0:04 welcome to another episode of equity
0:06 Mater podcast where we explore what's
0:08 possible in the world of investing if
0:10 you've just joined us for the very first
0:12 time a huge Welcome to our community my
0:14 name is Bryce and as always I'm joined
0:16 by My Equity buddy Ren how you going I'm
0:18 very good Bryce very excited for this
0:21 episode you know I am always excited but
0:24 one thing that we love to see uh is
0:27 accessibility improving for everyday
0:29 investors absolutely and uh one part of
0:32 the Market that has been less accessible
0:34 is uh fixed income yeah just because if
0:37 you want to buy bonds directly what
0:39 parcel size is normally start at like
0:42 $50,000 and if you want to access a bond
0:44 fund not many of them are listed so
0:47 you're dealing with quite High minimums
0:49 unless you have an advisor and can go
0:51 through a platform which leaves people
0:54 like us out in the cold y until now
0:56 that's right today we are joined by Sam
0:58 Watkins managing director and head of
1:00 Pimco Australia and New New Zealand now
1:03 Pimco are one of the world's largest
1:05 asset managers and we are fortunate
1:06 because they have just launched four
1:09 ETFs that now do give us exposure to
1:11 this asset class yeah that's right so in
1:13 today's episode we're going to chat to
1:16 Sam about Pimco get him to make the case
1:18 for fixed income because I think for a
1:19 lot of investors they're probably
1:22 underweight fixed income uh so we'll
1:24 make him pitch we'll then talk about the
1:27 Eternal debate active versus passive
1:29 investing uh yes it exists in the fixed
1:31 in come world as well so we're going to
1:33 chat about how we should think about
1:35 that decision and then we're going to
1:37 talk about these new range of active
1:39 atfs that have come to Market uh that
1:41 have made this asset class more
1:43 accessible for Australian investors yes
1:44 they've got some pretty bullish
1:46 assumptions on where rates go over the
1:48 next 12 months as well now before we get
1:50 into it we want to say a massive thank
1:52 you to Pimco for sponsoring this episode
1:54 and helping us keep all of our content
1:57 here at Equity mates free and accessible
1:58 so with that said let's get to our
2:01 conversation with Sam Sam welcome to
2:03 equity mates thank you great to be here
2:05 so we want to start with an introduction
2:07 to Pimco because wels you'd be pretty
2:09 familiar amongst the sort of
2:12 professional uh Finance industry for
2:14 many of the equity mates audience they
2:16 may not have have heard of you as much
2:18 so can can you give us an intro who is
2:20 Pimco yeah and look I think that's
2:22 that's that's very true by the way uh
2:24 you know Pimco when we do the barbecue
2:26 test as we call it where you sort of
2:28 mention where you work often it's not a
2:31 name that's known that well uh to to
2:35 most people um Pimco is a uh a fixed
2:36 income manager we're actually the
2:38 largest active fixed income manager in
2:40 the world our assets under management
2:43 are approximately $3 trillion I'm sure
2:45 when you say that at the
2:47 barbecue get interested
2:49 yeah sometimes it ends the conversation
2:52 honestly like
2:57 okay but uh look Pimco uh it's a it's a
2:59 a firm that actually originates from the
3:01 US our head office is over in Newport
3:04 Beach California and uh that of course
3:07 is um you know where the the firm began
3:10 nearly was about 50 years ago now uh but
3:13 we've been in Australia since 1997 so
3:15 very much uh I guess a local footprint
3:17 and one that's very well known to the
3:19 institutional and the advised Community
3:22 here now fixed income for many retail
3:25 investors won't form a big part of their
3:27 portfolio partly due to accessibility uh
3:30 for some of the the funds and and I
3:32 guess bonds themselves but then also due
3:34 to the low rate environment we've been
3:36 through for the last you know decade
3:41 post GFC uh QA falling rates uh fixed
3:42 interest wasn't really the place a lot
3:45 of investors were going but things are
3:48 changing so for those new to the asset
3:49 class for those thinking about fixed
3:51 income again in a you know different
3:53 rate environment make the case for fixed
3:58 income for us sure so I think as you
