible so please try our call-back option (where available) or online services. More details here. Until next week. Regards, Robin Bowerman Head of Corporate Affairs Vanguard Australia

A different form of distancing By Robin Bowerman Market timing – particularly at times of severe stress and uncertainty – is akin to trying to catch falling knives as markets whipsaw around. So perhaps there is another form of social distancing we can practice – keep a healthy distance from that account balance until markets have returned to something resembling normal service. Read more

The pulling power of ETFs By Tony Kaye The sharp plunges on global equity markets over recent weeks, driven by the coronavirus pandemic, have triggered widespread investor concerns. Yet, in the midst of the strong volatility on markets, it seems many retail investors are taking a longer-term perspective and viewing the current events as an opportunity. Read more

How Vanguard prepares for the unexpected Vanguard's CEO and CIO discuss the protocols in place to ensure business continuity and strong service for clients. Watch video

Vanguard in the news Australian bond ETFs blow out on discounts ETF Stream | David Tuckwell | 17 March 2020 As coronavirus panic has sent markets into turbulence, popular bond ETFs have started trading at prices below their fair value, known as discounts. According to a Vanguard spokesperson, these discounts tend to be short-lived and investors with a longer time horizon will be unaffected. "ETF pricing during periods of extreme market volatility may involve…pricing dislocation as the valuations on [bonds] are changing rapidly…This is a short term influence…[and] there is no indication that this is a significant issue for investors with a sound investment strategy in place across a suitable time frame," they said. To read more, please visit the ETF Stream website. Please note the link above will show a copy of the article (where freely available), or the publisher's website if a subscription is required.

In case you missed it The value of a financial adviser By Daniel Reyes It is particularly during these periods of market volatility and ongoing uncertainty where investors see the value of an adviser's alpha. Read more Choosing your investment strategy By Aidan Geysen Investors are faced with a significant and growing challenge. Let's focus on the two key actions that can easily be implemented within your portfolio. Read more

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