Bryce’s portfolio moves, Investment Bonds & is Instacart opening the IPO window?

Bryce: [00:00:14] Welcome to another episode of Equity Mates. Or should I say welcome dear listeners, to another episode of Equity Mates. Here we observe the fascinating journey of investing in a habitat where beginners or those nearing Warren Buffett status coexist. Our mission is to guide you through this intricate ecosystem from the fledgling stages of your first investment to the mature dividends that await. If you are venturing into our auditory landscape for the first time, we extend a warm welcome. Now, my name is Bryce, and as always, I'm joined by my equity buddy Ren. How are you? 

Alec: [00:00:49] I'm good. 

Bryce: [00:00:51] Now off your feedback from last week. I've gone with someone very specific here. 

Alec: [00:00:57] Oh, I was wondering. 

Bryce: [00:00:59] So we're moving into the territory of people rather than themes. 

Alec: [00:01:04] Okay. And am I going to know this person? 

Bryce: [00:01:06] Yeah, 100%. And I think the themes will.

Alec: [00:01:09] Let me let me talk you through what I'm thinking. Okay. So I was it was like a it was I was thinking like an AM radio, like an NPR sort of. 

Bryce: [00:01:20] You're on the right track as a presenter in some way. I think some of the words in there, I'll do this one. We are here. We observe the fascinating journey. 

Alec: [00:01:31] Of David Attenborough. 

Bryce: [00:01:32] Yes. Well played. Well played. This is where I'm really going to have to start Embodying the person, because without being able to do the accent, the words are quite important.

Alec: [00:01:45] Yeah. Well I think. 

Bryce: [00:01:47] Nice work though.

Alec: [00:01:49] If people want to suggest themes for Bryce. Hit him off in the dm's on Insta but let's get on with the episode because we really got a lot to cover. [00:02:00][10.6]

Bryce: [00:02:00] So in today's episode we're going to cover off the IPO window. Is it opening? We've got a couple of big names that are on the IPO list and we're going to have a chat about investment bonds. We've had a question come through from the community, so we're going to do a bit of a deep dive on what they are and if they're right for you. But Ren, to start with, I've been making some changes to my portfolio. 

Alec: [00:02:24] There you go. 

Bryce: [00:02:25] That's it. 

Alec: [00:02:26] Great. Well, let's get into it. But I think, too, to sort of frame this episode and probably the conversation around your portfolio, but I think it's the numbers continue to surprise me because what is happening in the market and the sentiment out there are different. Would you believe me if I told you that the Australian All Ordinaries Index is 4% of its all time high? No. Well, you should believe me, because it's true.

Bryce: [00:02:53] The All Ordinaries. Yeah. What about the ASX 200? [00:02:55][2.3]

Alec: [00:02:56] Great question. [00:02:56][0.3]

Bryce: [00:02:57] It's probably. It's the same. Yeah. 4%. [00:03:00][2.7]

Alec: [00:03:01] Yeah. It is just it's a real reminder that the stock market and the economy are two different things and the challenges around inflation and cost of living that we're living through at the moment are really hurting at the moment. But the stock market is generally forward looking and investors are obviously looking past this current moment. And they say blue skies ahead with some important caveat. So the overall market is only down 4%. It hasn't been nearly as bad as people predicted, but there have been challenges. The small caps index, so smaller companies, the ASX Small Ordinaries is down about 22% from its all time highs and the Australian Tech Index is down about 20% from its all time highs. So there's certainly been pockets of pain, but I saw those numbers and they surprised me. So I thought it would. 

Bryce: [00:03:55] Down 20% so that the Australian Tech Index.

Alec: [00:04:00] ATech?

Bryce: [00:04:02] Atech, yeah, it's actually up 30% year to date though. 

Alec: [00:04:05] Which the. Well I mean you reconcile those two numbers, it's just a reminder of how hard 2022 was. But 2023 has been okay from a stock market perspective.

Bryce: [00:04:18] From a stock market perspective, I mean, it's just the story in the States is the big tech which we know.

