Index funds can't give you portfolio makers. #GrowthMindset

When we build portfolios, we are not simply picking an index fund.

Take the Vanguard Australian Share Fund as an example. It gives access to the top 300 companies in Australia, but companies ranked 100 to 300 only make up around 11 percent of the whole fund. Your exposure to those smaller and mid-sized businesses is tiny. It will not move the needle.

Research shows that once you hold more than about 12 to 15 companies, the benefit of adding more starts to taper off. That is why our portfolios are built deliberately. We include high-quality smaller and mid-cap businesses that may be at the early stage of their journey.

You stay diversified, but you also give yourself a chance to own a genuine portfolio maker. A business in the right sector, with strong fundamentals, that we believe in and then get lucky.

Promedicus is a great example. So is Altum, which was acquired by Renesas in July last year. Many clients who held those businesses for a long time have seen returns in excess of 1,000 percent.

If you only ever own broad index funds, you remove the possibility of owning one of those rare, life-changing performers.

General advice only
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#BuildingForTheFuture #OpportunityFocused #GrowthMindset #SmartStrategies #LongTermSuccess
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Robert Goudie (ASIC Reg 235974), Ashley Rowan (ASIC Reg 433899), Olivia Glare (ASIC Reg 1262290), Rachael Todman (ASIC Reg 1270413) & Amy Lehmann (ASIC Reg 1292710) are Authorised Representatives of Consortium Private Wealth Pty Ltd ABN 74 616 250 965 AFS Licence 495401.