3:59 rightly mentioned at the start fixing
4:01 income hasn't historically been a large
4:05 part of retail investors uh portfolios
4:06 whereas in the institutional space it
4:09 tends to make up as much as 40% now
4:12 there's a lot of reasons for that uh but
4:13 I'd start off with the defensive
4:17 characteristics of fixed income um but
4:19 the other aspect that I think is really
4:21 important and and you brought that up
4:22 around the environment that we find
4:25 ourselves in is that interest rates
4:27 having gone through the largest increase
4:29 in the interest rate cycle uh that we've
4:32 seen in over 30 years are now at a level
4:34 where they represent very attractive
4:37 returns for uh for end investors and so
4:40 uh for example the some of the
4:41 strategies that we're going to discuss
4:44 later on today uh have a uh yield to
4:46 maturity that is in the sort of sixes
4:48 and even as high as 7% in some of the
4:51 strategies so very attractive returns
4:52 and an environment that we find
4:54 ourselves in at the moment which has a
4:56 lot of uncertainty can represent an
4:58 attractive alternative to other asset
5:01 classes just to contextualize that 6 or
5:04 7% like where where is that on average
5:06 or sit on on average compared to I guess
5:08 the last sort of decade or so it's
5:10 easily the most attractive uh level of
5:13 yields that we've seen in over a decade
5:15 uh so that sort of gives you a rough
5:17 idea of how to contextualize that and
5:19 the other thing that I think i' I'd use
5:21 to contextualize it is that right now if
5:23 you were to look at Major Bank uh term
5:25 deposits which are often seen as an
5:27 alternative somewhere to park your cash
5:29 while you're waiting to look for perhaps
5:31 a more racy investment um those are
5:33 presenting at around about
5:36 3.95% so you know with yields in in that
5:40 sort of five uh you know plus percent uh
5:42 for yield to maturity for the strategies
5:44 that I mentioned a pretty attractive
5:47 alternative and and one that has a uh
5:49 fairly safe and stable uh Outlook that
5:52 is defensive now uh Bryce and I here at
5:54 Equity mates are quite uh big proponents
5:56 of the core and satellite approach to
5:59 portfolio construction so how do you see
6:01 uh fixed income fitting in a COR and satellite
6:02 satellite
6:05 portfolio the traditional answer to that
6:09 question uh which would be 6040 everyone
6:10 I think might have been familiar with
6:12 hearing that term of the 6040 portfolio
6:15 that would have 60% of your portfolio in
6:18 equity or Equity like um exposure 40% in
6:21 bonds and fixed income for a traditional
6:25 balanced portfolio uh now let's let's
6:27 take that as being the midpoint uh
6:30 depending on your age stage and uh your
6:33 investment objectives that might range
6:36 uh from being as low as perhaps 20% for
6:39 someone who's very growth focused uh and
6:41 as high as 60 or 70% for someone who is
6:44 more uh towards the pension phase where
6:46 income and stability of assets is
6:48 important so very much in the core is
6:51 how I would describe it I read somewhere
6:53 and it's like very general but you can
6:57 you can say 110 minus your age is your
7:01 allocation to equities and like that
7:02 that like changes over your lifetime
7:04 then interesting have you ever heard
7:06 that before I I haven't heard that
7:10 before very scientific pretty scientific
7:12 I was trying to remember as I was saying
7:14 I think that's yeah 110 Min age is what
7:17 you should have to equi so for example
7:19 we're we're in we're 30 so you say 110
7:23 mons your age thank you so you say 80%
7:24 Equity 20% bonds but then like our
7:27 parents who might be you know in the C
7:30 70 then it's like 110 minus your age so
7:33 then they have 30% no 40% Equity yeah
7:35 yeah yeah do your own research yeah
7:38 anyway something to think
7:42 about so Sam um one of the biggest
7:44 debates in the equity markets is active
7:46 versus passive and you get people lining
7:49 up on both sides of those debate and um
7:51 it's it's become you know really big in
7:54 the context of the huge boom in passive
7:56 index investing over the past 10 years
7:58 there is a similar debate in the fixed
8:00 income World active vers versus passive
8:02 so give us a sense of the debate and