Alec: [00:04:24] Like in videos and stuff. 

Bryce: [00:04:25] Yeah, yeah. Just carrying it through. 

Alec: [00:04:27] Yeah. So let's get to your portfolio because I am looking through our Google doc here and I can say a lot of notes must be nice. 

Bryce: [00:04:36] So I'm reviewing what I mean. I constantly have a look at my portfolio. I generally got, I've got the core set up and I'm just dollar cost averaging into the core, but I've got a lot of what's the word, not historical but legacy. Legacy investments. Yeah, I've got a little legacy investments and something that still kind of sticks with me around how I construct my portfolios. What Charlie Viola sort of said when we had him on is ask an advisor maybe four or five months ago around having as few lines as possible in some sort of big investments and just concentrating on that and just constantly building wealth in that to the point where they become quite meaningful, having $500 in something for that to become a meaningful and sort of life changing investment needs to like ten or 20 back. 

Alec: [00:05:23] A bit, even if at ten, but it would go to five grand. Yes. Yeah. And it's like if you absolutely have high conviction over something and you absolutely nail it, you don't want it to go from 500 to 5000. You want it to go from 5000 to 50000.

Bryce: [00:05:39] Exactly. So then you're first. Exactly. So then you're either like, well, do I have enough conviction to put 5000 into this thing or am I just putting 500 because I'm like half a half a leg like. 

Alec: [00:05:49] Someone spoke about it? You don't want to miss out or like my mates are in it. [00:05:53][4.0]

Bryce: [00:05:54] Exactly. And then and then on the other side of that is I've got a number of listed investment companies and sort of positions that I've I've got through work and whatnot that we'll go through in a moment that are meaningful. But it's like there's serious overlap with those and my core portfolio. So I'm in the process and have been over the last few months of selling down and just consolidating into some big core positions. So the first thing is the very first stock I've owned, everyone knows the story of. When I was in sort of year six was when BCCI, Brickworks Investment Ltd, they have a listed investment vehicle. I bought that and have continued to buy that over the years, but it has huge overlap with the ASX 200. I mean, the top 25 holdings are BHP, Macquarie, CommBank, NAB, New Hope, Woodside, Wesfarmers, Transurban, Woolworths.

Alec: [00:06:49] Yeah, it's a large part of Australia, but I don't know what you expect. 

Bryce: [00:06:54] Well, I mean back when I bought it, you didn't buy the index. These were the. 

Alec: [00:06:59] Yeah. Well I mean back when you bought it ETFs didn't exist. 

Bryce: [00:07:02] Yeah. Not to the extent. 

Alec: [00:07:04] So that shows you. Right. 

Bryce: [00:07:06] Big time. The reason I've held it is because of the capital gains on it. But for me, I'd rather put this into my a200 because the management fees on the LIC at the moment are 0.818%, so it's not massively expensive but the a200 is 0.04%, so four times cheaper.

Alec: [00:07:32] But you do have to pay tax.

Bryce: [00:07:33] I do have to pay tax, but I do have a number of investments I will sell and have sold that will. 

Alec: [00:07:39] Loses the will. 

Bryce: [00:07:40] Exactly. Yeah. So that's the first thing I'm doing. I've emotionally held on to this because it was the first thing that I've ever bought, but I'm going to get rid of it and put all of that into my a200. The second thing is when I worked at Woollies, we got a share employment scheme and so I've built up a pretty sizeable position in Woolworths. It spits out great dividends, but it's not a growth stock. And I just think, "What is the company that I want? What are the companies I want to own right now? If I'm going to own single, single line companies, I want to own companies that are going to grow. And Woollies has done well over the last 12 to 18 months given the environment we're in. But in terms of where it is going from 2006 to now, it's done well, but it's about 40 bucks at the moment. It's not going to be 200, 300, 400 bucks. I don't think it just sits there, plugs away, it's safe, it's a blue chip, it spits out dividends. So I think that money can go to better use. So I'm going to get rid of it. Wow. Similarly, I have Endeavour because when they did the stocks when they sold at Woolworths, so the business I got stocks in that I've no conviction in that stock. I'm not interested in it. I'm not going to follow it, I'm just going to get rid of it and put that money to better use GitLab. I got carried away with Yenli. 

