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Ever wondered how the nuts and bolts of ETFs work? What goes into index tracking and making sure that it is achieved at the lowest possible cost? And are all indices created equal from a complexity perspective?

In answering these questions (and many more), Lauren Jacobs at Satrix* shows you what a day in the life of a portfolio manager looks like. As you’ll learn in this podcast, a great deal of work goes on behind the scenes to make Satrix ETFs as efficient as possible for investors.

This podcast was first published here.

*Satrix is a division of Sanlam Investment Management

Satrix Investments Pty Limited and Satrix Managers RF Pty Limited are authorised financial services providers. Nothing you have heard in this podcast should be construed as advice. Please do your own research and visit the Satrix website for more information on all their ETF products.

Full transcript:

The Finance Ghost: Welcome to this episode of the Ghost Stories podcast. It’s another one with the team from Satrix, who won a lot of awards, by the way, at the recent industry awards. I actually put something on Ghost Mail just this week about that, so go and check it out and see all the wonderful accolades that the Satrix team is receiving for all the excellent work that they do. And we’ve met so many of the team members over the course of this podcast series. But today we have someone new, which is really exciting.

So, Lauren Jacobs, you’re a senior portfolio manager at Satrix and I see that they finally managed to persuade you to come out and do a podcast with me. Welcome! I believe today is your first podcast, isn’t it?

Lauren Jacobs: Thanks for having me, Ghost. Yes, it is my first podcast. I’m quite excited, but also a little bit nervous. So let’s see how it goes.

The Finance Ghost: No, it’s going to be great, I promise. It’s much less scary than the markets, that I can absolutely assure you.

Lauren Jacobs: That is true! Yes.

The Finance Ghost: Yeah, exactly. So what we’re going to do today, the whole idea behind this podcast, is just a day in the life of a portfolio manager. But obviously I’m not going to miss the opportunity to ask you some interesting questions. Lauren, we were talking a bit off-air about how long you’ve been at Satrix and at Sanlam before that. I think you said you started at Sanlam basically in the global financial crisis, essentially 2008. So probably, I’m guessing, just before everything blew up, was it, or was it in the middle of all the pain?

Lauren Jacobs: Yeah, so I joined Sanlam in around November 2008. I’ve been at Sanlam in the group since 2008, so almost 16 years now. 17 years, almost. I’ve been at Satrix now for 11 years, since 2014. Obviously I came in, I wasn’t a portfolio manager before, so I came in as an analyst and worked my way up from there to do all the hard work. And here I am now as a senior portfolio manager.

The Finance Ghost: Yeah, very very nice. Look, I think you’ve gotten to see the incredible growth in ETFs in South Africa. And Satrix has always been at the forefront of that. A Satrix Top 40 ETF was the first ever listed thing that I bought. I can’t remember how many years ago that was now, but certainly very early in my career, that that was the first thing that I bought. I think a lot of people have a similar story, as that Satrix Top 40 ETF has been around for a very long time.

And of course these days, there’s a very broad product suite at Satrix. People think that ETFs – well, actually, I don’t think people think this anymore and I hope they don’t if they’ve been listening to the show, because I’m not sure how they would still believe that ETFs are a bit boring and a bit vanilla because they actually let you do a lot. They really let you do a lot.

Speaking of things that are not boring, I think the term “portfolio manager” is one of those jobs that really comes up a lot when you ask – look, if you ask a toddler, they’re going to tell you fireman or policewoman, take your pick, or I want to be a dinosaur when I’m big, that one too. But once you ask someone who’s a bit older and maybe someone who’s studying finance, maybe someone who’s early in their career, “portfolio manager” is one of those glamour jobs that tends to come up. It’s right up there with investment banker. You know the drill.

So was it always that way for you? Was that always where you were heading or did your road actually take some twists and turns along the way?

Lauren Jacobs: Yeah, very interesting. I actually started off in asset consulting in an analyst kind of role. And it gives you a very broad view of portfolios in general and what there is in terms of access for clients in all investment vehicles. And from there when I moved into Sanlam – and from there I went into private wealth, which was also quite interesting, again focused around clients – but when I came into Sanlam specifically, I was more on the back-end, support services, so performance and looking at portfolios from the bottom-up. Understanding how all the portfolios work, not only at that point index tracking, but also generally in the whole of Sanlam Investment Management. I think that gave me a very good background and understanding specifically for index management, or index tracking specifically, because it’s a very niche role.

