I’ve been thinking about what you said about the trade volumes (low turnover) for being so low, and now this article says it’s the 2nd most popular ETF in Australia.
VAS’s provider Vanguard tells us that this fund had $9.59 billion in funds under management (FUM) as of 31 October. That’s miles ahead of its closest rival, the iShares S&P 500 ETF (ASX: IVV), which has approximately $5.3 billion in FUM today."
To be honest I jumped on IVV because it seemed like it was very popular and had a proven track record and so as a layman wanting to play it safe I only did the basic research.
I would also expect that popularity would bring additional scrutiny regarding dividends, etc, and that most people must be happy with it. I’m clearly not an expect just trying to reconcile your comments to educate myself.
Yes. I am not sure how Vanguard became so popular, so quickly. I was a bit surprised when my son (24 and a novice investor) seemed to know about them.
I am very risk adverse but have some overseas managed investments. I note a few of the bigger overseas fund managers try to outperform the MSCI World Index (in Australia dollars terms) after fees and expenses. Best of all, their exposure is hedged against the $A.
I didn’t see any mention of this MSCI objective at Vanguard? Maybe Vanguard has got so big so quickly as its an easy way to diversify a portfolio?
I’m going to guess it’s a trickle down thing. People with advisers and super may have had a fair bit going to Vanguard in the past (we used them for cash, fixed interest and bonds). When they offered the ETF versions suddenly it was more accessible to everyone. Vanguard also do advertising on SBS. BetaShares is the one to me that came from nowhere.
The Barefoot Investor has also often talked about VAS with respect to ASX ETFs, so I wouldn’t be surprised if that, along with their own advertising campaigns, is translating to some increases in FUM.
Just to note, IVV is run by Blackrock (rather than Vanguard - Though I do also have some funds in Vanguard ETFS including VAS), and that’s the one that you were saying had very low turnover and I could potentially have trouble selling in a hurry, though if IVV is the 2nd most popular ETF it should be trading huge volumes.
From my perspective I wanted an investment that was rather blue chip/long term that was better than putting money in a savings account and earning little to no interest.
Trying to track the ASX200 like VAS, was a way to spread the risk of having shares, and I suppose it also made sense to pick a well known, well backed fund like Vanguard (or Blackrock).
While the USA and International ETF’s (IVV and VGS) have performed very well over the last 5 months, VAS has struggled, so it appears they are tracking their indices rather well (for better or for worse).
I sat in on a webinar by BetaShares yesterday, the topic was the crypto innovators ETF they released (CRYP) a month ago.
They definitely seemed extremely knowledgeable and quite level headed and cautious, which is a breath of fresh air after listening to all the crypto bulls.
They certainly didn’t come across as cowboys and I didn’t pick up on any red flags, they were very professional without being overly slick.
To my understanding…liquidity/volume concerns are irrelevant to most ETFs…well, at least the popular ones.
There are market makers, whose job is to track the NAV of the index, and provide (limitless?) liquidity on either side of the NAV.
Perhaps that spread increases during times of market volatility, but I think it would be relatively minor.
I just took a screenshot of VAS…there is >$400k of liquidity being provided on either side of the market…and the spread is minuscule…that isn’t retail investors, it’s big systemic market makers keeping things tight…at least that’s my understanding:
These cryptocurrencies could be ‘minnows’ in comparison to what is happening elsewhere in finance as central banks move into this space.
This Economist video is dated May 2021 (i.e. facebook has since abandoned a digital currency due to lack of support) and shows how cryptocurrencies like Bitcoin are a major disruptor to finance…but digital currencies issued by governments might be even more radical and they may even threaten the future of traditional banking.
Alipay is an enormous and hugely dominant financial business however recently the Chinese Government has intervened to stop their planned public listing.
You can see why in this video.
Banks that lend against crypto. Crypto mining companies, crypto exchanges, companies that manufacture crypto mining equipment.
There’s an industry behind these currencies, that is growing and profitable, and the ETFs have shares in these listed companies, but their share value is just as volatile as the currencies they support, if the crypto price crashes, so does their share price.
“Among them are Coinbase, the largest US-based cryptocurrency exchange (COIN), the Bitcoin mining company Riot Blockchain (RIOT), and business intelligence firm Microstrategy (MSTR)”
Yikes. Chinese firms listing in Hong Kong now is not good for investors.
The accounts provided by these firms were always a concern for many investors, but pivoting to a Hong Kong listing might allow these firms to move even further away from very expensive but normal international accounting standards, independent auditing requirements and reporting obligations.
I understand the listing structure in Hong Kong may be same/similar but we have to wait for the announcement.
FYI: China restricts foreign investment in industries such as internet, banking, mining, private education etc so Chinese businesses, Alibaba, DiDi, Pinduoduo, Baidu, JD.com, Nio ([NIO] and Tencent Music etc use a popular but wonky structure called VIE for IPOs to access foreign markets
VIE structure:
allows foreigners to own stakes i.e. share of the profits
investors don’t get voting rights.
structure has been used for the last 2 decades (when China didn’t yet have the available infrastructure /capital/resources to allow these companies to expand and grow internationally, now they have).
China has never fully endorsed this wonky VIE structure and now seems to be closing a loophole which allows VIE to operate in these foreign markets.
