International share v ETF’s

Thanks Andrew – we love those sorts of emails, it’s why we turn up day in, day out!

It’s easy to conclude that buying the index via a low cost ETF is the best way to go after a year like 2023, with the S&P 500 up 26%, however, its worth remembering that in 2022, the S&P 500 actually fell 19%.

At MM, we have a bias for stock picking, it’s what we’ve always done and it’s what we’re truly passionate about i.e. adding value over and above an index return, so we’re very biased in the conversation. The International Equities Portfolio that we launched (as a published portfolio) in 2019 has done around 6% better than the index annually, so that’s the main reason for stock picking v index backing, however, what we do like about index tracking ETFs is their simplicity, their structured nature, and most importantly, they introduce very Australian centric investors to a wider universe, which ultimately we think is beneficial. Blended portfolios with various asset classes and exposures around the world, get better risk adjusted returns over time,  in our view.