People think: what is indexation? You’re just buying the index, you just can buy all the stocks and then you can go on holiday. But actually, you can’t! An active manager can, definitely. They can buy and hold for 6, 12, 18 months and say, oh, they’re riding the wave. But as an index tracker, you are held to your tracking performance. If you are behind the index by 1% or ahead of the index by 1%, you are not tracking. You have to be very close to that index return.

And it’s harder work trying to be close to that index return than actually just choosing stocks and letting them ride the wave. On a daily basis, we have to ensure that your portfolio looks like your benchmark. And any changes to the benchmark – the index changes seamlessly, If there’s a corporate action, if there’s a dividend, there’s nothing that has to be done on the benchmark to change the benchmark. But your portfolio, because it has to then mimic the benchmark, you have to implement that with a trade.

So there’s a lot of thought behind how do I trade this fund to get to that index change, at what point do I trade it? Because all the prices have to be the same as that of the index and how do I take into account the cost of these trades? It seems like indexation is passive, it’s so easy, but it takes a lot of hard work and it also takes a lot of – you have to have a lot of attention to detail, which it’s very important in terms of index tracking.

I started out as an analyst in Satrix and then moved on and learned how we track indices. When I started at Satrix, I think we had about 50 funds or portfolios that we looked after. We obviously had ETFs, we had some segregated mandates and now we’re sitting at 160+ portfolios. And the interesting part is that even though we are now at 160, we’re still only four portfolio managers. It’s important for us, we rely very heavily on technology and we are constantly evolving in the way in which we manage our portfolios using different technologies within the business. Yeah, so that’s just a little bit of what we do on our side.

The Finance Ghost: No, that was super interesting. I have always wondered about the nuts and bolts behind some of these ETFs, and obviously some of them are easier than others, right? It depends on the liquidity of the underlying instruments. We can get into some of that. There’s stuff that’s offshore, there’s stuff that’s local. So that is a pretty interesting area.

As I kind of expected, it’s a completely different job to what a portfolio manager would do in an active asset management environment where they are actually picking stocks, they are expressing a macroeconomic view, etc. And the reason why people are attracted to ETFs is (1) because of the low cost, so that’s a core part of what you’re doing obviously is keeping those costs down, and (2) because the ETFs just take all the emotion out of it, right? It’s not that you are investing in a specific asset manager and their worldview, which can change depending on what happens. The ETF’s job is to track, as you say, so I guess that’s what you’re measured by, right? Your tracking error and your costs to actually get the ETF right. And I’m sure, am I right, that some of them are easier than others? Some of them must give you serious headaches.

Lauren Jacobs: So in terms of indexation and tracking, specifically at Satrix we use physical tracking. So that means we hold the underlying stocks in the index, right? But you can do it one of two ways with physical stock. You can either do full replication, which means that in Satrix 40, there are 40 stocks in the portfolio. They’re the top 40 stocks, so they’re quite liquid. You can buy every single one of them in the same constituent weights as that of the index. But then you get an index like your MSCI World, which is 1300+ stocks. And you can’t necessarily buy all of those stocks – you can definitely buy them, but it’s going to be a bit costly and you know might not get everything you want depending on the size of your portfolio.

So what we do there, is we use optimisation. What it says is we take a subset of stocks in that index and we track the risk and return characteristics of the index using a subset of the 1,300 stocks. So maybe we use 900, maybe we use a thousand. We use a specific optimisation model that then looks at all the risk characteristics of the underlying stocks – where it is in terms of geography, what is the GICS sector and what are the other factors that may affect whether or not this subset can track the index. So, those are the two ways in which we actually track the indices.

Obviously where you have a Satrix 40, where there are 40 stocks and you can get them quite easily in the market if you have to trade for a corporate action or an index change, it’s quite easy to trade that portfolio. You would then do a full replication. But the implication there is that you have to ensure that any change to the index, any corporate action is implemented exactly as per the index or else you’re going to mistrack. So for example, when it comes to index rebalance, we prepare ahead of time. There are definitely some portfolios where it’s only the shares in issuance that change or it’s only the weighting factors that change.