Alec: [00:08:54] So remember the expert was. 

Bryce: [00:08:56] The guy who had such conviction inside. Yeah. And I bought this. It's been an absolute dog. Shocking. I'm down about 70%. 

Alec: [00:09:04] But I guess the question is how much of that is company specific and how much of that is you bought at the start of the attack? Exactly. And then 2022, everyone got smashed.

Bryce: [00:09:15] What I Yeah, true I guess combination of both. 

Alec: [00:09:18] I guess if you don't know the company didn't.

Speaker 1: [00:09:20] Yeah I didn't know about the research. 

Bryce: [00:09:21] I just got caught up in his side. I'm getting rid of that. That'll be a loss. I did a random purchase of VAP, which is the Australian Property Index. 

Alec: [00:09:29] On the Vanguard. 

Bryce: [00:09:30] Vanguard doing alright, but again, unnecessary. I'm probably going to reconsider alternative assets and whatnot outside of my core, but. 

Alec: [00:09:38] Well, I mean like property wouldn't have done well in this rising interest rate environment. 

Bryce: [00:09:42] Well with Yeah. And with what's going on in the commercial space. 

Speaker 1: [00:09:45] Yeah. Yeah. Yeah.

Bryce: [00:09:46] And then the hydrogen ETF. So I went in on the hydrogen when we were talking about it in the show maybe two years ago when it was first launched, you know, pretty you know but I think I'm just as it feels like it's just way too early. It performed really poorly. And again, it's kind of like I think the money can go to better use now. And when the hydrogen thing probably becomes more plausible, it's time to reconsider. But for now, it's like get that into semi semiconductors is the way to get. 

Alec: [00:10:17] So basically what I'm hearing is you like to chase the hot thing and now you want to pull the money out of that and chase the next guy. 

Speaker 1: [00:10:24] You know, to be fair, all of the lithium now. 

Bryce: [00:10:27] Or all of that, as you say, like Woolworths, I've already got a position in Woolworths through the A200 and through big. So there's multiple overlap going on there. I'm not going to be taking any of this and putting into new investments to the point I made at the top. I want to keep just building my investments in gear and just the leveraged U.S. and Australia and then their remaining core portfolio. So Europe, Asia and away we go. But that's what I'm doing, rent taking all of that and, and, and putting it into sort of my core. I do still have a bunch of cash, white powder sitting on the sides at the moment for me. 

Alec: [00:11:03] Got white powder sitting on the side. You mean dry powder range right. You're taking investment gains and using it on dry powder. 

Bryce: [00:11:14] Sitting on the side. Waiting for opportunities that pop up in the satellite as we go through conversations with experts and doing the research that we do on the individual side of things.

Alec: [00:11:25] Nice. Now, there is one point here that you haven't touched on, but you've written about the Bitcoin approach. Dot, dot, dot. So I've got to ask. 

Bryce: [00:11:33] Well, my approach at the moment is I'm DCI-ying back into it because of what happens with this halving event that is due in 2024. And will it play out? But I'm just interested to know what your Bitcoin approach is because we haven't spoken about crypto much and you know, we do have the crypto show, but for me it's just a very small portion of my portfolio that I'm just starting to spit some cash back into.

Alec: [00:12:03] Yes, and mine is I have an automated investment, so we get paid every fortnight and I have $50 that goes to crypto every fortnight. 25 into a theory and 25 into Bitcoin. And that's just like I wouldn't have checked it for maybe a year, but it's just 50 bucks. And for me, like, that's enough money that I like. It's, it's not going to be life changing money if it can't go to the moon. Yeah, but it's like at least, I mean the game dollar cost averaging. So I'm not thinking about it. But if it all goes to zero, like 50 bucks a fortnight is

Bryce: [00:12:38] Manageable.

