SAVE ETF report

Pinnacle Investment Management SAVE ETF (ASX:SAVE)

The SAVE ETF is issued by Pinnacle and managed by Omega Global Investors and is designed to achieve a 4% annual return by investing in a variety of income-generating securities, such as shares, fixed income and currency exposures. We categorise it as a multi-asset fund.

This free report is issued by Best ETFs Australia, a division of The Rask Group Pty Ltd. It is not a recommendation. Speak to a financial professional before relying on this information and please read our Financial Services Guide (FSG).

SAVE ETF Fast Facts

Multi-Asset sector

Active ETF (e.g. ETMF) strategy

Issuer: Pinnacle Investment Management


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Pinnacle Investment Management SAVE ETF (ASX:SAVE) key information

Ticker code: SAVE Exchange: ASX Yearly fee: See ETF list
Geography: International Sector: Multi-Asset Distribution frequency: Monthly
DRP: No DRP Domicile: Australia Issuer: Pinnacle Investment Management
Registry: Automic ISIN code: AU0000054413 IRESS code: SAVE

SAVE: Track Record Warning

When an ETF does not have a sufficiently long track record -- typically, we consider this to be at least 3 years -- the ETF is could be at a higher risk of being closed down (if it doesn't grow), and the historical performance and returns (if any) cannot be relied upon.

Some of the risks associated with an ETF that has a short or no track record include:

  • Performance - When a fund, ETF or investment firm does not have a track record, it is often difficult to know what to expect from the investment. This is not the case with all ETFs that are new, especially if the ETF follows a highly liquid benchmark that has been in existence for five years or more. However, we apply the track record warning as a reminder to investors that it's important to think long and hard about how this ETF will perform, and its role in a portfolio. Please note: at Best ETFs Australia we do not accept 'backtests' as a legitimate form of performance.
  • Funds under management (FUM) - Although some of the largest ETF providers have established marketing departments and distribution teams, and joint ventures between distribution experts and boutique fund managers are now more common, new funds often fail to get enough money invested into them in the first 1-3 years to make them very profitable for the issuer. One obvious reason for this is most funds management and ETF ratings agencies (like us), who provide the ratings on fund managers for financial advisers, demand a three-year track record. We will accept a shorter-term track record (i.e. under three years), but it must meet a range of criteria before we will consider it a worthwhile fund/ETF.
  • Buy-sell spread - The buy-sell spread, shown on our ETF listings page and in fund/ETF factsheet and quarterly reports, tells you how much it 'costs' to get your money in-and-out of a fund. Basically, it's an estimate of what it costs the fund manager to take your money and invest in whatever is inside the fund/ETF. Obviously, the lower/smaller the spread is the better it is for you. New ETFs/funds can have difficulty lowering the buy-sell spread to a reasonable level until they reach scale (e.g. having FUM more than $100 million).

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Multi-Asset sector

The Best ETFs Australia multi-asset sector represents managed funds and ETFs which invest across and within various asset classes, including:

  • Australian shares
  • International shares
  • Fixed interest & bonds
  • Cash (including cash management trusts and ETFs)
  • Commodities, and
  • Currencies

For our purposes, every fund or ETF which invests across asset classes and uses an 'active' or 'dynamic' strategy -- i.e. it invests in more than traditional index funds or ETFs -- is considered a multi-asset fund. However, the investments made by the fund must include both 'risk-on' (e.g. shares, property, infrastructure, derivatives, etc.) and 'risk-off' asset classes (e.g. bonds, cash, currencies). Meaning, if a fund invests in, say, cash and short-term government bonds (both 'risk-off' asset classes) according to a well-defined index, we would consider that a 'cash plus' ETF, not a multi-asset fund or diversified ETF.

What exactly does Multi-Asset invest in?

SAVE has various constraints or maximums which guide what it can invest in and how much to include. Overall, SAVE is exposed to multiple asset classes, including shares (local and global), fixed income (bonds and government securities) and cash. Typically, SAVE holds between 80 and 300 shares (40% – 80% of the portfolio), at least 10 investment-grade bonds and less than 10% cash.

Sector risks

Multi-asset ETFs are a relatively new development in the Australian ETF market and they are growing fast.