But on top of that, you also have to remember that there are different index providers. So you have your FTSE/JSE, you have your S&P, you have your MSCI, there are a number of other index providers. And some of those index providers treat securities differently depending on is it a global view, is it a local only view, is it a country view from a global index provider, there are all these nuances that you have to take into account.

And maybe you trade in corporate action on one security, but across different indices it’s treated differently. So there’s a lot of preparation around how am I going to trade this fund, this fund and this fund if it’s a different index but the security is the same in all these funds, what is the plan? What time am I going to trade it? When am I going to trade? There are all these different nuances you have to take into account.

Over and above which index provider you are using, you also have to take into account the vehicle – is it a unit trust? Are there CIS rules? Is it an ETF, what are the rules there? Is it a segregated mandate? If you’re tracking offshore, is it a UCITS? There are just these layers of how am I going to trade this fund so that I don’t mistrack, given all of these rules that I have to take into account?

The Finance Ghost: Sho, that’s interesting. That’s genuinely interesting. It’s such a technical role, right? This is definitely not a case of read the market news and then express a view, not in the slightest. This is about taking the rules and making sure you apply them as best you can in the market. And how often are these indices typically rebalanced? Because it’s not every day, right? You’re not sitting and tracking something every day. It’s how often the index is rebalanced. And I’m sure that’s different per index, but what is it? What is the typical timeline?

Lauren Jacobs: So your market cap weighted indices, they generally rebalance once a quarter. FTSE/JSE is the third working Friday of each quarter, so March, June, September and December. And generally that falls close to a public holiday, which is not great for us, but you know, we work…

The Finance Ghost: …I saw the pain in your face there. There was – people can’t see it because this is not a video, but I saw the pain.

Lauren Jacobs: Yeah, generally it’s always around a public holiday, but yeah. So FTSE/JSE, usually those are the rebalance dates. Your MSCI, they rebalance in Feb, May, August and November, so there are different rebalance periods. Those are usually quarterly. For example, your bonds and your ILBs, those rebalance on a monthly basis and they have reweighting and reconstitution.

It just depends what the index is. You have your momentum or your factor indices, those might rebalance more frequently. We have some mandates that track, not Satrix Momentum, but other momentum indices where they actually rebalance monthly as well. It just depends how the index is constructed and what the index is trying to achieve that would dictate what the rebalance periods are. And then of course, when there’s a corporate action, your index also effectively rebalances depending what the construction methodology is. That can be anytime. Whenever a company does something weird and wonderful, we have to then implement it on the portfolio based on what the change is in the index.

The Finance Ghost: And they love doing weird and wonderful, right? This happens a lot. I loved what you raised earlier about the full replication versus the optimisation – obviously, that’s such a cool thing, right? So it’s all about cost/benefit. Technically, could you go own all 1,300 stocks in, I think you said the MSCI? You probably could, but I can imagine that’s very expensive and you’re owning a long tail of stocks that actually contribute a very tiny percentage of how the index moves. And I guess the argument is, well, the cost outweighs the benefit of having that long tail of stocks. And then you use some other clever ways to replicate. Right?

Lauren Jacobs: Yeah. So it’s quite interesting because we obviously manage a local fund where we buy the underlying stocks in the MSCI World which is our Satrix MSCI World Unit Trust. But we also manage Irish-based funds or Irish-domiciled funds for Sanlam Asset Management Ireland and those are UCITS vehicles. We also track MSCI World there. So what we’ve had to do across the two different vehicles, given the different regulations for each vehicle, locally because of your BN90 rules in your unit trusts we’ve actually had to go and hold all the stocks in the MSCI World. So that effectively is a once-off trade because your smaller stocks when it comes to the index reviews there might not specifically be any changes there. So you can then, once you now hold everything, do an optimisation where you every time you trade you’re maybe not buying 1,300 stocks. You only buy a subset when you have to reinvest cash or for corporate action.

Whereas on the UCITS side, we hold whatever, a thousand stocks, and I mean obviously there is an effect on, on what return you get because when you’re holding all the stocks maybe some of the smaller stocks can contribute quite a bit if that is 1.5% and all the small caps are doing well, then you know you do miss out on that if you’re not holding it in your optimised model.