Alec: [00:12:39] It's an ubereats order. Yeah. You know, it's what kale will cost in a year. Like it's, you know, it's not something that on. That I'll lose sleep over losing. Yeah. 

Bryce: [00:12:51] Well, they say that this is the time with the halving coming in 2024. So we'll see. It's performed pretty well this year anyway. I just thought I'd give you guys an update on where it's at. So those trades are in process, if not, will be made over the next week. Obviously, you do need to consider the tax considerations. I'll have a fair bit of capital gains on some of those. I've also made a fair bit of capital losses on this. So it kind of all nets out. And I should say I use share site and this is not sponsored, but it is super helpful for that stuff.

Alec: [00:13:25] Yeah, it's not sponsored, but I think we have a code. 

Bryce: [00:13:28] I think it's just share sitcom slash equity mates and I think you get four months free. It's actually free if you have less than ten holdings as well, which I don't. So I pay for it. To be honest, it is expensive and annoyingly expensive for how often you actually engage with the platform, but it's worth It. If that makes sense. 

Alec: [00:13:49] As we said, not sponsored or it's not. It's not annoyingly expensive but useful, Right? That's a product that is going to be sticky. I don't like paying for this, but I can't not pay for it. Exactly. I still use a spreadsheet, but you keep talking about share sites, so. 

Bryce: [00:14:07] All right, well, let's move on. We want to have a chat about the IPO window. Yeah, there's a few headlines coming out. And the question is, is the IPO window opening? 

Alec: [00:14:17] Yeah. Well, let's start with what is the IPO window? 

Bryce: [00:14:20] The IPO window is a period of time on the markets where everyone starts IPO owing. Listing conditions are right. People are feeling confident. Investors are willing to get behind companies and start deploying cash again. And you start to see more companies list because the confidence that their IPO will be successful is there. 

Alec: [00:14:41] So this is global 2021 there were 3260 IPOs. So think about what was happening in 2021. The market was ripping. People were buying monkey JPEGs for millions of dollars. Like if you're a company that needed to raise or wanted to raise money, and at least on the share market, it was a good time to go and sell yourself. 2022 The market changed and you wouldn't want to IPO because investors were worried they weren't going to be throwing money at you as easily. So 3260 IPOs in 2021, How many do you think were in 2022? 

Bryce: [00:15:29] 300. 

Alec: [00:15:30] Oh, no. 

Bryce: [00:15:31] In the thousands. 1500. 

Alec: [00:15:33] It halved. 1,671. So it halved because all of these companies that could have IPO said now's not the right time. And the only companies that did list were companies that had to list. Now I've got American starts. So similarly, 2021, there were 1035 IPOs in the United States. How many do you think were in 2022.

Bryce: [00:16:00] Go with the same thing? Half. 

Alec: [00:16:02] 181. Whoa. Yeah. So it went from a bit over a thousand to a bit under 200. And so the IPO window has been closed. The only things that have been listed, companies that need to list. But at some point the IPO window reopens and there's normally a few sort of landmark IPOs that signal to the market, we're ready. We're ready. So after the tech wreck of 2008 bubble bursting, there was a few really lean years. And everyone points to Google's IPO in 2004 as the window opening again. And then from that sort of that IPO in 2004 to 2007, 2008, tons of good. And then obviously the housing bubble in America, the global financial crisis, the IPO window certainly closed in 2008, 2009. And then people point to Facebook's IPO in 2012 as the signal that things were ripping and roaring again. And so. You know, both of those times it was a few years. And so we're not saying the IPO window is opening, but it has been interesting that a couple of notable companies sort of gearing up to IPO. 

Bryce: [00:17:18] Yeah, absolutely. So two that have caught our eye and as you said, a notable one and we're going to have a chart. So the first is Instacart Ren and the second is serve. We'll start with Instacart, a company that a lot of people have been waiting for, the IPO and that day is fast coming. 

