Deepdive into ETFs | YIGC with The Leungway

Maddy: [00:00:08] Hello and welcome to your in good company and investing podcast, striving to disrupt the gnomes in the finance industry. I'm Maddy and as always, I'm in some very good company with my co-host, Sophie. 

Sophie: [00:00:20] Hey, Mads, how are you doing today? I'm good. How are you? I'm good, thank you. I'm excited for today's episode because we're going to do a highly requested episode, which is a deep dive into ETFs. A lot of people have been buying ETFs as a reason because they're a great way to diversify your portfolio. So what are we going to be talking about? 

Maddy: [00:00:39] Yes. So on today's episode, we are going to get into how it's actually created everything you need to know about phase and how to compare them. And also some tips for finding the right ETFs for you. 

Sophie: [00:00:51] But before we get into today's episode, we'd like to acknowledge and pay respects to the wonder people of the Coolen nation who are the traditional owners of this land. We pay our deepest respects to the elders past and present and to the next generation who we hope to create a different future for 

Maddy: [00:01:05] before we jump into today's episode. There are a couple of items that Jess brings up. So we're just going to quickly define them now. So we are across the conversation with that. 

Sophie: [00:01:15] So the first one is CGT. 

Maddy: [00:01:19] Yes. So CGT stands for capital gains tax. So if we think about the income that we earn when we buy and then sell an investment, it's the tax that we pay on that income, which is the capital gain. The next one. So is market capitalisation or market cap weighted index. What are we referring to on this one?

Sophie: [00:01:41] So we've spoken about before market cap or market capitalisation is somewhat the size of the company on the stock market. So it's the amount of shares multiplied by the share price. And if you do some comparisons, you know, you might look at Apple and that's a large weighted cap stock and you might look at a baby little company in Australia who's in medicine, and that would be a small cap company. So that's the kind of two different ones. And when we talk about a market cap weighted index, it means that the ETF or the index that you have more more there is greater allocation to the larger cap stocks and a smaller allocation to the smaller cap stocks. And the final one, Mad's is index. What is an index? 

Maddy: [00:02:27] Yeah. So I guess we may refer to an index. We're kind of just talking about like a hypothetical portfolio of stocks. So one example is the 200 index where we're just talking about the largest 200 companies in Australia. So it's just referring to a particular market or I guess a segment of the market. 

Sophie: [00:02:44] Yeah. So indexes could be by region, by sector by anything, right? Exactly right. And now into the show today.

Maddy: [00:02:56] We are very excited to welcome to the show the wonderful person behind one of our favourite investing, Instagram's Little Leung Way, Jess Leung, when she's not busy simplifying finance on Instagram, just spends her days as an ETF portfolio manager at Baidu shares. Jess says that she wanted to become a portfolio manager because it gives her the opportunity to help people invest their money in a way that can create impact. We know how much the wider community loves an ETF and we can think of no better person to ask our questions to it than someone who actually creates some herself. So welcome, Jess. 

Jess Leung: [00:03:33] I've many, so I 

Maddy: [00:03:37] feel very good. Thank you so much for joining us.

Jess Leung: [00:03:40] Well, thank you for having me. As I was wondering, was either one of those highly requested most ETFs? I mean, both. We'll go back. 

Sophie: [00:03:49] But so just we always start in the same way. We've actually got some new questions in season two that we ask our guests so that people can get to know you a little bit more. And the first one is, what's the best thing that's happened to you this week? 

Jess Leung: [00:04:03] It's only Tuesday. Correct me. I mean, 

Sophie: [00:04:07] I'm a waitress. Yes, I 

Jess Leung: [00:04:09] know. I would say this. This is the best thing that's happened to us. That's nice. 

Maddy: [00:04:14] Nice. 

Sophie: [00:04:14] Every guest is going to have to say that.

Jess Leung: [00:04:16] Yeah, it's my first podcast, so let's see how you go. I love it. 

Maddy: [00:04:22] And just if you could have dinner with anyone, who would it be and why? 

Jess Leung: [00:04:28] My answer is going to be really simple, it's just my parents I miss my mom's cooking most. Oh, that's so nice. Why what would your advice be? 

Maddy: [00:04:39] I would be like someone famous or I got it that maybe I should think more to home next time. 