But yeah, I think it’s just interesting how also indices have changed over time. So when I started, I think there were 1,500 or 1,600 stocks in MSCI World and now there’s only 1,300. So it is easier to get all of those stocks and also because most of the time you’re doing a once-off trade and then maybe when you have to sell it to go in for an index deletion.

And then when you look at the FTSE/JSE, similarly when I started working at Satrix there were about 160 stocks in the index. We also did an optimisation on the local All-Share trackers – capped SWIX, capped All-Share, All-Share and your SWIX indices. At that point we also did an optimisation because the liquidity in that tail was not great.

We’re now it’s sitting at what, 126 stocks. So we actually are holding almost all of those. But there are obviously liquidity issues in some of the stocks in the index. And because we are quite a large player, if we need to trade, we can’t go and trade a stock that takes five, six, seven days to trade. So we do look at liquidity there. So, yeah, that’s just how indices have changed over time and how they’re constantly changing and the way in which companies are coming in or going out of the indices. It’s very interesting also, just how it’s changed over time. And having been here as long as I’ve been, I’ve seen a lot of these changes coming through.

The Finance Ghost: Yeah, you raised there something I wanted to actually ask you anyway, which is how you’ve basically been – well, Satrix has been a victim of its own success in some regards because some of these ETFs are quite big and so it’s more money that you need to move through potentially illiquid stocks. And people in the market are not stupid – if they know that something’s going to fall out of an index, then you’ve got traders, you’ve got hedge funds, you’ve got people with derivatives who know that there’s going to be selling pressure. If you know something is falling out the bottom of the Top 40 at the end of a particular quarter, you know that the ETFs need to dump that stock. You don’t have a choice – you have to track the index. And if you are a clever trader, you can play all kinds of interesting games around that. And that of course, is part of what you’re up against because you want to try and get out of it at the best possible price. That’s a market, that’s how a market works, right? You’ve got people on different sides of a trade. Everyone’s trying to either make money or manage according to a mandate. And that’s what, what keeps this big machine ticking that we both know and love so well.

Lauren Jacobs: Yeah, so we have to trade responsibly as well. We understand the impact of, as you said, they know we’re coming, they know three weeks before the time we’re coming and we’re going to be selling and we’re going to be buying and at what levels we need to buy and what percentage in the indices. So, when we come to market at index rebalances, we do a lot of liquidity testing beforehand. Once we know what’s going to happen in the index rebalance, we look at what’s coming in, what’s falling out, where we might have issues around selling or buying some stocks in the index.

And we also have to trade responsibly, so we make sure that say we are bringing in a new stock into the index, but if we see that it’s going to take longer to trade into the stock, we might also trade it longer so that we’re not pushing the price on that index rebalance day. We’re very conscious of our size. We’re conscious that yes, we want the closing price, but if we going to push the closing price way down, then we don’t want to affect the market in that way. So we do take steps to ensure that if we are going to be a big player in a stock that we manage that trade, whether it’s over a day or over two days to ensure that we don’t move the market too much in that regard.

But there are also surprises. So over time, sometimes you’ll be surprised on an index rebalance day because not only is everybody coming into the market so the volumes are high on that day, but also it’s usually around – well locally, specifically with FTSE/JSE, it’s usually futures close-out. There’s a lot of volume in the market. So sometimes, we might overthink it and maybe be very cautious. But there’s also a lot more volume at index rebalance because everybody is in the market so there just tends to be more availability of stock.

The more difficult part is actually when there’s corporate actions, right? Because if a stock is falling out and you’re getting cash and you have to reinvest it and it’s quite a large portfolio that’s like a random day in the week, it’s not an index rebalance day when there’s a lot of volume. So that is actually trickier than the index rebalance to prepare ahead of the time and say, okay, this is where we’re coming in.

So we work closely sometimes with the index providers as well and say, look, we understand this is coming up, but this is the impact for us. Is there another way to look at this? Can we bring in a cash line for a few days? So we, as a big provider of index tracking products, we also have to always look to the market and say: this is where we are and this is what’s going to impact us. Can we talk about it? Can we see what we can do?

We are very conscious of our impact, so we work very hard to ensure that we don’t create any changes in the market that could affect all investors.