Alec: [00:17:34] So what Instacart is, is a grocery delivery app. They are essentially your personal shopper and then they deliver that order. They are not the grocery store. They're not milk run. If you're listing here in Australia in the sense that Milkman owned their own grocery supply chain, they are literally just personal shoppers. They'll go to Walmart or Kroger or wherever and buy what you want and then deliver it. Now that business model screens unprofitable to me. 

Bryce: [00:18:11] Yes. 

Alec: [00:18:12] But the interesting thing is, unlike so many of its tech peers, Instacart is actually profitable. 

Bryce: [00:18:20] Big story. Only recently, though, right?

Alec: [00:18:23] I think so, yeah. Yeah. So it was founded in 2012. People may be familiar with the Start-Up Accelerator School, whatever you want to call it, Y Combinator. So Instacart is a Y Combinator company. 2012 it started and in 2021 it was valued at $39 billion. So a pretty impressive story. Yeah, Revenue of two and a half billion dollars, up 39% from the year before, $1.8 billion. And as you said, 2022, it was profitable for the first time, $71 million in profit, which is just like full credit for such a labour intensive, low margin business. Doing grocery deliveries profitable is incredible. Pitching yourself as a tech company doing it is also pretty incredible. 

Bryce: [00:19:16] So and that's Instacart. The second is serve, one that I actually hadn't heard of. It's pretty fascinating, though. It's an uber backed robotics delivery company and its IPO. 

Alec: [00:19:26] Yeah, so it's had a bit of a interesting corporate history. So it was Postmates was a big competitor to Obeids in the States. It was part of Postmates. Then Uber acquires Postmates and then spins out serve robotics as its own company. But it makes what can only be described as cute robot delivery, like look at these little eyes on this thing. 

Bryce: [00:19:54] The way not to wait on picture. It is like a very low profile, like plastic box on wheels. And if your Uber delivery gets put in this box and then this little robot essentially drives on the sidewalk to your house and you open the door and there's a little robot there with a hot pizza inside. 

Alec: [00:20:14] So if people remember Domino's delivery robot back in the day to remember this, I think it was called Drew. You're shaking your head. Yeah. When? When I think it was when we were even at uni, or maybe right after uni, dominos were experimenting with quite a similar robot. It's similar. Like. Low to the ground for wheels. Put the pizza in it and then it's got like, little eyes and it'll walk along. It'll drive along the sidewalk and deliver it to you. I don't know where that got to with Domino's. Ah, this is Domino's Australia we're talking about. But yes, Server robotics has built something similar and they plan to launch 2000 of them in the United States. I think starting in maybe a year or two. 

Bryce: [00:21:01] It's pretty fascinating if you want to have a good idea of of what it does just YouTube, but just YouTube, surf robotics and you'll see a whole heap of demo videos of it in action driving down the sidewalks of America. I mean, a lot of questions remain. You know, can people steal it? How do you get hit by a car? It's never going to make it to you like that. 

Speaker 1: [00:21:22] True. Right. A few things that could.

Bryce: [00:21:25] Go wrong here, but I think it's pretty fascinating. You can see how it would cut down considerably on staffing and labour costs for Uber or any delivery company, really, if they managed to nail it. And yeah, definitely have a look at the video. It's pretty fascinating. 

Alec: [00:21:40] So they describe this sidewalk bots as capable of level four autonomy, which means that the vehicle can handle all aspects of driving in certain conditions without human intervention. So it's a like it's a self-driving robot. Yeah. 

Bryce: [00:21:57] Well, I just watched the level four video and it's pretty it's, it's great. Stops at the stop, stops at the zebra crossing, knows when to go, cars coming, stop, swerves, trees, you name it. 

Alec: [00:22:09] Well, looks pretty good. Yeah. So that company is not going to be rising as much as Instacart and it will not be fetching the same valuation as Instacart. But it is an interesting one. It is IPO. Uber owns about 16% and NVIDIA owns about 11%. So it's got some deep pocketed and powerful backers. But again, like this is a company that wouldn't have been IPO in 2022. No, an unprofitable self-driving robotics company that's pioneering food delivery. Like how many red marks would that have against you in 2020? 

