Spotlight: InvestSMART International Equities Portfolio
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It's been a decade since InvestSMART launched our first investment portfolios. The International Equities Portfolio was the first of our single asset class portfolios to hit the market, making its debut on 24 October 2014. Here's what you need to know.
About the InvestSMART International Equities Portfolio
The International Equities Portfolio invests in one to 10 exchange-traded funds (ETFs) to provide broad exposure to international equities across different market sectors and/or regions.
It is best suited to Aussies investing for longer-term goals as the minimum suggested investment timeframe is seven years.
Here are a few quick facts about the International Equities Portfolio:
- Inception date: 24 October 2014
- Suggested timeframe: 7-plus years
- Risk: Very high
- Minimum initial investment: $10,000
- Management fee: 0.55% p.a. capped at $550 p.a.
- Benchmark Index: MSCI World (ex-Australia) Total Return Index, unhedged
Where does the InvestSMART International Equities Portfolio invest?
The International Equities Portfolio has 99.5% invested in international shares with the remaining 0.5% in cash.
The ETFs that InvestSMART currently includes in the International Equities Portfolio are:
- iShares Asia 50 ETF (ASX: IAA)
- iShares S&P 500 ETF (ASX: IVV)
- Vanguard FTSE Europe Shares ETF (ASX: VEQ)
- Vanguard MSCI Index International Shares ETF (ASX: VGS)
Some of the underlying ETF holdings include Microsoft, Apple, NVIDIA, Taiwan Semiconductor Manufacturing and Amazon.com.
What are the fees?
InvestSMART's management fee is 0.55% a year. So, on a $10,000 investment (which is the minimum) that equates to $55 a year. The management fee is capped at $550 a year, which means that even if you have an investment worth more than $100,000 the most you'll pay is $550 a year.
Transaction costs, which cover InvestSMART's costs of buying and selling investments, also apply. This is mainly brokerage which is the greater of $4.40 per trade or 0.088% of the value of the trade and is paid entirely to a third-party broker.
There are also indirect costs charged by the underlying ETFs and for the International Equities portfolio that's estimated to be 0.18% a year.
How has the InvestSMART International Equities Portfolio performed?
The International Equities Portfolio has been a strong performer, averaging 11.67% a year since its inception in October 2014. In dollar terms, that means if you had invested $10,000 in the International Equities Portfolio when it first launched, your investment would have been worth $30,259 at the end of October 2024 - that's a total increase of 202.59%.
In the 12 months to the end of October 2024, the International Equities Portfolio provided a stellar return of 30.92%.
InvestSMART International Equities Portfolio performance
|
1 year |
3 yrs p.a. |
5 yrs p.a. |
SI p.a.1 |
|
|
Capital return |
27.92% |
9.03% |
10.44% |
9.77% |
|
Income return |
3.00% |
2.31% |
2.28% |
1.90% |
|
Total return |
30.92% |
11.34% |
12.72% |
11.67% |
Returns to 31 October 2024. 1Since inception on 24 October 2014.
How does the InvestSMART International Equities Portfolio compare to its peers?
The International Equities Portfolio has outperformed the majority of its peers both over the short and long term. As you can see from the table below, it has returned 12.72% p.a. over five years. The average annualised returns of its peer funds in this category was 8.86% over that same period.
International Equities Portfolio performance vs peers
|
1 year |
3 yrs p.a. |
5 yrs p.a. |
SI p.a.1 |
|
|
Growth Portfolio |
30.92% |
11.34% |
12.72% |
11.67% |
|
Peers |
23.42% |
8.26% |
8.86% |
8.73% |
|
Excess to peers |
7.50% |
3.08% |
3.86% |
2.94% |
Returns to 31 October 2024. 1Since inception on 24 October 2014.
And at 0.55% a year (capped at $550 a year) the International Equities Portfolio's management fee is lower than the average fee of its peer funds, which is sitting at 1.19% a year.
Key takeouts
The InvestSMART International Equities Portfolio is ideal if you are looking for exposure to global share markets to diversify your investment portfolio. It's an easy, low-cost way to invest in some of the world's biggest companies across Europe, Asia and the US but you need to be prepared for the volatility that can come with investing overseas. So it's vital to take a long-term view.
The management fee is very competitive and, while past performance is not a guarantee of future results, the portfolio's returns have been stronger than the majority of the competition.
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