Here’s what you need to know today

• Unusually, one of the largest stocks in the world has become one of the most volatile. Nvidia is up almost 30% in the past two weeks. In the month before that, it was down 27% and the two weeks before that it was up 14%. With Nvidia’s quarterly earnings coming up on 28 August, expect more volatility in the days ahead.
  
  

• The debate around gambling ads in Australia continues. Currently the government’s proposal would ban ads on social media and restrict them on broadcast TV and radio. Crossbench MPs have urged the Albanese government to extend the ban to include digital media and podcasts.
  
  

• Australia’s reporting season continues. Yesterday’s highlight had to be Telix Pharmaceuticals. The cancer diagnostics specialist reported a 65% increase in profit to $364 million for the half and $30m profit, compared to a $14 million loss for the first half last year.
  
  

• Operator of 279 of the 750 KFC outlets in Australia, Collins Foods saw shares fall 13% after it reported sales grew just 1.1%. Even KFC cannot avoid the cost-of-living crunch.
  
  

• Bank of Queensland is firing one-in-12 staff, 400 people in total, as it acknowledges the sustainability of its franchised in-person branch model “is very questionable”. The bank plans to reacquire 114 franchised branches and convert them to company-operated branches.
  
  

• The Reserve Bank of Australia is reviewing surcharges charged to Australians by digital payment providers. These are the extra costs charged by retailers if you choose to pay by a method other than cash. One estimate suggests that Australians pay $4 billion a year in surcharges, and that in 2022 they were charged on 7% of all card transactions.
  
  

• The gold price continues hitting record highs, reaching $2,531 US dollars an ounce. This is the highest it has been in history. The rising price is attributed to two factors: (1) the weakening US dollar with the prospect of interest rate cuts and (2) geopolitical uncertainty pushing investors to search for safety.
  
  

• The amount of money raised in US Presidential elections is mind-blowing. In the past month, Democratic nominee Kamala Harris has raised $500 million. We went back and looked at the 2020 election, $14 billion was spent more than double what was spent in 2016.
  
  

• Alex Cooper, host of the Call Her Daddy podcast, has signed a US$100 million deal ($148m AUD) to host her podcast exclusively with satellite radio network SiriusXM. This is as her 2021 $60m deal with Spotify comes to an end. Message to Spotify and SiriusXM: Equity Mates is open for a deal.

What the…?

Jeff Bezos just dropped $80 million on a Gulfstream G700, meaning he now has 4 planes collectively worth $200 million. You have to ask when he’d ever need all 4 planes - but he can afford them.

The G700 is one of the most exclusive planes on the market, so here’s a bit of wealth porn for your Friday.

Investing is a lifelong journey

Here’s what you can learn today.

How Phil King's Regal Funds mastered the ASX index inclusion trade

Regal Funds is one of Australian finance’s biggest success stories. Started in 2004, the company led by Phil King has grown to $6 billion assets under management after two decades of strong returns.

This article from Capital Brief outlines a strategy that Regal has found quite lucrative: investing in companies that are on their way to be added to the ASX 200 or ASX 300 index.

We thought this was a good illustration of the growing power of indexes. Once a company gets large enough and meets the criteria to be added to the ASX 200 or ASX 300, then all of the ETFs tracking those indexes go out and buy that stock at their next rebalance. This buying pressure can push the stock price up, and according to this Capital Brief analysis, is part of the reason Regal’s small cap fund has delivered 43% over the past 12 months.

This strategy isn’t without risk. To capture these investment returns, Regal still need to pick the right stocks and get set early before other investors start buying. But it is an interesting look at how the growth and popularity of index investing is creating opportunities for active investors.

Today’s sponsor is iShares by BlackRock

With iShares S&P ETFs like IOZ, IVV and IOO, you can get low-cost access to hundreds of the world’s largest companies in a single trade to help diversify your portfolio and help reduce the stress of selecting single stocks. Visit blackrock.com.au/ishares for information about their ETF range, or visit nabtrade.com.au to explore further insights, education and tips for getting started with ETFs.

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