Bryce: [00:22:45] Yeah, I mean, it's probably got a few eyes in their investor report, which is probably allowing it to get off the ground. 

Alec: [00:22:52] So the fact that in this type of company. Yeah yeah yeah, yeah But I guess this is going to be something to watch because if the IPO window starts to open, investors start to get a little bit more excited about the prospects of these companies and they start to feel a little bit more confident about, I guess, the general economic environment. Very quickly, quite a pessimistic mood that we're sort of feeling in the market might turn. Which is exciting 

Bryce: [00:23:22] Yeah, I'd love to see it. 

Alec: [00:23:25] Now, the question is, Bryce, two companies IPO-ing. Let's say you could only invest in one. Would you rather. 

Bryce: [00:23:31] Well, you can actually see Instacart using serve. 

Alec: [00:23:35] Like that. Could you say serve using Instacart? 

Bryce: [00:23:40] Well, they would. Why would they need to use Instacart? 

Alec: [00:23:42] That's my, that's my point.

Bryce: [00:23:44] Well, I mean I can see serve having use across multiple businesses, solving a lot of problems for what is a very difficult problem to solve for retail.

Alec: [00:23:54] For like the last mile. 

Bryce: [00:23:56] Yeah. So if you can nail that and take out labour costs in not great Instacart, probably one of the only profitable, very competitive space I'm backing in the underdog. 

Alec: [00:24:06] So yeah. So for me, like the story of Instacart is incredible because it feels like such a bad business to pay in. Like you've got labour costs, you're already dealing with a low margin product, you're competing with people's ability. Well, people just getting off the couch and drive to the supermarket, which isn't too difficult and oftentimes might be quicker. So it's like it's a tough business to be in and a tough business to keep growing in. Whereas to have robot deliveries, I mean epic. But I guess I guess the question is there are a number of companies that have an iPad that they were sort of hanging out for, and if the IPO window opens, what are some of the companies that you'll be watching and potentially wanting to invest in? 

Bryce: [00:25:00] I'm in the drama space X, but yeah, that's not going to IPO. 

Alec: [00:25:05] No, not after Alan's been forced out of two of his companies. 

Bryce: [00:25:08] Well I mean Stripe and Reddit, the two that just constantly pop. Yeah, I remember we've been speaking about those two on USBs years ago. They're always there.

Alec: [00:25:20] I mean, the theory with Reddit is the fact that they, you know, how they change their API pricing and all of that stuff. The argument there is that that is something that you do just before your IPO and you want to get your financials looking good. So what Twitter did just before it IPO'd back in the day so could be coming soon. The window could be opening and the companies could be getting ready. A lot of clouds there. 

Bryce: [00:25:44] We'll have to wait and see. But we're going to take a quick break. And then on the other side, we'll be back with a question from Lauren around investment bonds. So we'll be right back. Oh. All right. So we're back. We've spoken about the IPO window and my portfolio, But we have a question from Lauren around essentially in understanding what investment bonds are and how they could play a role in her portfolio. So let's take a listen. 

Lauren: [00:26:16] Hi Bryce and Ren, hoping to understand investment bonds a bit more. I think my understanding is that they seem quite a good opportunity, especially for someone who's on kind of a higher income bracket. But I just there doesn't seem to be heaps of information out there. Like, I've been kind of floating around the Internet, looking at looking, searching for something just to kind of read up about them a bit and there just isn't much material. Hence I kind of was like, Oh, I know some people for the job for this. So like, I even ended up on a couple of fund pages and just couldn't quite follow the process, I suppose. So I think, I think my questions are not so much kind of what are they like? I've got a general gist both What is the average punter? All the listeners on the podcast will probably want a one on one on them. It's more around kind of who are the big players and how do they achieve, I suppose, a positive financial outcome once you've accounted for the benefit of not paying capital gains tax? Looking forward to hearing your nerdy deep dive. Keep up the good work. Thanks, Lauren from Melbourne. 

