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Here’s what you need to know today

• During a two-and-a-half hour phone call between the US and Russian President, Vladimir Putin reportedly rejected Trump’s proposed 30-day ceasefire in Ukraine but did agree to halt attacks on Ukraine’s energy infrastructure. (SBS)
  

  
  

• Israeli Prime Minister Benjamin Netanyahu warned that his country’s latest strikes on Gaza, that killed at least 400 people, were “just the beginning”. He said that all future ceasefire talks would be “conducted only under fire”. (The Guardian)
  
  

• WiseTech founder Richard White has accepted the findings of a review that found he mislead his company’s board about the nature of several of his personal relationships. White controls almost 40% of WiseTech shares and has been clear he won’t be leaving the company anytime soon. (ABC News)
  
  

• Myer shares were down 3% yesterday, taking its loss to 40% for the year so far. The department store announced profit was down 40% for the first half after heavy discounting and logistics challenges. (AFR)
  
  

• Private credit has been the hottest asset class of late in Australia, but one of Australia’s large adviser networks has just put one of Australia’s largest private credit funds on notice. Court Financial has recommended advisers sell multiple funds run by Metrics Credit Partners, and initiating a broader review of private credit managers citing instability in the asset class. (AFR)
  
  

• Google just announced its biggest acquisition ever - paying $32 billion for cybersecurity company Wiz. The crazy thing for Wiz’s now-billionaire founders, the company was founded in just 2020. In July 2024, they rejected a $23 billion takeover offer from Google. (The Guardian)
  
  

• GM and Nvidia have announced a partnership to continue GM’s efforts in self-driving cars. For a decade GM has been working on autonomous robotaxis through its subsidiary Cruise, but it stopped funding that work in December 2024. Now GM will use Nvidia’s Drive AGX Platform, a high-performance in-vehicle computer capable of 1,000 trillion operations per second, to continue these efforts. (CNBC)
  
  

• The Victorian government has sent a land tax bill to 400,000 Victorians who run small businesses or Airbnbs from their family home. To be subject to land tax, the homeowner must earn more than $30,000 from the business and the value of the portion of the property being used to derive that income must be greater than the land tax threshold. Last year, the government lowered that threshold from $300k to $50k. (AFR)
  

• Estonia, Latvia, Lithuania and Poland have announced they will withdraw from an international convention against the use of antipersonnel landmines, pointing to a need to defend their eastern borders from Russia. (Reuters)
  
  

• Britain’s Labour government is introducing sweeping welfare reforms intended to cut at least £5 billion from the budget by 2030. Reforms will include narrowing the eligibility criteria for disability benefits. The reforms have sparked a furious revolt from Labour backbenchers, ending a run of good press for Sir Keir Starmer. (Independent)

What the…?

Bernard Arnault isn’t going anywhere. The owner of luxury-giant LVMH and the world’s 5th richest person has a strange rule at his company - the CEO and Chair of the Board must retire at 80 years old. At 76 years old, conversations have started around which of his 5 children, aged between 27 and 49 and all working for LVMH, would be named his successor.

However, Arnault is going a different route. He has proposed raising the retirement age at his company to 85 years old. The proposal will now go to shareholders for a vote, but with Arnault controlling 65% of the voting rights - we’d hazard a guess it will pass. (Lemonde)

Investing is a lifelong journey

Here’s what you can learn today.

Passive indexes versus active managers?

Community Question: How should investors evaluate actively managed funds versus passive index strategies when building their core portfolio holdings?

We put this question to Peter Nevill, Financial Adviser at Viola Private Wealth

In a general sense, we want to use managed funds to do something you can’t do yourself – harnessing the expertise the manager has in their respective niche or strategy to deliver performance. There is obviously a price to pay to access this, so make sure you don’t pay active fees for a (mostly) passive manager – we want their holdings and weightings to differ meaningfully from the benchmark. Otherwise, you will be better served just buying the low-cost broad-based index! There is a measure you can use that many managers will report in their factsheets and collateral, called ‘active share’ – this is their differentiation from the benchmark in what they hold (we want a high active share).

There is great value in incorporating different styles and expertise, whether this is a thematic such as disruptive technology, a high-conviction concentrated approach with a quality bias and valuation discipline, or a contrarian deep-value manager with a heavy quantitative analysis approach - subject matter expertise is incredibly valuable and can deliver consistent outperformance (after fees) if you back the right manager. With markets becoming increasingly concentrated (i.e. the Magnificent 7 in the US, the banks running and becoming an even larger part of the ASX200), and the fund flows from passive investing – utilising a manager that identifies value outside of the largest stocks is very useful. The risk is that passive investing works the same way in reverse, in a market selloff more of the largest stuff gets sold in its proportion to the index, then diversifying away from the mega-caps could have some value.

Typically, when looking to construct the international share allocations in a portfolio (for example), blending a core hedged passive index exposure with a number of active managers with different and complementary styles in looking to outperform can make the most sense. If you’re not seeking to outperform the benchmark, just own the index. It is important to acknowledge that ‘past performance is not indicative of future performance’, because that is absolutely true and there are no guarantees a manager with sustained outperformance will continue to do so. That being said, if I needed brain surgery, my starting point would be those surgeons with subject matter expertise, a demonstrated track record of successful surgeries, and the highest patient recovery rates!

Interested in speaking to Peter or another of our hand-picked financial advisers? Fill out the form on our website and we’ll put you in touch.

Overwhelmed by the number of ETFs?

Tune in to Get Started Investing

374 & counting - that is how many ETFs are now listed on the ASX. Whatever your preferred asset class, style of investing and time horizon, there are now multiple ETFs competing for your dollars.

Which is a great thing, but can be a little overwhelming. That is why we’re regularly comparing ETFs on our Get Started Investing podcast and YouTube channel. In the example above we compare the two most popular ASX-listed ETFs for investing in India: Global X India Nifty 50 ETF (NDIA) v Betashares India Quality ETF (IIND). Tune in to see which one comes out on top.

Want more Equity Mates?