Sophie: [00:04:47] And if you could be a stock or company, who would you be and why? 

Jess Leung: [00:04:53] Oh, I know Christina from the super in your latest episode, said Eppy. So, yeah, I'm just going to you know that not only because I as though it's like my child, but it also aligns with my personal values and what I want to see my investment. So it's one of my favourites.

Maddy: [00:05:09] Coalson So I think that leads us nicely. In that case. You mentioned that one of your assets that you manage is can you give us a bit of a rundown of a typical day as a portfolio manager? What do you do from your general? Nine to five or maybe a little bit longer? 

Jess Leung: [00:05:26] Yeah, so we tend to slide a bit before a the first thing we have to do is get the files ready to go to the ASX and the market makers because we're a passive ETF. We do disclose our holdings every day on a daily basis. So we just need to make sure the holdings and everything is correct that's going into the public so that we can start trading. All you guys can start trading life open at 10:00, so that usually takes a while. So it's kind of like the quality check of our funds going through to see the positions or the cash is any trading that we need to do during the day. So it's mainly just kind of a prep work for the day that we do. So then it has to be done before nine and 10 is. That's when I kind of catch up on my overnight news, do my daily downloads on Instagram that you guys would see again. And I really just going through overnight emails and is planning my day. And then from 10 onwards, that's when the market opens. Yes. And then that's when we watch the market open and the spreads on our ETF to make sure that nothing too crazy is going on. And as we always say, if you're trading an ETF, avoid Mark open and a bit before market closed, because that's when it's the most volatile here.

Maddy: [00:06:34] First they go 

Jess Leung: [00:06:37] to make sure the spreads and everything at a reasonable rate so that you guys get the best value for your ETF. The things I would do throughout the day after watching the market open is work on product development, bringing new ideas and ETFs to the market for you guys. And then in the afternoon, that's when I'll get my hands down and dirty and I'll trade for the portfolios if there's any corporations in next year balancing. And yeah, that's practically my day. 

Sophie: [00:07:03] I have two questions. The first one, when you talk about spreads, what do you mean by spreads within ETF? 

Jess Leung: [00:07:09] Yes, it's the spread. So I bring that up for you. See, when you buy one, go buy an ETF and you go on the screen. There's also a buy and sell and there's kind of two columns and then you see different prices. So it's just a spread between the two prices. 

Sophie: [00:07:26] OK, so you're trying to make those prices like reasonable to buy are OK, 

Jess Leung: [00:07:31] because then the ETF, there's something called the net asset value of the NAV, which is actually the real price or the closest price that you can get to the underlying assets at that point in time. So that's kind of ideally you want it to be in the middle and then the buy and the sell is as little difference as possible. 

Sophie: [00:07:48] Interesting. I didn't know that. And then my second question is, do you know why the markets open at ten and close at four? Because it just seems like the best timing like ever. 

Jess Leung: [00:07:58] I think it's whoever set it up just wanted a good day for themselves. So some international markets actually have a lunch hour. So they closed during lunch. 

Sophie: [00:08:07] No really good 

Jess Leung: [00:08:10] stuff. Yeah. 

Maddy: [00:08:11] So just what are some of the ETFs you manage? I know you mentioned ethe, which is pretty cool. I think a lot of people in our community will know that one. But what are some of the 

Jess Leung: [00:08:20] other ones the other ones include? That's a pretty popular one as well and that's in efficacy. And on the ones include robots are about sobby, he said, robotics and A.I. and there's some domestic one such as QAD. So our resources QFN financials and most of our diversified ETFs as well.

Sophie: [00:08:43] So do you get to choose what kind of ETFs you want to manage? Like are you involved in the process of building them up or are you kind of assigned ETFs that you need to look after? 

Jess Leung: [00:08:53] The kind of in the beginning, because I kind of came in when I interview going, I'm I really like she you. Me. Oh, yes, she is. That's kind of what they gave me for AmBev. And now I've been in the company for over a year and I'm starting to get involved in the ETF product development process as well.

Maddy: [00:09:09] So that's really cool. So if you were starting an ETF from scratch, what does that process actually look like?

