SLAVA PLATKOV | from Dimensional Funds

I recently had the pleasure of chatting with Slava Platkov, a Senior Portfolio Manager and Vice President at Dimensional Fund Advisors’ Sydney office. Slava’s journey from Ukraine to Australia, his semi-professional football days, and his expertise in factor-based investing made for a fascinating conversation. We dove into how football’s lessons translate to investing, the principles behind Dimensional’s strategies, and what students need to succeed in finance.

Slava arrived in Australia in 1994 at age 13, leavinging Ukraine with his family. Learning English and adapting to a new culture wasn’t easy, especially for his parents, who gave up professional careers to start anew. As a sporty kid, Slava quickly found his place on the football field, playing semi-professionally in New South Wales’ state leagues. He described the vibrant, community-funded clubs with ethnic roots—Portuguese, Greek, Italian, Turkish—where rivalries burned bright. I could feel his passion for the game, especially when he likened his defensive midfield role to the discipline required in portfolio management.

At university, Slava studied commerce with majors in finance and actuarial studies, sparking his interest in investing. Actuarial studies gave him a deep understanding of risk, which he now applies at Dimensional. He explained that Dimensional, founded in 1981 by David Booth and Rex Sinquefield, manages $1.4 trillion globally, focusing on systematic, factor-based investing. They target small-cap and value stocks, which historically deliver higher returns, based on the groundbreaking 1992 research by Professors Eugene Fama and Kenneth French. Their three-factor model emphasizes small size, value, and profitability—metrics that Slava says are like the “holy grail” for building resilient portfolios.

What struck me was how Slava connected football’s discipline to investing. As a defensive midfielder, he had to stay positionally disciplined, resisting the urge to charge forward. Similarly, Dimensional’s approach avoids chasing hot stocks or timing markets. Instead, they cast a wide net, systematically selecting small, profitable, undervalued companies. This diversification, combined with trading flexibility, helps their portfolios weather market volatility. Slava emphasized resilience, noting that factor premiums, like the 4% annual outperformance of value over growth stocks over a century, come with volatility. Diversification and integrating signals (like combining small size, value, and profitability) are key to managing that risk.

We also discussed Dimensional’s unique business model. Unlike most fund managers, they historically restricted access to their funds through advisors who align with their long-term, disciplined philosophy. Their ETFs, launched recently, open the door to retail investors, but Slava noted that advisors still drive most uptake. Their funds, covering equities, REITs, fixed income, and infrastructure, offer low-cost solutions—expense ratios range from 16 to 60 basis points—making them attractive for building diversified portfolios.

As an adjunct lecturer at Macquarie Business School, Slava shared insights on preparing students for finance careers. I was surprised to hear that soft skills—like curiosity, teamwork, and communication—are as critical as technical knowledge. Students often overemphasise technical prowess, but Slava stressed that respecting diverse perspectives and staying in your lane (another football lesson!) are vital in the industry. He also highlighted that finance welcomes career changers from fields like science or engineering, bringing fresh perspectives to the table.

TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

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EPISODE TRANSCRIPT

Slava Platkov: When you rank companies on price to book, for example, or price to earnings, and you form a portfolio of companies that are cheap on price to earnings, and you form a portfolio of companies that are expensive on price to earnings, you track the performance of those two portfolio through time and you can see that what you expect has actually eventuated.

Phil: G'day, and welcome back to Shares for Beginners. Um, I'm Phil Macatello. What can football teach us about investing? And I'm talking about the real football, where you have a ball and a foot. And what key principles do students need to prepare them for a career in finance? Joining me today to talk about all of this and more is Slava Platkov. Hello, Slava.

Slava Platkov: Hif. Phil. Nice to be here. Thank you. Thank you very.

Phil: Yeah. Uh, thanks very much for coming on.

Slava Platkov: Yeah, yeah, yeah, course.

Phil: Slava Platkoff is a senior Portfolio manager and Vice President in Dimensional Sydney Office. He joined the firm in 2012 after previously working for a large Australian superannuation fund and a large global investment consulting firm. Slava is also an adjunct lecturer at Macquarie Business School where he teaches investment management and corporate finance subjects. So, Slava, let's start with your background and how you first came to Australia.

Slava Platkov: Yeah, yeah, so, um, a Ukrainian. I was born in the Ukraine, uh, it's country no one knew much about until recently, obviously. And yeah, we came to Australia in 1994 when I was 13 years old. And, you know, my parents, uh, were very young. They were in their mid-30s at the time. GR. My mother's side of the family came with us here as well. Yeah, I had to sort of. We spent sort of the first maybe 6 to 12 months learning English as a family, and then I went into year eight and then. Yeah, that's sort of how that happened.

Phil: Was it a difficult transition? I mean, I know from my parents coming from after the 50s, that the immigrants that came to Australia, it was always tough. I mean, always involved a lot of hard work, didn't it?