The Finance Ghost: Yeah, brilliant. And that’s what an award-winning team does, right? It’s really, really good to learn some of that stuff. And you do see some really big changes. Hot off the press at the time of recording at least is what’s going on with Aspen. I’m not sure where Aspen is in the Top 40, but if they’re anywhere near the bottom, I don’t know if they’re going to be there on the next rebalancing because that share price was down like 30% when I looked, we’ll see where that shakes out. But this stuff happens and that’s what ends up, or that’s what drives things like index deletions. Or you have another stock that comes roaring up through the ranks and then gets into the index and obviously kicks something out the bottom.

It’s like football, right? Someone gets relegated out of the Top 40. That’s just how this game works. While we’ve still got some time, and because you’re obviously so passionate about everything you do, maybe just a high level question or two more around – I hate calling it passive investing, mainly because Nico shouts at me because he always says that allocating to an ETF is an active decision and of course he’s completely right. But you’ve been in both, it sounds like, and I mean just your experience working in ETFs for this long etc. – you obviously are passionate about the space. You obviously firmly believe in it, as do I. Do you advocate for, even just in your own money because obviously you’re not giving generic advice here, but just with your own money and how you do it, are ETFs a big part of your own wealth creation strategy?

Do you leave a little bit of space to do some active investing and do some stock picking as well or are you busy enough with index rebalancing?

Lauren Jacobs: So I’ve always kind of taken the stance that I’m not an analyst. I don’t know companies back and forth. But I do know that an index gives me this diversification. If you look at your Top 40, you’ve got such a diverse number of companies there and it’s also sometimes the companies you know – it’s an Absa, it’s a Woolies – and you’ve got this wide variety, but it’s in an index that is saying in terms of the market caps, here’s a Satrix 40, it’s giving you a diverse exposure to specific equities, but it’s not – yes, the active decision is choosing Satrix 40, but in terms of the underlying, I don’t have to make that decision. The index makes that decision.

I’ve always thought that using an index strategy not only allows this diversification in terms of the stocks, but also it doesn’t eat away at your performance because the costs are low. So that is where I advocate for index tracking, because the cost of active management and  the cost of “not index managers” is what is eating away at your performance over time. So even if you look at your retirement, because there you can also invest in Satrix Balanced, you can use that fund and the underlying is all index tracking but the cost is low. So, if you look over time, the amount of money you effectively “lose” in inverted commas to that performance fee of an active manager, you gain that by staying in the market with your index tracker and also getting it at the lower fee. So in my personal portfolios and so on, I do obviously gravitate towards your index tracking because that’s my passion. And also, it gives you a much broader environment to choose from. So if it’s local, if it’s offshore, it can be bonds, it can be ILBs, it gives you such a wide variety at such a low cost that you can pick and choose. Do you want to go global bonds? Do you want to go local property? It gives you so many options. And also at Satrix, we have a plethora of products to offer you.

So yeah, it’s also around just giving people options. When I talk to my kids about investing and about looking at an index and what it means, it’s really just showing them that there’s this wide variety of diversified set of stocks in this index that gives you such an opportunity to be able to invest in it to see how your money grows or changes over time and what the impact is of news in the market on those indices.

So, yeah, I’m a huge advocate for index tracking in your portfolio. And I will always be.

The Finance Ghost: Yeah, I mean it is great. Look, single stock picking is really tough and is a very, very – I don’t want to say dangerous, it’s not dangerous, but it’s something that you need to commit yourself to. It’s not something you can just do on the fly. I think a lot of people learned that the hard way in recent years and I always have mad respect for those who said: I got burnt or I don’t know what I’m doing here – it’s that Dunning-Kruger curve, they go into that like valley of hopelessness or whatever it is, I can’t remember exactly what it’s called – and then a percentage of them say, okay, I’m actually going to commit to learning about this. And they come out the other end with this wonderful skill set and you’ve just learned so much about business and everything else. I always think when I’m writing Ghost Mail, those are my people, the ones who really want to actually get up the curve because, yeah, I mean everyone loves being a concentrated portfolio hero until Aspen goes and smacks you in the face.

