What's the Risk?

In this episode of "What's the Risk," we take a look at the Fama French US High Profitability Research Index. While the original Fama-French model focused on three factors, this index emerged from their 2015 research update which expanded the framework to five factors. Fama and French identified that stocks with higher operating profitability have historically delivered higher expected returns that were not fully explained by market, size, or price-to-book metrics alone.Fama and French define this profitability by looking at a firm's operating income. Specifically, they calculate it by taking total revenue and subtracting the cost of goods sold, selling, general and administrative expenses, and interest expense, then dividing that figure by book equity. This process allows the index to filter for firms with "robust" internal earnings power, distinguishing them from "weak" firms that struggle to generate the same level of efficiency. By focusing on these high-margin businesses, the index seeks to isolate a specific dimension of stock returns that has persisted across different eras and markets.While the Fama French US High Profitability Research Index is not an investible index, the research by Fama and French continues to inform the methodology of Dimensional Fund Advisors, where Fama and French serve as board members.Want to learn more about investing? Search for "Your Investment Philosophy" on Amazon, Australian link: https://www.amazon.com.au/Your-Investment-Philosophy-Protecting-Fraudsters-ebook/dp/B0BCPJ8BGC/ https://www.mfg.com.au Mancell Financial Group is an Authorised Representative No. 226266 and Credit Representative No. 403187 of FYG Planners Pty Ltd, AFSL/ACL No. 224543. ABN 29 009 541 253.

In this episode of "What's the Risk" we take a look at the Fama French US Small Value Research Index. It is a research index from the Fama French model that tracks the performance of stocks with low price-to-book ratios.While over the long term, the value factor has shown outstanding performance, in recent years it has underperformed generally against large cap growth, but was stronger at least globally in 2025. Critics of various factors will point to such periods of underperformance as evidence that they no longer work, but this is often done during those periods of underperformance, and factors, such as value, have had many periods of underperformance against the wider market, but over the longer term performance has emerged. For investors who want to tilt their portfolio to target higher expected returns, this is a lesson in risk. Factors are not going to always perform as you wish,and they have historically required patience and discipline to capture. The index was created by academics Eugene Fama and Kenneth French, the Fama French US Value Research Index is not an investible index, but the research by Fama and French has, and continues to inform Dimensional Fund Advisors, where Fama and French are board members. Want to learn more about investing? Search for "Your Investment Philosophy" on Amazon, Australian link: https://www.amazon.com.au/Your-Investment-Philosophy-Protecting-Fraudsters-ebook/dp/B0BCPJ8BGC/ https://www.mfg.com.au Mancell Financial Group is an Authorised Representative No. 226266 and Credit Representative No. 403187 of FYG Planners Pty Ltd, AFSL/ACL No. 224543. ABN 29 009 541 253.

In this episode of "What's the Risk?" we take a look at something we get many requests for: how a diversified geared portfolio performs, something akin to Betashares GHHF. There are many limitations in trying to recreate something similar to GHHF over a long period of time with any accuracy, so we've tried to offer something that at least gives investors some history of how a similar asset allocation, consistently geared at 1.5x, would have performed since the mid 90's.What we do find is something that doesn't show many surprises in how it performs. At various periods it will be better and worse, which is simply magnified by the gearing.For comparison, we've used the indices VAS/VGS track on a 30/70 split and added in another portfolio construction with hedging to better compare to the diversified all growth geared portfolio construction. We hope this sheds a little bit of light on the portfolio, but just remember there are many other things that will add and subtract to the performance of a similar ETF in real life.Want to learn more about investing? Get our Book: https://www.amazon.com.au/Your-Investment-Philosophy-Protecting-Fraudsters-ebook/dp/B0BCPJ8BGC/ Mancell Financial Group is an Authorised Representative No. 226266 and Credit Representative No. 403187 of FYG Planners Pty Ltd, AFSL/ACL No. 224543. ABN 29 009 541 253.

In this episode of “What’s the Risk?” we take a look back on ETF returns for 2025.We’re a little bit late on this one, but it is worth having a look back on the prior year because it can help investors understand the variability of returns in the short run, and put some more context around slightly longer periods. It’s not an exhaustive look given the number of ETFs on offer now, but we highlight what has happened across Australia, global, emerging markets, and some thematics with the most popular ETFs in Australia, along with some of the smaller and wilder thematics out there.Want to learn more about investing? Get our Book: https://www.amazon.com.au/Your-Investment-Philosophy-Protecting-Fraudsters-ebook/dp/B0BCPJ8BGC/Mancell Financial Group is an Authorised Representative No. 226266 and Credit Representative No. 403187 of FYG Planners Pty Ltd, AFSL/ACL No. 224543. ABN 29 009 541 253.

In this episode of "What's the Risk?" we revisit the various constructions of MSCI World ex Australia Index and the S&P/ASX 300 Index (Total Return), 70/30, 60/40, 50/50, 40/60, 30/70, and look at their returns end 2025.Our previous video on the same topic was getting a little bit dated, as the data was end 2023. So, as it was continuing to get views, we felt it was appropriate to provide an update with the last 2 years of data included and show how things may have changed with these constructions.Some people would know the combination of the ETFs that seek to track the performance of these indices as the VAS/VGS split, so it gives a fuller picture of what those constructions would have done over the longer term. It's important to remember these are the underlying assets, do not factor taxes and trading costs, and they are rebalanced on an annual basis.Want to learn more about investing? Get our Book: https://www.amazon.com.au/Your-Investment-Philosophy-Protecting-Fraudsters-ebook/dp/B0BCPJ8BGC/ Mancell Financial Group is an Authorised Representative No. 226266 and Credit Representative No. 403187 of FYG Planners Pty Ltd, AFSL/ACL No. 224543. ABN 29 009 541 253.

Holdover from 2025 (so missing full year 25 data)In this episode of "What's the Risk?" we take a look at the historic performance of a diversified all growth index. In this instance, it's the current target asset allocation of Vanguard's VDAL ETF, which is a newish "all in one" product.As the most obvious competition is DHHF, we mention the differences in asset allocation and run a comparison on the performance of the historic returns of the asset allocation. We also throw in the VAS/VGS split indices to see how a simpler DIY decision may look.As mentioned previously, all in one products can be great options for many investors who are getting started, or just want to autopilot their investment journey. They can have some drawbacks, but in this instance we're just looking at the asset allocation, historic asset allocation, and the historic performance. Want to learn more about investing? Get our Book: https://www.amazon.com.au/Your-Investment-Philosophy-Protecting-Fraudsters-ebook/dp/B0BCPJ8BGC/ https://www.mfg.com.au Mancell Financial Group is an Authorised Representative No. 226266 and Credit Representative No. 403187 of FYG Planners Pty Ltd, AFSL/ACL No. 224543. ABN 29 009 541 253.