What is the measure of risk in ETFs and LICs?
16 August 2023
I started investing in 2019, not long before Covid-19 impacted the sharemarket. As noted in one of the first pearler podcasts, this has impacted my psychology of money in a negative way, as I straightaway saw my investments fall in price. I had bought LICs with the Magellan Financial Group, namely MFF, MGG and MGE. Luckily (in a way), I sold these as soon as I broke even. From my very basic understanding, the Magellan Financial Group had made some poorly timed investments such as Netflix, Meta and Alibaba and they have not been able to recover. See: https://www.fool.com.au/2022/03/17/down-80-whats-gone-so-wrong-for-magellan-asxmfg-shares/
I am a relatively new member here but from what I've gathered in this community, it seems wise to be putting a major portion of one's savings into Vanguard - VAS, VGS, VDHG. What's the likelihood of Vanguard - or iShares or ARG for that matter - following in the same footsteps as Magellan? Apparently, Magellan was one of the leaders in the field "As of June 2022, Magellan's industry award-winning team of 35 investment professionals are responsible for managing over AU$60-billion in stocks (as of July 2022)" See: https://marketmatters.com.au/company/magellan-financial-group-mfg/#:~:text=As%20of%20June%202022%2C%20Magellan's,(as%20of%20July%202022).
I haven't compared the size of their portfolios, but I'm assuming the other companies survived because they were more diverse with their investments.
If we reach FIRE and therefore end up with $300k invested in ARG (and the rest of the million spread between Vanguard and iShares), for example, should we fear such a collapse happening with one of these investment companies? Thank you!