I’m looking at the chart now, again, relevant to time of recording only, obviously, but Aspen now over five years has returned a total of 2% after this latest fall in the share price – over five years, not per annum, total. It has absolutely been caned by this latest news flow. So you can go and have 20% of your portfolio in this high conviction position in Aspen and you would have looked like a hero right up until August 2024 roughly. And then you would have stopped looking like a hero very, very quickly.

It’s a tough game and that’s why ETFs I think are so important, even for someone like me who really enjoys stock picking and has a reasonable amount of knowledge I suppose around it, ETFs are just a very important building block for any portfolio. You absolutely have to have them in my opinion. They are the way you can add market returns to your portfolio, general equity exposure with the lowest possible cost.

And also, tax-free savings accounts, that’s the other thing I always talk about, is how important it is to max out the TFSA every year. I max mine every year. It’s my first port of call. Because you can then go and buy ETFs and again, it’s not quote unquote “boring” because you can go and rotate your exposure – basically your TFSA just builds this amazing walled garden over time where you can then rotate your exposure across ETFs without incurring any taxes. Again, that’s the active investor in me using passive instruments. Making Nico proud now!

But it just shows, ETFs are a tool in the market, they can be used for just a monthly debit order and long-term investing: perfect! There are also hedge funds who use ETFs to express a view on a whole sector if they can go short on the thing. It’s a really fascinating area of finance. And I think what’s been so great with this podcast is just learning the nuts and bolts that actually sit behind this thing because it is complicated to run these funds. And that’s your day-to-day.

Lauren Jacobs: Yeah, I mean in terms of ETFs, I’ve been at Satrix for a long time and obviously our product set has really evolved over time. What I’ve learned and what I’ve seen has expanded exponentially since I started here. You know, just the fact that we brought in the feeder portfolios, we’ve done multi asset funds, we’re now doing direct tracking in our Satrix Nasdaq, we’re doing direct tracking on MSCI World, I mean, how many people are actually doing that?

So, every day we’re learning something new. Every day we’re learning what the impact is of things that we do on the portfolio. So it’s always heartwarming for me to see when we get it right. We get a SALTA for tracking performance, for how tight our tracking is. That’s really important to us because we can’t sell a product and say we’re 1% behind the benchmark, that is not index tracking. We have to be super tight. Excluding costs and on a daily basis, if you are anywhere from between 1 and 2 basis points away from the index, it’s trouble because you know a client’s going to see that. And even like you say, your hedge fund managers that are using the ETFs for their portfolios, they also want to know that we’re going to be consistent, that we’re going to be consistent in our tracking. And consistency is very key in tracking.

I think there’s so much room for us to also grow in terms of innovation and technology. The fact that on an index rebalance day we are sending thousands of lines of trades through our trading desk, through all of our systems and how that has evolved over time. We have internal systems that we have enhanced with accessing the JSE data through their FTP site, whereas a lot of places are using emails or using Excel. We’ve got all of this technology at the tip of our fingers to just enhance our process and to ensure that that tracking is tight on a daily basis and for the client also to know that Satrix is consistent. You’re going to get what you asked for, what’s on the box is what is inside. And you can trust us, you can trust that the end of the day we have all our clients’ best interests at heart. We want to make sure that you’re getting your consistent tracking and we also want to learn how we can do it better if there’s a corporate action where we can maybe do a little bit better by taking the stock instead of cash. Can we do that? Can we give you a little bit more performance over and above your costs?

I think it’s important that when people are looking to invest their money, they look at someone that’s going to be consistent, that has been around in the industry for 20+ years and what we offer you is just – there are so many options and you’re going to get your money’s worth if you put it in.

And then in terms of tax-free savings, that’s always been very close to my heart because I think that it’s so difficult these days for anyone to save money. Everything’s getting expensive on a daily basis. You’re paying more and more for petrol, for food, for all of those things. But if you are able to put away as little as R100 a month in a tax-free savings, yes, you may not be able to max it out, but at least you’ve put something away. And that was something that I also learned early on. When you work in a corporate, obviously you can save towards retirement. And it was something that I learned very early on was that if you max your retirement percentage right from the beginning, before you get all your nice increases and your new job titles, when you start getting those increases, you don’t even feel sort of the cost of putting away that high percentage. You just carry on. This is what you get, this is what you get. But at the end of the day, you’re gaining, you are paying your future self by putting away more money every month.