Bryce: [00:27:27] So thanks for the question, Lauren. If you want to ask a question, just hit us up. Get equity mates dot com and we'll do our best to answer it or be included as part of our Ask an Advisor series. So an investment bond, something that's not part of my portfolio rented. I'm assuming it's not part of yours, but essentially it's a managed investment. It's usually operated by insurance companies and it's where your money, like most investment pools, it's pulled together and then invested in underlying assets. So there are different investment options available that can invest in cash, fixed income shares, property. But it's pretty straightforward. There's not much more to it from a I guess, a structural point of view. The difference is in how they actually operate and work. And their biggest advantage is the tax side. They are sometimes known as tax paid investments, and that is because earnings on the underlying investment. So if it's in fixed income, if it's in shares, they are received by the company that operates the bond. And then those earnings are taxed at the corporate rate of 30% before being reinvested. So if you're in a higher tax marginal tax rate of a higher than 30%, you're actually getting a tax advantage by having your investment in these because the return on that investment is taxed at 30% rather than your marginal tax rate. All of the returns of the investment while invested and upon withdrawal after a ten year period, are then not included in your personal income tax as well. So they're designed for a long period of time, ten years. If you hold for more than ten years, those returns are tax free. So it's a great vehicle for the long term. A lot of people use them for their kids' education, putting away money over ten plus years to help pay for kids education. So, yeah, it's a really interesting vehicle, one that I don't have in my portfolio. But I can definitely say the advantage of, particularly if you are in a high tax bracket. 

Alec: [00:29:32] I think the key thing to keep in mind is there is a tax benefit. But what you really want as an investor is just the best after tax returns possible. So this is an article from stock spot that we'll include in the show notes because it's quite interesting. It's a good deep dive. It talks about the different investment bond providers that we'll get to in a second. But they've surveyed eight growth investment bonds and they said the average five year return is 2.9% per year. Yeah. And then they look at how that compares to a portfolio of ETFs after tax and even after you pay taxes start up. So I think the key thing to keep in mind is just. What are you investing in? What do you expect that return to be? And is that even factoring in the tax? Is that going to give you the best return? Yeah, but if you take a lot of those boxes, it's a great vehicle. For me, this is a vehicle where it's like I speak to a financial advisor to make sure it's setting up properly. Yeah, but I think if you are interested that you're mainly going to life insurance providers, I believe. Yeah. So here's a few names that you can Google Generation life amp. I f k invest Commonwealth Bank have one apparently Australian unity. So there's a few more. You can go to this stock spot article and flick through it all. Um, but yet to your point, it's not something that I've invested in so far. 

Bryce: [00:31:08] No, it's too far down. The risk for me at this stage to, to conservative, you know, the people who are maxing out super contributions, investing for the next generation, long term investors as you, you know, putting it away for particular reasons or looking for tax efficiencies. They're the type of people where this becomes interesting. But for me, again, as you said, they're not necessarily set up as huge capital growth. 

Bryce: [00:31:36] Capital growth products. So.

Alec: [00:31:38] So I think he's an interesting one as well. So the conclusion here, investment bonds may be appealing to Australians with a high marginal tax rate. So that's one the tax, the other one. Or parents or grandparents who want to invest for their children or grandchildren and who want to avoid the hassle of transferring the assets later. So I think that's one that you can look at. Scott Pape writes about investment bonds in his Barefoot four Kids book. Yeah, so give Scott a plug there. I haven't read the book, but I know that he does write about it. So if you are interested, if you do have kids or grandkids and you're looking or you earn a high marginal tax rate, there's certainly something that you can look into. But I think for us at our stage of life and our current income levels, it's not something that where it's in our portfolio mix. 

Bryce: [00:32:31] No, but thank you for the question. Lauren, will include links in the show notes to some of those articles that give a bit of a deep dive, and hopefully that can also contribute to what we've spoken about. But then that brings us to the end of today's episode. A lot of ground covered. If you do have a question, you can send it through to ask an equity mate sitcom. We'd love to hear from you, but otherwise we will pick it up next week. 

Alec: [00:32:55] Sounds good.