However, there is a number of risks you should be aware and monitor before you buy into a multi-asset ETF, and afterwards:

  • Dynamic rebalancing. In our opinion, one of the best features of a multi-asset ETF is the active or 'dynamic' rebalancing strategy. At Best ETFs Australia, we label ETFs and funds as 'multi-asset' if they use an active strategy or human input or oversight. You should read the Product Disclosure Statement to understand if you're comfortable with the target allocations set by the ETF issuer, but also with their strategy for rebalancing. If the rebalancing happens too frequently, excessive trading costs and taxes can be passed back to investors.
  • Issuer risk. We believe it's important to diversify across ETF issuers. Although multi-asset ETFs invest across multiple asset classes, it's important to consider using more than one ETF issuer's products to avoid becoming overly reliant upon one provider of ETFs. A lack of diversification could expose investors to the risks of having a majority, or in some case all, of the 'core' of their portfolio invested by just one investment management firm.
  • Sub-scale. Many of the currently available multi-asset ETFs are not yet profitable because they are small (in terms of FUM) and have low fees. This can increase the probability that an ETF issuer is forced to close the ETF.
  • Performance. It can difficult to track the performance and returns of a diversified or multi-asset ETF, especially when the target allocation is not regularly adhered to. However, we're confident multi-asset ETFs will become more transparent in time.
  • Track record. Most multi-asset ETFs have not been operating for at least three years. This is our typical minimum standard for providing a rating on an ETF.

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What you need to know about Pinnacle Investment Management

Pinnacle Investment Management is a Sydney-based investment firm which partners with small and boutique fund managers to help them grow their funds under management (FUM) through its established marketing and distribution network.

Pinnacle has so far partnered with popular fund managers in Antipodes, Hyperion, Plato and Resolution Capital.

Potential allocation for SAVE

This ETF might be used as part of a 'tactical' or 'satellite' allocation in a diversified long-term portfolio because of its unique strategy, costs, risk-reward profile and the expectation of long-term returns.

What is The Core-Satellite Approach?

A core-satellite approach puts investments into two 'buckets' depending on the expected risk and returns.

Bucket 1: Core Investments

The 'core' is the larger part of an investment portfolio and could be reserved for more conservative investments. For example, this might include diversified, low-cost and easy to understand funds, bonds, shares or ETFs.

If you're new to investing, the core is a good place to start.

Core ETFs might include:

  • Australian shares (index strategies)
  • Australian bonds and global bonds
  • Cash

Bucket 2: Satellite/Tactical Investments

The 'satellite' or tactical bucket is the smaller part of a portfolio (e.g. 0% to 30% of your entire portfolio). In this section, investors might decide to take more risk, invest in unique or unproven strategies, buy fast-growing individual shares, etc.

Tactical strategies could be higher risk, higher cost and more complicated strategies that are used in the hope of outperforming the averages (e.g. ASX 200, S&P 500, etc.).

Tactical ETFs might include:

  • Australian shares (rules-based strategies)
  • Global shares (rules-based strategies)
  • Commodity ETFs
  • Currency ETFs
  • Cash ETFs
  • Hedge funds

Typically, what is SAVE used for?

As an active ETF, SAVE is marketed as a fund for countering the negative effects of low interest rates and takes less risk than the stock market overall (as measured by Beta). It aims to ‘smooth’ the returns of investors in this way. Please note, we categorise this active ETF as a multi-asset fund given its active approach to allocations, and its fees and costs.

How do I invest in the aShares Global Dynamic Income Fund (Managed Fund) ETF ETF?

The easiest way to buy an ETF is through your online share brokerage account. Just search for the ticker code and buy it. The following podcast explains how to buy shares and ETFs for the first time.

Meaning, you can follow the exact same process for ETFs as you do for shares -- both can be purchased in one account.

Australian Investing 101

Don't have a brokerage account for ETFs?

Read our tutorial on understanding how share brokerage accounts work.

Is SAVE a good ETF?

We believe that knowing whether or not to invest in an ETF requires a lot of research, even for an ETF like this one. ETFs are long-term investments, so it's important to do the right amount of research into the ETF before you invest, and consider how it fits with your risk profile, strategy and the other investments in your portfolio.

Where you can go to find more research on this ETF:

Reports like this one on the Best ETFs Australia website were built to help you understand ETFs and to provide free access to news and research across all Australian ETFs, index funds and selected managed funds.

This report is the free version of our ETF reserach and it contains general information and should not be considered as a recommendation or personal financial advice. If you want to receive personal financial advice and have someone tailor the ETF research to you, you should speak to a financial adviser.

If you don't want to pay a financial adviser, here's what you can do:

  • Before doing anything, you should always read the ETF's Product Disclosure Statement (PDS), which should be available on the ETF provider/issuer's website. The PDS explains some of the risks, the fees and other important information.

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Disclaimer: Any information contained in this report is limited to general financial advice/information only. The information should not be relied upon because it has not taken into account your specific needs, goals or objectives. Please, consult with a licenced and trusted financial adviser before acting on the information. Past performance is no guarantee of future performance. Nothing in this article should be considered a guarantee. Investing is risky and can result in capital loss. By reading this website, you acknowledge this warning, having read our Financial Services Guide (FSG) and agree to our terms & conditions available here. This article is authorised by Owen Raszkiewicz of The Rask Group Pty Ltd.

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