8:05 Pimco as an active manager give us why
8:07 you think active makes sense in fixed
8:09 income look the first point I'd make is
8:11 that it's a very worthwhile debate to
8:14 have uh it's a debate that I think uh
8:16 shifts through time and depending on
8:18 what regime that you find yourself in
8:19 and certainly is different across asset
8:22 classes um beginning where you did with
8:24 which is with equities uh I think you
8:26 have to look at the data uh you look at
8:29 the historic performance uh the um the
8:31 data that that I would refer to would be
8:33 uh Morning Star research that was put
8:37 out late last year uh where it shows
8:39 that over the last 10 years
8:42 approximately 40% of active Equity
8:45 managers have outperformed the Benchmark
8:49 so you had to be lucky to make sure that
8:51 you were invested with the right manager
8:53 and that that manager fell within the
8:57 40% every year looking at fixed income
9:00 it's actually the opposite story 70 25%
9:02 of active managers have beaten The
9:04 Benchmark over that same time frame so
9:06 you had to be unlucky to choose a
9:08 manager who was underperforming The
9:11 Benchmark and uh I think taking that one
9:14 step further what we hold ourselves to
9:16 is our own uh I guess peer group of
9:19 fixed income active managers and for
9:22 Pimco Over The Last 5 Years uh our
9:24 rolling performance for all of the
9:27 strategies that we run globally has been
9:29 that we have beaten 81%
9:32 uh of the median active manager so
9:34 pretty good statistics pretty good
9:36 numbers that suggest that active uh
9:38 Management in the fixed income space has
9:40 a strong
9:42 Foundation what are the some some of the
9:44 I guess characteristics that retail
9:47 investors should look for in an active
9:49 manager when I guess trying to decide
9:51 who who to who to back when considering
9:55 an active manager the one of the most
9:57 important aspects is the size of the
10:01 firm and the resources that are
10:03 available because for fixed income the
10:05 fixed income indices quite different
10:09 from equities are highly complicated so
10:10 to put that in perspective into
10:13 perspective the S&P 500 funnily enough
10:16 it does not have 500 uh shares or stocks
10:18 that make it up it's I think believe
10:22 it's 503 uh but the uh the Bloomberg
10:25 Global Bond U index which is of course
10:26 the equivalent Benchmark uh you know
10:29 really at a global level has over 35
10:34 ,000 underlying constituents and of that
10:36 35,000 a large portion of those don't
10:38 trade regularly so when you think about
10:41 how complex that is how hard it is to
10:43 make sure that you are managing an
10:46 exposure that uh not only matches but
10:48 exceeds The Benchmark uh what you
10:51 require is an organization with a lot of
10:53 breadth and depth to be able to reach
10:55 research those individual names and to
10:58 be able to transact in those individual
10:59 names right across the world so I think
11:03 size is an important aspect and then
11:05 history and performance I think history
11:07 and track record is another important
11:09 ingredient yeah and I think for people
11:11 who are newer to the fixed income Market
11:12 to try and get their head around that
11:14 complexity there's for me there's like
11:17 four different vectors that they need to
11:18 understand it's like the actual issue of
11:19 themselves like is it a corporate is it
11:22 a government then the duration so you
11:23 know is it a short-term bond is it a
11:25 long-term Bond if it is long-term how
11:27 long does it have left um to its
11:30 maturity and then there's credit ratings
11:32 as well so people probably heard like AA
11:35 a double A B um and then there's also
11:38 currency like the the bonds denominated
11:40 in so many different currencies and so
11:41 the complexity of that market even just
11:44 trying to explain it there it's it's
11:46 tough to get your head on I I spend my
11:47 whole life in that space and it sounds
11:49 complicated even when you explain it to
11:52 me there um look I I think what you've
11:54 done is paint the picture as to why
11:55 active management in the space is so
11:58 important uh it is a complicated space
12:01 it is very hard to access fixed income
12:05 as an end investor on a direct basis so