And another thing around tax free savings is if you put away that R100 a month, but next year you get an increase at work and you just increase that R100 by that percentage, whether it’s 6%, whether it’s 3%, you start putting away a little bit more every year. And the way that money grows over time, if you watch it grow, it’s, it’s so amazing that if you just put it in there and you leave it there over time, you’ve got yourself a little nest egg. For the young ones that are coming out of varsity to start working, you’ve got your deposit for your car, you’ve got something to start and to buy a new home. It’s a beautiful thing, tax-free savings, so that you don’t have to pay that tax on it when you pay it out. And if you have kids, it’s really important to start early with them as well, start as early as possible so that they also understand that over time there’s just this compound growth that you can’t get it anywhere else, you can’t get it from buying a toy or whatever else, but just putting that money in over time, that growth is, is very good.

The Finance Ghost: Absolutely. So I think just to bring it to a close, just given your interesting career and how long you’ve been doing this for – if someone’s listening to this and they are either studying finance or perhaps they are in the financial space and they’re considering a career change – I think whenever you do one of these sort of “day in the life” shows, not that I do that much, or you just speak to someone who’s clearly successful and has done some really cool stuff, it’s always good to ask: what do you wish someone had told you? What is that one piece of advice you wish you had received?

I know it’s such a cliche question, but it is that for a reason, because it’s just that ability to impart just that one piece of wisdom now to everyone who’s listening, which is a wonderful opportunity.

Lauren Jacobs: So maybe I have two things…

The Finance Ghost: …two pieces of wisdom! There we go.

Lauren Jacobs: The first one is that you really have to be curious. And when I say be curious, I mean Google is your friend. If you’re unsure, Google it and ask the questions. No question is a dumb question. In my opinion, no question is a dumb question. You ask that question, Google, you find out what is going on and then go back and formulate an idea of what it is you want and also sometimes what it is you don’t want. But be curious. Always be curious.

And then the second part of it, a little bit of advice, is that nobody’s going to do it for you. So nobody’s going to put your hand up. Nobody’s going to say, oh, I think it should be Ghost, it should be Lauren. Only if you’re there and you put yourself first in front of that opportunity is it going to come to you, because you can’t sit back and think people are seeing your work or seeing your hard work if you are not stepping up and saying: I would like to do this, I would like to do that. That’s been essential in my career specifically, is that I put up my hand for things. Even if I didn’t know how to do it, I was curious. I found out how to do it and I put my hand up and I said, I want to do this. If it means you’re working after-hours to be able to upskill yourself or whatever it is, just put your hand up and put yourself there front and centre because nobody else is going to do it for you.

The Finance Ghost: Yeah, brilliant advice on both. Can’t fault that. I think the fact that people are either listening to this podcast or reading this transcript already takes the curiosity. I think the second piece of advice around, just give yourself a chance, put your hand up – it’s absolutely right. You’re going to get exactly the life that you design and the one that you want if you do that kind of stuff.

So, Lauren, thank you. I think this has been a very impressive podcast debut, I’ve got to tell you, I do hope to have you back because I’ve learnt some cool stuff from you today. I thought that this was really great. Thank you so much for your time.

If anyone wants to connect with you. Are you on the cringe festival that is LinkedIn? Just kidding. You know I’m more of an X/Twitter kind of guy, but are you on beloved LinkedIn if people want to connect?

Lauren Jacobs: I am on LinkedIn. You can connect with me there anytime, definitely. But thanks so much for having me. Ghost, this is actually – as much as it’s probably been great for you, it’s also been great for me just to tell my story and just my passion for index investing and it’s been amazing to chat to you and chat about it.

The Finance Ghost: Podcasts are fun! That’s why we do them. Lauren, thank you so much. And to the listeners, thanks for being here. We will be back soon with another Satrix team member. I don’t know – are there any more that you can dust off out of the cupboard, Lauren? Or are we getting – we’ll have to see. I’m always excited to see who I get.

Lauren Jacobs: We’ll have to see. We’ll have to see.

The Finance Ghost: Yeah, exactly. Exactly. Thanks for your time, Lauren. We’ll do another one of these.

Lauren Jacobs: Thanks.

The Finance Ghost: Ciao.

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