Investing Money: May 2020

Tuesday, May 26, 2020

[Smart Investing] ETFs vs ETPs

Investments and personal finance insights from Vanguard Australia

27 May 2020

Hi everyone,

In this week's Smart Investing, we take a closer look at ETFs (exchange-traded funds) and ETPs (exchange-traded products) and why investors need to know the difference.

Vanguard Senior Financial Writer Tony Kaye also surveys the current superannuation landscape, including the current cost of early withdrawals as well as a way back after the dust settles.

Lastly, we have included an article discussing the state of the corporate bond market and how a confluence of factors since the global financial crisis has steadily nudged it down the investment-grade quality scale.

Thank you to those who took our short survey last week, your responses will help guide us in providing you with interesting and relevant content. For those who did not get a chance, we have included the survey link again. The survey takes only a few minutes and is a great opportunity to provide any feedback or suggestions that you might have for Smart Investing.

Regards,

Robin Bowerman
Head of Corporate Affairs
Vanguard Australia

ETFs vs ETPs

By: Robin Bowerman

Over time the description ETF (exchange-traded fund) has tended to become a blanket term used in place of ETP (exchange-traded product). While all ETFs are ETPs, it’s not the case the other way around.

A super catch-up plan

By: Tony Kaye

In the current environment, the need for having a long-term financial plan that incorporates having adequate retirement savings in place is arguably more than important than ever.

Fallen angels: The new high-yield bonds

A confluence of factors over the decade since the global financial crisis has steadily nudged the corporate bond market down the investment-grade quality scale. The COVID-19 pandemic threatens to knock some issuers off the scale completely.

VANGUARD IN THE NEWS

How Vanguard's $75b woman found winners in bond market chaos

Liz Capo McCormick | The Australian Financial Review | 20 May 2020

One of the worst-ever bouts of dislocation in the US bond market generated some winning trades for Vanguard's Gemma Wright-Casparius. As liquidity disappeared amid the pandemic-sparked mayhem in March, the veteran fixed-income portfolio manager saw opportunities, including in older, less-traded Treasuries.

To read more, please visit the AFR 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

Taking a total return approach in the time of COVID-19

By: Aidan Geysen

Unlike an income-oriented strategy which generally utilises returns as income and preserves capital, the total-return approach encourages the use of capital returns when necessary.

Over-concentration risk comes to the fore

By: Tony Kaye

Minimising concentration risk through a well-planned, well-diversified asset allocation strategy is one of the core principles of investing.

CLIENT SERVICES

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Tuesday, May 19, 2020

[Smart Investing] Index or active, what's right for you?

Investments and personal finance insights from Vanguard Australia

20 May 2020

Hi everyone,

In this week's Smart Investing, we discuss why instead of asking whether an index or active investment strategy is better, investors should be considering what the right combination is for their portfolio and risk appetite.

Vanguard Senior Financial Writer Tony Kaye also takes a look at the increase in global demand for Australian government bonds. Despite the much-publicised recent volatility on fixed interest markets, caused by panic selling, investors are continuing to back the broader stability and lower risk of investment grade bonds.

Lastly, we discuss why self-managed super funds also need to factor in the need for liquidity – particularly when they are approaching or indeed are already in the drawdown or pension phase.

Please take a moment to complete a short survey so we can understand what content interests you. The survey takes only a few minutes and is a great opportunity for you to provide any feedback or suggestions that you might have for Smart Investing. We look forward to hearing from you.

Regards,

Robin Bowerman
Head of Corporate Affairs
Vanguard Australia

Index or active, what’s right for you?

By: Robin Bowerman

Now that the initial COVID-19 shock has passed through markets, investors might be wondering if buying the index is still a sound strategy when certain sectors are being impacted more than others.

The great Australian bonds rush

By: Tony Kaye

The onset of COVID-19 has been the catalyst for many unprecedented crisis responses, including Australia's biggest ever government bonds issuance program.

SMSF liquidity lessons learnt from the pandemic

By: Robin Bowerman

Liquidity is one of those things that investors – both professional and individual – can take for granted particularly after an extended period of relatively strong growth in investment markets.

VANGUARD IN THE NEWS

Investment giants ask exchanges to enforce a labelling system for ETFs

Dawn Lim | The Australian | 14 May 2020

BlackRock, State Street Global Advisors and some other large money managers are asking exchanges to enforce a more narrow definition of exchange-traded funds. These firms want a new naming system reflected in exchange data feeds that go out to traders and investors.

To read more, please visit the The Australian 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.