Jess Leung: [00:09:17] So the first up would be idea generation and coming up with kind of what I ETF you want to launch. So some questions are where I take inspiration from is. But what products are we currently missing in our product suite? What do people want to invest in and what are some of the upcoming trends and thematics that we want to capture and bring to market? What are you guys so lucky in that regard that we kind of have a crystal ball, so the U.S. market, so we can kind of see into the future, into the growth of ETF and see what's done well and what hasn't done so well. 

Sophie: [00:09:49] Yeah. Wow. So are there any trends that you're looking at at the moment? 

Jess Leung: [00:09:53] There are a lot, but I can't disclose

Sophie: [00:09:59] the deepest, darkest secrets, 

Jess Leung: [00:10:02] so I can only have 65 funds and we're always looking to expand. So there's always something going on in the pipeline. And yes, really exciting stuff. So keep an eye out and then the next step is production. So the analogy that I like to use for it is they're kind of like, yeah, Åhléns potting mix. So your Lolly's of ETFs and stocks. So then you have an idea. You need to go and find a manufacturer to actually help you put it into production. So for the case of ETFs, that would be an index provider. So we have to go and find the index that's helped bring our mission to life. And sometimes that might include some research houses or bodies as well. And then I think you find that as kind of the fun part. And then they kind of send you the samples and you kind of have to tweak your formula until you get it right. So this is often the longest part of the process. So, for example, imagine you're designing something and they send you a sample pack and then you might not like the colour, the taste or just just the combination of the flavours. So in terms of your portfolio, that would mean, for example, I don't like the names that I'm seeing in the portfolio or I don't like the country or sector exposures that it's given me or just that I don't like the fact that one stock is half of my portfolio so far.

Maddy: [00:11:14] And I often refer to ETFs as a box of chocolates. So I like this new addition to the story with the Allans lollies. I think I've got a strong theme going here and

Jess Leung: [00:11:25] everyone's like this sugar. So yeah. Yeah. So then off the way we have a final kind of portfolio that we're happy with, then kind of comes the admin, the regulatory and setting up the operational side and then it's practically ready to bring to market. 

Sophie: [00:11:41] Wow, that sounds so cool. I just thought you were kings of actually building up an ETF. That's a job. Like, it's just so fascinating. 

Jess Leung: [00:11:50] Do you have any ideas or ETF that you guys want to invest in? 

Maddy: [00:11:54] Oh, so and I actually did an ETF pitch night where we pitched our own ETFs to each other and mine. Actually, I liked my mine had to still stock and it was companies that liked massive celeb's had invested in. So it was like, oh really. What else was there Elvie like this last yet has all that kind of stuff. I was like, this is such a cool idea. What was yours again?

Sophie: [00:12:20] So mine was about dogs like all of like dog for because I love dogs but pets. We also do add to our watch list every week. And last week I added a block chain ATFP. That's a trend I'm watching.

Jess Leung: [00:12:33] Yes, definitely a trend to keep an eye on. 

Sophie: [00:12:36] So just today, one of the topics are going to do a little bit of Deep Dive into ETFs and we get a lot of questions from people about ETF fees, especially when people doing comparisons to find things that they want to buy. I think it's one of those big points that people look at. So we want to ask you a couple of questions about ETFs is considering you're an expert in the field. So when you are paying for a fee, what what are you actually paying for? What does it consist of? 

Jess Leung: [00:13:03] So, like, we're just going through the process of creating an ETF that's actually a lot of work that goes into creating and also maintaining an ETF. And we have your index licencing fee. So we actually have to pay the index provider to allow us to use the index. And then also then you have to take into account the fees paid into all our service providers. So, for example, the custodians, the ones are safe keeping actual assets in the ETF and then also administration. So every time someone buys even one single unit of an ETF, that's a lot of paperwork and recordkeeping. So all that just equals costs. And then we also have the ETF provider. So even on our team, we have a lot of people involved on our side too. So we have sales and marketing, legal and finance and and operations. Just keep the house running. And then lastly, then you have me. So I come up the management team and actually managing or taking care of the assets itself.

Sophie: [00:14:07] So I'm actually curious. You just mentioned the word custodian and it just sparked my mind. When you are buying an ETF, are you buying it under the custodian model or is it test sponsored? 