12:07 much of what active managers do is uh is
12:10 not only you know of course have that
12:12 obligation to chaperone towards the best
12:14 investments within that space but also
12:15 provide access which is not an easy
12:18 thing to have so let's ground uh active
12:21 decisions in the market of the moment
12:24 which is full of uncertainty I think uh
12:25 Pimco released a paper recently
12:27 uncertainty is certain seems to be the
12:31 only thinged know at the moment so uh
12:34 take us into the investment uh committee
12:35 uh at Pimco or like take us into the
12:37 room and talk to us about how the F how
12:39 your fund managers are approaching this
12:41 moment with that active haton and trying
12:43 to maximize outcomes for their clients
12:46 we have investment forums each quarter
12:48 and uh in each of those quarterly
12:51 investment forums the most senior
12:53 portfolio managers get together and
12:57 debate uh the different settings of um
13:00 of our portfolios and we start with the
13:03 big picture the macro so as you rightly
13:05 say uncertainty is certain that's our
13:06 theme at the moment and a lot of that is
13:09 being driven by the policy uncertainty
13:11 emanating from uh the the US
13:13 Administration uh but we also find
13:16 ourselves at a place where uh we have a
13:18 lot of geopolitical uncertainty uh and
13:21 we have Equity valuations that are close
13:23 to record highs we have a lot of moving
13:26 Parts here that make the landscape quite
13:28 an uncertain one so the start point for
13:29 us when we're making decisions around
13:32 how we construct the portfolios is to
13:34 try and design a portfolio that is going
13:37 to perform under a number of different
13:40 scenarios so of course we design it uh
13:42 with a A View to what our base case
13:44 might look like but we want to make sure
13:45 that it's something that is going to be
13:49 uh also um somewhat you know all weather
13:51 the other point that I'd make uh looking
13:53 at today's landscape and that
13:55 uncertainty is certain element of our
13:59 our current U view is that we have come
14:02 to the conclusion that looking at the
14:05 relative um yields that are available in
14:08 fixed income you don't have to stretch
14:10 out the risk curve uh in order to
14:12 achieve an attractive return our
14:14 strategies our core view at the moment
14:17 is to be up in quality uh and what that
14:21 means is to be more at the higher end uh
14:22 at the higher rated end of the
14:24 investment grade Spectrum uh on average
14:26 for our portfolios to increase those defensive
14:27 defensive
14:29 characteristics and so when you say base
14:32 case like perhaps using Australia as an
14:34 example like what what is your base case
14:36 from a macro point of view yeah so our
14:38 base case at the moment is a slowing of
14:42 growth uh and uh sticky inflation so uh
14:45 not a great mix for investors frankly
14:48 andir nice yeah that's right so not a
14:51 not not a great sort of base case but I
14:52 think the the one thing that maybe some
14:54 people you know people can take some
14:57 Solace from is that certainly our base
14:59 case is not a recession um although we
15:02 do see that as being a a higher
15:03 probability than it's been for quite
15:05 some time in that environment that is
15:08 quite uncertain one where we think that
15:10 growth is slowing uh inflation you know
15:12 we we don't think is going to accelerate
15:14 but we think is going to remain quite
15:16 sticky um that's an environment where
15:19 bonds and fixed income uh perform very
15:22 strongly and how how does that extend to
15:25 the US uh very similar sort of viewpoint
15:28 there uh but Al but with a backdrop of
15:29 of course policy uncertainty which at
15:31 the moment I think is making the job of
15:34 the US Federal Reserve a really tricky
15:36 one you know they is I'm sure you know
15:38 you're aware have a dual mandate
15:41 employment uh and inflation and at the
15:43 moment what we feel is that uh where
15:46 they may have in the past had some level
15:47 of policy flexibility to be ahead of the
15:51 curve and uh you know cut potentially in
15:53 anticipation uh of a weakening of the
15:55 employment Market uh because inflation
15:57 is sticky uh it may keep them on the
