How to use ETFs

Hi Jeff,

• We think leveraged ETFs for a broad market exposure can stack up if they are matched with the right investor. We do not use leveraged ETF’s in our portfolio’s because we are a broad church, with many different types of subscribers, offering general advice only. The decision to use leverage is a personal one which a subscriber may make themselves (or by seeking advice). For example, to increase the return profile of our new Core ETF Portfolio, instead of holding the A200 ETF, a subscriber may decide to hold the GEAR which is the A200’s leveraged version that will amplify moves either way, however we stress, that decision should be made on a personal level, and because we don’t offer personal advice, we keep things on an unleveraged basis in our portfolios. The same would be true with the decision to use a margin loan against a basket of equities for instance.
• Leveraged long ETFs can be held longer term. We would not advocate holding leveraged short ETFs longer term due to how the exposures are managed by the ETF provider.
• When we think about investing, we think about exposures. We can’t see any reason to use a leveraged ETF with an unleveraged ETF of the same ilk. Think about the exposure to the underlying as the anchor point. If we want 100k exposure to the ASX 200 for instance, we can outlay 100k and buy the A200 or we can outlay ~$50k and buy the GEAR, same exposure, different capital investment.
• RE International – unlike Australia, the US market houses true global businesses, so being listed in the US does not mean they are only exposed to that market. That said, we like the regulatory set up in the US and for stocks we own that are listed on multiple exchanges, such as Pershing Square, we would generally choose the US listing to buy.

chart

Pershing Square (PSHZF US)

LAST UPDATED 17/02/2024 07:48

Close

chart

Pershing Square (PSHZF US)

LAST UPDATED 17/02/2024 07:48