Jess Leung: [00:14:18] Yes, I find ETF. It works like a fund because it it is a fund. It's an exchange traded fund. So you don't actually own the underlying assets. What you. Owen is your own units in the ETF, which is issued by US ETF provider, and the units have a beneficial interest in the underlying holdings. 

Maddy: [00:14:38] So you mentioned sort of what goes into an ETF, but how are they actually calculated and what's like the typical range that we should expect to pay? 

Jess Leung: [00:14:46] Yes, I usually ETF management fees they quoted on a per annum basis, but even though they are quoted on a unit basis, it doesn't mean that you just go and send a check to your ETF manager once that actually accrued daily. So what that means is that the net asset value of the NAV takes into account probably every single day. So that's a very simplified example. If the management fee of an ETF was three hundred sixty five basis points, it means that each day, one basis point on zero point zero one percent will be deducted from the gross assets to derive your net asset value.

Sophie: [00:15:21] So you don't you don't actually have to, you know, pay anyone. It just comes out of what you're making. 

Jess Leung: [00:15:26] So you can see if you compare the Niflheim compared to your index return, the net should be a slight difference and that most of it is attributed to the management fees of the ETF.

Sophie: [00:15:39] Interesting. And what was the typical range for an ETF?

Jess Leung: [00:15:43] Usually, and then in terms of a range, I wouldn't actually put a number to it because it really depends on the style of ETF and how much work needs to go into both creating and managing it. So usually you'll find that you're broad, passive ETFs on the lower end of the fee range, while, for example, your somatics or your ESG ones would would warrant higher fees. So thematics because they tend to cost more as there's more work involved in developing the index and maintaining. And for example, if she finds you need to hire researchers individually, go and look at the stocks as well as screen out names or screen names, positive screening to derive your final portfolio. 

Sophie: [00:16:27] Yeah, I think Mads and I have spoken about that before with their ethical any of the ethical funds. Usually there has been a IFJ attributed to it. Even Christina Hobbs on one of the episodes mentioned it because they do have all that screening process. There's a lot of work behind the scenes to really make sure that the stocks that are involved are saying what they say they're doing 

Jess Leung: [00:16:47] and try to label. Yeah, yeah. 

Maddy: [00:16:50] And does active versus passive ETF play and phase as well, because presumably I know you pay more generally when they're actively managed. 

Jess Leung: [00:16:59] Yeah. So then you can probably think about it as a fees paid is in proportion to the amount of work that's put behind developing and managing the portfolio. So your passive broad market cap index is probably on the cheaper end because it's just replicating it in their active managers. Actually, you have to try to beat the benchmark or they have to decide on what positions and how to weight their portfolios and what they want to do and what they like.

Maddy: [00:17:31] So I guess that's something to keep in mind then, when you are comparing phase, because it's not like you don't necessarily just want the lowest fare that you can possibly find because you might be paying for different things to different ETFs. 

Jess Leung: [00:17:44] Yeah, for sure. As I would say, when you're trying to compare fees and make sure you're comparing the same style or similar funds, make sure you're comparing apples for apples. And then in that category, what you want to do is find the one with the cheapest fee for the exposure that you want.

Sophie: [00:17:59] Interesting. So that that's probably the first to compare apples to apples. Do you have any other tips for people that want to that are comparing fees, any tips and tricks to do so or

Maddy: [00:18:09] even like an easy place to find the fees? Because sometimes that can be confusing as well [00:18:12][3.9]

Jess Leung: [00:18:13] as the fees should be listed on the website and should be very prominent, kind of on the landing page right there.

Sophie: [00:18:20] We are just going to take a quick break for our sponsors and we will be right back to Deep Dive, even further into ETFs.

Maddy: [00:18:30] So just there are lots of different terms that we can hear about when it comes to ETFs and one that is quite common and I think is quite important is this term or idea of rebalancing. So can you give us a little bit of insight into what does rebalancing your ETF actually refer to and I guess why the portfolio managers need to do it? 

Jess Leung: [00:18:52] Yeah. So in terms of passive ETFs, when we talk about rebalancing, we're usually referring to index rebalances. So it's the index that your ETF actually tracks and that's when that one rebalance. So it's actually a very timely question because the S&P indices just rebalance. I think they rebalance every third Friday of September. So we just passed that. Okay, yeah. 

Maddy: [00:19:16] So that's also your ASX 200 and things like. Yeah. 