15:59 sidelines for longer than they might
16:02 otherwise be that said uh our our view
16:04 at the moment is that we will see uh 50
16:06 basis points worth of cuts so half a
16:08 percent of cuts from the Federal Reserve
16:10 uh throughout this year yeah right I
16:12 mean we got to ask this question well as
16:13 soon as you start talking about rate
16:15 Cuts do you have a base case for rate
16:18 Cuts in Australia yeah of course it's
16:19 something we spend a lot of time
16:22 debating um our case sorry our viewpoint
16:24 on rates in Australia is that we will
16:27 see uh three more rate Cuts this year so
16:30 75 basis points of rate Cuts still to
16:34 come so Sam on your uh base case for
16:37 Australia you said um slowing growth
16:38 which you would think okay well the RBA
16:40 needs to loosen policy and cut rates but
16:42 then sticky inflation which might sort
16:45 of temper that uh impulse so how do you
16:48 think they balance those two um parts of
16:50 your base case and I guess why does
16:53 three then become the right number what
16:56 we look at uh is the really I guess the
16:57 timing of each of those two things which
17:01 is to say uh what is the data telling us
17:03 about the speed of the economy how fast
17:05 will that slow down and how does that
17:07 play into where rates are set right now
17:09 so the starting point and the starting
17:12 point for us uh is a is a view that we
17:14 have restrictive settings today which is
17:17 to say that if the uh RBA was to move
17:19 back to a neutral setting uh there would
17:22 already need to be Cuts before you start
17:24 to take into account uh what we think is
17:27 a softening picture of growth uh and
17:29 that's really how we get to the 7 2
17:31 basis points worth of cuts and the
17:32 expectation is for that to be
17:36 represented by three um 25 basis point
17:39 Cuts uh and uh and that as I say is is
17:41 currently our base case God imagine if
17:43 they did three in one Australian housing
17:46 market would go crazy oh goodness me I
17:48 think unfortunately if they would do
17:50 three in one it would be an emergency
17:52 and other things might be going terribly
17:54 wrong so let's let's not hope for that
17:55 no no
17:57 no well Sam we're going to take a very
17:59 quick pause here on the other side we're
18:01 going to dig into the range of new
18:04 active ETFs that uh Pimco have launched
18:06 that are giving retail investors access
18:08 to your strategies but first a quick
18:10 message from you guys for over 50 years
18:12 Pimco have been at the Forefront of
18:14 fixed income investing blending deep
18:16 Market expertise with Innovative
18:18 strategies with their Rich history in
18:20 atfs having been one of the first
18:23 managers to list an active Bond ATF in
18:26 the US back in 2008 they continue to
18:28 focus on delivering innovative solutions
18:31 for investors around the world pimco's
18:33 new ETF range that we'll be unpacking in
18:35 a moment offers Australian investors
18:38 access to the same portfolio management
18:40 teams the time- tested investment
18:42 process and inhouse research that have
18:45 helped it to become an industry leader
18:46 delivering strong outcomes for their
18:49 clients over decades and across every
18:50 different Market environment so a
18:52 massive thank you to Pimco uh for
18:54 sponsoring this episode and helping us
18:56 keep all of our content here at Equity
18:59 mates free and to learn more about pinco
19:01 visit their website pin.com
19:04 all right well Sam thanks for bearing
19:06 with us there and thank you for helping
19:08 us keep our content free here at Equity
19:10 mates let's turn to the range of active
19:13 ETFs you've launched four active fixed
19:16 income ETFs uh in Australia not doing
19:18 anything in half measures you love to
19:21 see um why was now the right time uh to
19:23 launch these as I as you just mentioned
19:25 we launched our first active ETF in the
19:30 US in 2008 and uh it feels like I'm sure
19:32 and and is a very long time between that
19:33 and launching in Australia and there's a
19:36 few reasons behind that and what really
19:38 drove us to look at now as being the
19:41 right time to launch the ETFs uh the
19:44 first thing is the rate picture and uh
19:45 the environment that we're in right now