Jess Leung: [00:19:20] Oh, those ones. Yeah. So what that means is there are usually rules in place and that's known as index methodology that determines what names go in the index, what names come out and what names stay in.

Sophie: [00:19:32] And when you say names, you mean companies, is that right?

Jess Leung: [00:19:35] Stocks, yeah. So then when we rebalance by simply following the rules, so the portfolio manager, when we rebalance, according to the index rebalance, we would buy or add names into a portfolio which are index adds, and then we would sell all of the names which are index Leith's and would also change weights of the constituents. So why do we need to rebalance? We need to rebalance because over the course of time, the weights of the names of the stocks, they drift due to market movements. And then there's also corporate actions such as mergers, where two names become one name or then as the mergers where one name becomes to name. So by the end of the period, you might not have going back to your ASX 200, you might not have two hundred names in your portfolio anymore. So it's just a periodical clean or what I like to say, it's kind of like your when you clean out your closet every now and then, you know, you kind of the nice stuff you don't need anymore and then you kind of tidy everything up and put everything back in its place and make sure everything's fall in line. So when we were balanced, we're just trying to make sure that your portfolio best mirrors or attracts the underlying index. 

Maddy: [00:20:45] So I guess one example, and I'm keen to hear if this is right, because this is how I think about it. So if you let's take like Afterpay for an example, you know, that's grown a lot. So maybe that would change because it might go up the list and it might have a bigger weighting because it's become a bigger company. And then when Square actually bought Afterpay, I guess that kind of like removes that from the ASX. Is that a good example of how you would need to rebalance? 

Jess Leung: [00:21:13] Yeah, that is a good example. But we're still not sure exactly yet because the ASX has rules by your it's to be listed or to be included in the index. And Square did say that they would list as a CDI on the ASX, but then w we're still confirming on the details of when that acquisition actually finalises sometime next year 

Maddy: [00:21:40] and what to say to me, I 

Jess Leung: [00:21:42] guess A is a chess depository interes. So it's it allows foreign companies to list on the ASX where it gives the owners the same beneficial interest in the foreign companies. 

Maddy: [00:21:56] OK, so default to that example is that square is actually probably going to list on the ASX as well. So it kind of is just like replacing Afterpay 

Jess Leung: [00:22:06] and then the Pengana on the market cap of square. You might have a larger way or it depends, but we'll only know next year when the ASX announces how much 

Maddy: [00:22:15] got it out to be 

Jess Leung: [00:22:17] to 

Sophie: [00:22:18] watch this space. So for someone who is holding an ETF, if I say I'm holding a passive ETF, let's just say that a two hundred. That's a good example. What's my what's the effect for me when an ETF is rebalanced? 

Jess Leung: [00:22:32] So that's a good thing for you for holding ETF. You don't need to do anything at all. So the portfolio manager will do the rebalancing for you. So for example, going back to the third Friday when it was rebalance, we do all the rebalancing for you on the third Friday. And then as of Monday, your ETF will reflect all the new holdings and so will the

Sophie: [00:22:52] price as well. And do I have to pay extra? Do I get charged? Do I make any capital gains? Like are there any other impacts on the person holding it? 

Jess Leung: [00:23:02] There's no direct impact. So as and you don't need to put out of pocket anything at that point in time. But there might be some tax or CGT impacts off the back of some selling that was done due to the right balance. 

Sophie: [00:23:16] Right. So I might say at the end of the year on my tax return, that there might have just been a little bit of capital gains from selling off some of their holdings. Understood.

Maddy: [00:23:24] What's the difference between rebalancing for active vs. passive? So I. You gave the example of passive, as you know, for example, the third Friday of each month is active, much more regular, I'd 

Sophie: [00:23:38] imagine, 

Jess Leung: [00:23:39] passive. It's rebalance based on the prescribed dates as per the index methodology. So going back to the ASX or the ASX 200, that one is done on a quarterly basis is usually the third Friday of each of the like your much June, July, September. And so typically passive funds that rebalance anywhere between one to four times a year. And you can find all that information and the index methodology, whereas for an active fund they rebalance at the portfolio managers discretion. So it's based on their views of the market or the stocks and how they want to implement that portfolio. 

Sophie: [00:24:17] And is there such a thing as too much rebalancing in terms of an active ETF?

Jess Leung: [00:24:22] I think that's more just how would you say that's the more a downstream impact? So I think that's probably less of an active portfolio managers concern as they just want to get the positions right in the portfolio to the return. And then the rebalancing is just a side effect of of them expressing their views in the portfolio. 

Maddy: [00:24:43] We're going to move on now to this idea of portfolio turnover. So on your Instagram, you said that the silent killer of ETFs is portfolio turnover. So it sounds like something that we should probably learn about. Can you explain to us what this actually is? And I guess, is it different from the rebalancing that we just talked about? 

Jess Leung: [00:25:04] Sure. That's a really good question. So Tungamah, it's the capital is a percentage change in the underlying assets in the fund, usually over the span of when the period or in simpler words, it means it's just a measure of how much trading occurred in the underlying assets within your fund. So the reason why I say it's a killer, because like we've touched on earlier, is that when you do so, there's a crystallisation and that triggers a CGT event. So the more kind of rebalancing you do, then the more CGT you have to pay. So at the end of the day, what I guess what I like to say is as an investor, you want the most post-tax returns by paying the least fees as possible. 

Sophie: [00:25:51] Right. So you could be taxed because there's a bit of like there's a lot of selling that's happening. Right. Understood. 

Jess Leung: [00:25:57] And then you just get this huge tax. You at the end of the deal. I mean, I made so much money, but I have to give back half of it or something like that. So. 

Sophie: [00:26:04] Yeah, I know. So do you need a I guess you've got to be aware of the things as well. Like if there's a lot of portfolio turnover in the first 12 months, it'll be the same tax implications where you're taxed on the full amount of the capital gains rather than the 50 percent of capital gains. 

Jess Leung: [00:26:18] In that case, it's not exactly as when you purchased the ETF, it's when the ETF purchases underlying assets. 

Maddy: [00:26:25] That's good to know. So we're not talking about maybe buying and selling in my portfolio. We're talking about what the ETF manager is actually doing with the underlying holdings, is that right? 

Sophie: [00:26:36] So how can consumers like Maddy and I be aware if portfolio turnover is occurring frequently? I know I asked, you know, is there such thing as too much rebalancing? Is that such thing as too much portfolio turnover?

Jess Leung: [00:26:49] Yeah. So then it's going back to your point as to whether rebalancing is different to turnover. So rebalance contributes to turnover, as you've touched on before. So some tips on how you can be aware of how much turnover there is in a portfolio is firstly through fund disclosures and how often the holdings change. But this is something that you have to monitor. So, for example, if you notice that the fund composition is changing significantly and quite frequently, and that's usually a pretty big clue that there is a lot of turnover in the fund. And that's the case for both passive and active ETFs. Another way to see is that it's revealed in your tax return. So there is a capital gains component then, you know, that has been a large crystallisation and that only happens through trading. So that's a pretty big give up as well. So it is hard to get an accurate gauge on how much turnover there will be before you invest. But there are clues that give you an idea as to whether a final strategy may have high turnover. But generally, as a rule of thumb, your broad passive weighted indices such as ASX 600 or S&P 500, that would have a very low turnover. 

Maddy: [00:28:05] So I guess just to summarise, it's good to keep an eye out for this idea of portfolio turnover, because what can happen at the end of the year is that if there's been lots of turnover in the underlying holdings by the ETF manager, then that will, I guess, result in a bit more tax you need to pay, whereas if there is less, then it's less tax. And the whole point is that we want to try and maximise.

Jess Leung: [00:28:29] After tax return, yes, that's correct.

Sophie: [00:28:32] So we're going to move into our watch list that's going straight in my basket. Each episode we have been asking guests to add a stock company, news trend industry, anything that tickles your fancy to our watch list. And the purpose of this is to get us thinking outside of the box and broaden our horizons in the investing space. But we are not financial advisors, and this is purely for educational purposes only and does not constitute financial advice or investment advice. What are you adding to the watch list today? 