19:48 being one where fixed income as an asset
19:50 class is attractive from a return
19:52 perspective uh the second one is that
19:54 the uh exchang traded fund Market in
19:57 Australia uh really has uh grown and
20:01 accelerated as uh as an asset class uh
20:04 and what we've seen is uh something in
20:06 the order of 30% compound growth in that
20:08 market over the last decade so really
20:10 rapid growth but at the same time the
20:12 fixed income asset class is quite
20:14 underrepresented in terms of the range
20:16 of options that are available for
20:19 investors and so we took the decision
20:22 that we would uh look to our Flagship
20:24 funds that have historically only been
20:27 available to institutions and to uh
20:30 advisers professional advisers uh and
20:33 bring those to The Exchange to open them
20:36 up to a broader range of investors it's
20:37 uh yeah we love to see it because I
20:38 think for years since starting the
20:41 podcast we've we've both felt that uh
20:43 getting access to this asset class has
20:45 been very difficult so I think that's a
20:47 good point for us to explore the the
20:49 funds uh in a bit more detail can you
20:51 take us through the four funds that uh
20:53 have been launched so before we go into
20:56 detail on each of the funds uh I'll list
20:59 those four funds out for you so so the
21:01 first one is the Pimco Australian Bond
21:05 active ETF which has the ticker of
21:08 pus uh the second is the Pimco Global
21:11 Bond active ETF that has The Exchange
21:13 ticker of
21:16 PBF we also have the Pimco Diversified
21:20 fixed interest active ETF uh that has
21:24 The Exchange ticker of pdfi and finally
21:27 uh there is our pinco Global active ETF
21:30 uh that has the ticker of
21:33 PCD now if you think about how they fit
21:35 together and what the key differences
21:38 are between them uh the Australian fund
21:41 is one that of course is made up of
21:43 Australian fixed income securities uh it
21:47 is uh very much focused on high quality
21:50 uh fixed income it it benchmarks against
21:53 uh the Bloomberg um osbond Composite
21:56 Index which of course is is what we were
21:58 talking about when we were describing
22:00 the active versus passive before that
22:02 would be your passive Benchmark um and
22:04 uh it's a fund that has around about
22:06 $2.5 billion worth of assets that are
22:09 currently being managed uh within it um
22:13 for the Pimco Global bond fund uh that
22:14 is the largest fund that we have in
22:18 Australia and it's uh 8.3 billion of
22:19 assets under management currently and
22:22 The Benchmark for that one uh is the
22:25 Bloomberg uh Global composite sorry
22:27 Global aggregate index and that
22:28 Bloomberg Global aggregate IND index is
22:30 the one I referred to before that has
22:34 over 35,000 constituents uh now that's a
22:39 fund um uh that uh is is not just a
22:41 large one in Australia but is a very
22:43 substantial uh portion of the assets
22:46 that the Pimco run at a global level um
22:48 the third fund that I mentioned was the
22:50 Diversified fixed income fund and what
22:53 that is is actually a 50/50 split
22:55 between the Australian Bond and the
22:57 global bond fund and it's a a very
22:59 simple way for people to be able to add
23:02 a diversified fixed income exposure to their
23:03 their
23:05 portfolio uh the final one which I'll
23:08 I'll touch on um is the global credit
23:11 fund and the Global Credit fund uh that
23:13 moves a little bit further out the risk
23:15 Spectrum while still maintaining a high
23:18 quality investment grade Focus uh which
23:19 is to say that there's a little bit less
23:21 of the well there is less of The
23:24 Sovereign uh that makes up uh that uh
23:27 index um and uh the uh Global Credit
23:29 fund is one that has around about 1.2
23:32 billion worth of assets uh but maybe to
23:35 put it in perspective of yields uh
23:38 compared to the global Bond index which
23:41 has the much higher waiting towards uh
23:43 Sovereign or government bonds uh and
23:45 that has a yield to maturity of around about
23:46 about
23:49 6.3% yeah I I did want to ask a question
23:51 about the terminology there so it's it's
23:53 useful that you've um raise the
23:55 difference between the global Bond uh
23:58 fund and the Global Credit fund because