Jess Leung: [00:29:06] Yes, so I want to add diversified ETFs, I feel like are one of the most underappreciated or not known instruments out there. And the one that to the list is the chef is the ticker. So to be the best diversified or growth ETF and the reason why or just in general diversified ETF, the reason why I like them is that they're essentially the ETF of ETFs. I some of I guess the most common struggle is the idea is where to start, what to what ETFs you actually buy. And then the whole concept of asset allocation is so diversified. ETFs are kind of like you're all in one solution so that give you exposure to a range of asset classes and asset allocation for you and also rebalance to the predetermined asset allocation periodically for you as well. So you don't you don't need to do anything practically. So DHHS, what that one gives you is that one is 100 percent equities and then it gives you exposure to over eight thousand stocks. Yeah. In both Australian and international developed and emerging markets.

Maddy: [00:30:20] Oh wow. That is really it's really got the whole package. 

Jess Leung: [00:30:24] So one is great for those who are just starting out and have a long time horizon. But because this is a pure growth, it's 100 per cent equities. It also means it's high risk. So you definitely have to take that into consideration against your own risk appetite when thinking about whether it's suitable for you. And it's definitely a long term investment. 

Sophie: [00:30:44] That's our strategy of buy and hold forever.

Maddy: [00:30:50] So, Jess, I'm keen to hear and this is our final question of the episode, what would your main tips for someone who does have a bit of analysis paralysis when it comes to ETFs? Because we do know that there are so many out there. And I know that personally when I'm researching, I find one that I love and I get really excited and I might buy. And then like a month later, I find another and I'm like, damn it, I wish I bought this one instead. So what would you suggest, I guess, for trying to choose the right ETF for you?

Jess Leung: [00:31:22] So my my biggest fear is to just get started and and always remember that it's OK to change your mind. You know, just because you buy it doesn't mean you're stuck with it all. And so it's always you can always change your mind about other ETFs or other stocks to dilute that percentage in your portfolio. So a good starting point is your broad market cap weighted indices. But then another starting point, which I also like to tell people, is to just pick something that you like, you know, like it aligns with your values. You like its holdings. What the reason why is that it keeps you interested and it makes you kind of want to do more research your company, then learn more about the process and develop your own skillset and then you'll get more accommodating as you're seeing this more later down the track. 

Sophie: [00:32:08] I think it's good advice before you say, you know, just dip your toe in and then you'll start learning along the way. And at the end of the day, if you make a mistake or if you're not happy anymore, you can always just sell out of it.

Jess Leung: [00:32:18] Yeah, very bluntly, you hands down and dirty.

Sophie: [00:32:22] Yeah, exactly. Well, just we have absolutely love chatting with you today and getting a bit of insight of what a portfolio manager does and how you can actually build up ETFs. And hopefully everyone else has found it really insightful as well. Is there anything you wanted to plug before we finished up today? 

Jess Leung: [00:32:39] I'm going to plug all my social media. 

Sophie: [00:32:41] Yeah, please do 

Maddy: [00:32:43] it right 

Jess Leung: [00:32:45] so you can find me on Sociales at the Longway. I'm on Instagram and Tik-tok. So it's TheLeungWay. 

Maddy: [00:32:55] It's a great resource. I would highly recommend. I love watching all of your videos.

Sophie: [00:32:59] Yes, I do. Well, I'm sure a lot of people will be checking you out on Instagram. Thanks so much, Jess. Really appreciate your time today. 

Jess Leung: [00:33:06] Thank you for having me so much fun. 

Maddy: [00:33:08] Thanks, Jess. And that was such an awesome chat with Jess. I loved getting some insight into, like The Day in the Life of a portfolio manager and I guess like how ETFs are actually created. 

Sophie: [00:33:20] Yeah, I know it's funny because of those pitch notes that we did and we actually were like trying to create one. But someone's job, it's OK. 

Maddy: [00:33:27] It's actually a hope. 

Sophie: [00:33:30] As always, thank you for listening, jump into our Facebook community, Wijk investing podcast discussion,

Maddy: [00:33:38] girl, love to hear your questions on the episode or if you've got any thoughts, pop them in the group or send us a day on Instagram at YIGC podcast.

Sophie: [00:33:47] Yeah, I like them. All right. And if you want to leave us a review on your favourite podcast platform, we really appreciate it. And we read through them and smile. So if you want to make a smile, do it.

Maddy: [00:34:00] Thank you so much. And you'll hear from us next week.

Sophie: [00:34:03] Bye.