23:59 um I was was going to ask what's the
24:01 difference in this case between bonds
24:02 and credit so you mentioned there that
24:04 the credit fund has less government
24:06 bonds but is there any other key
24:10 differences uh well the global bond fund
24:13 uh that Benchmark has approximately 40%
24:15 of the total Benchmark which is made up
24:18 of uh Government Bond issuers uh for the
24:20 Global Credit index it's the same
24:23 Benchmark without the sovereigns oh okay
24:25 so it is it is as uh as simple as that
24:27 it's the exact same Benchmark just
24:29 excluding the Sovereign the government
24:32 issuers yeah okay yeah right and so Sam
24:35 for for many of uh the equity mates
24:38 listeners today thinking you know um
24:39 just here's more ETFs coming to the
24:42 market how do you see people use these
24:45 four funds is it choosing just one or is
24:48 it a mix of both how how would you uh I
24:50 guess advise us to to think about the
24:52 portfolio construction look the way in
24:56 which we would uh propose uh is to start
24:58 with your core question of how much
24:59 fixed income should you have at a
25:03 portfolio level the question as to what
25:05 part of that uh should be tilted towards
25:08 the Australian versus the global Bond
25:09 that'll often be driven by people's
25:12 preference uh for where their
25:15 performance drivers might come from um
25:17 so for example uh we have a number of
25:20 clients that are uh much more focused on
25:23 a domestic portfolio they will hold
25:26 asx200 uh style uh Equity exposures and
25:28 they far prefer to have Australian bonds
25:30 and then we have others who are more
25:32 Global in their approach and uh prefer
25:34 to have something which is far more
25:37 Diversified uh that will instead use
25:40 either a component of of the global Bond
25:43 or or perhaps even uh a total sort of
25:46 skew towards the global Bond allocation
25:48 um the credit fund that I mentioned
25:53 before uh is a um move towards a more
25:56 performance oriented or performance
25:58 focused fixed income so think about that
26:01 being one step not a large step but one
26:03 step out the risk curve within fixed
26:07 income uh and so that is possibly uh
26:09 something which is more suitable um as
26:12 being a smaller allocation than a core
26:14 Global Bond um component or Australian
26:17 Bond component uh but one which will add
26:19 a higher expected return to uh to your
26:22 fixed income allocation nice now uh a
26:24 lot of these ETFs the underlying funds
26:26 have been around for decades I think
26:28 we're having a look the global Bond fund
26:32 uh Inception date was July 1998 so more
26:34 than 25 years at this point give us a
26:36 sense of their uh performance to date
26:39 and how how they've gone as unlisted
26:42 funds uh so for the global bond fund as
26:43 you rightly mentioned it's been around
26:46 since 1998 and since Inception the
26:48 performance of the global bond fund uh
26:51 has delivered after fees around about
26:54 half a percent uh of uh of performance
26:57 above the Benchmark and of course when
26:59 you're talking about what is that 26
27:02 years uh 27 years half a percent
27:05 compounds to a very large number of you
27:07 know amount of out performance
27:09 additional return over time uh and
27:11 looking at a shorter period of time
27:12 which is to say how it's performed in
27:15 the last one year uh it's delivered net
27:18 of fees uh just under 90 basis points or
27:22 or 089 of a perc uh of performance above
27:24 the Benchmark so very strong returns uh
27:28 over both the uh very very longterm and
27:30 the short-term time
27:32 Horizon well Sam that uh brings us to
27:34 the end of today's episode we thank you
27:37 so much for coming in um congratulations
27:40 on the launch of of the ETFs we love uh
27:42 seeing Global fund managers bring their
27:44 their funds to Australia and make them
27:46 active uh make them available for us as
27:49 retail investors so uh we look forward
27:51 to seeing what else comes and uh and
27:52 yeah thanks for coming in today
27:54 fantastic thank you very much for having me
27:59 thanks I will say about investing
28:00 everything you do learn is cumulative
28:04 what I learned at 20 is use [Music]
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