Slava Platkov: Yeah, I think it was a lot more difficult for my parents than it was for me. You know, like I said, they were in their mid-30s, they were both educated, they were professionals, and they had to give a lot of things up to come here and then they have to learn a new language. And the work that they started doing was completely different to what they were actually qualified in doing just because you had to get out there and start any money and move forward. So that would have been really difficult for them. For me it wasn't too bad. You know, you 13 years old, you pick up the language pretty quickly and then I was pretty sporty kid so I uh, ended up making a bunch of friends playing sport and yeah it wasn't too bad.

Phil: When did you start playing football as we're gonna call it through this episode?

Slava Platkov: Yeah, ye, yeah, footballs. Yeah. So I played it when I was very young back in the Ukraine. Interestingly when we came here, uh, when I was 13, the school I went to, not many people played football there. So I actually didn't play for good. Three, four years from about sort of 13 to maybe year 11, maybe 16. I was playing basketball as well cause I just wanted to make friends and whatever everyone else was playing I wanted to play too. But then yeah, come I shifted schools. I went to a private school in year 11 and sport was compulsory. So winter sport. Do you wanna play rugby or do younna play football? Obviously I chose football and that's kind of how I started playing back and I got pretty passionate about ever since then.

Phil: And you played at a professional level as well didn't you?

Slava Platkov: Semi professionalm professional. So like the sort of the state league level if you like in New South Wales? Yeah, yeah. The evolution of football in this country, it's gone from very being ethnic based to you know, the A league has now being a professional league. And it was very similar at that state league level as well. You had clubs with you know, Portuguese groundings, you had you know, Greek clubs, Italian clubs, you had you know, Turkish clubs, what have you. So it was, and it was generally funded by the community as well. The existence of those clubs was really cool as ah, some big rivalries as well.

Phil: The rivalries were very passionate, weren't they?

Slava Platkov: Yeah, they really were and yeah but nowadays it's quite different. So my son actually plays, he's 12 years old, he plays for a club that I used to play for. But it's a very different connection because that ethnic connection is kind of gone now. They're properly funded entities now. Yeah.

Phil: So were you playing at the same time that you were studying at university and did you study finance it? You did study finance didn't you at first year?

Slava Platkov: Yeah, I did. I went to University of New South Wales, my commerce degree. The two majors there were finance and actuarial studies. I was playing football throughout that time and then as I went out into the workforce. I was all through my 20s, basically I was playing semi professional level football. My wife, I met her at 25, you know, we got engaged at 28. By that

00:05:00

Slava Platkov: stage I was. My football career was well and truly done.

Phil: So when did you first become interested in investing? Was it on a personal level or was it through your studies and understanding that maybe that this could be a career choice for you?

Slava Platkov: Yeah, through my studies and through my studies mainly, uh, I finished school in 99 and at that stage I started university. Straight away the Internet wasn't as popular, it wasn't as sort of prevalent at that stage yet. So it was actually quite difficult to get information around. You know, what is investment management? You know, like what. Because there's so many different types of investment management that's out there. And I was also doing actuarial study. So that's. That's a completely different word. Like what do actari actually do? I knew they were making decent money, I knew it was very technical. But what is it actually? So it wasn't easy to get that information. There weren't too many people around that you could talk to. And like I said, Internet wasn't as prevalent. So it's much easier for people now. But yeah, so, but through university you start to learn economics, you start to learn finance, and then you've got your parents and they're all asking you, okay, know, you learn about the market and then you start to gok. I could actually enjoy giving people advice or managing people's money. That would actually be quite a cool thing to do to help people sort of grow their wealth, to help people make decisions about in times where markets are going through difficult periods in particular, helping people making decisions around those times is really, really important. And I started to sort of, that started to come to me and now it's kind of gone full circle. Because at Dimensional at a high level, that is the main reason why Dimensional has been so successful globally over the years. Because they've established such a strong connection with the advisor clients that they work with. And that connection is really based on the premise that we will help you, the advisor, communicate to your clients, particularly during periods of uncertainty. Because that is when you earn your stripes as an advisor and we as an independent manager will help you, will do everything possible for you to do your job to the best of your abilities during those periods. So it's kind of as you mature through your career, you realize that it's.

Phil: All coming around for full circle and actuarial studies. Cause there's a lot of fundies that I've, ah, spoken to who've got an actuarial background. Because it gives you a real grounding in risk as well, doesn't it?

Slava Platkov: Yeah, it's technical. I mean, to be honest, the university, the bachelor bit for actual is only the first step. You have to, you know, come out of your bachelor degree and do a few more stages to become a qualified actuary. I didn't pursue that. But the technical background is really important. You know, you learn a lot about how things are priced, how different instruments work, derivative instruments for example, so some more complex stuff, different payoff structures. And yes, to your point, you definitely learn a lot about risk and how to measure it and what it means. So that definitely came in handy.

Phil: Now, Dimensional is not very well known in Australia, although it's a very large company internationally, isn't it? Tell us a little bit about Dimensional and its role in the Australian market.

Slava Platkov: Yeah, it's such a great story. Very unique in many respects. We manage $1.4 trillion Australian dollars globally. So I think we might be like in the top 20 in terms of global fund managers, but I think we're one of very few in that top 20 that are still privately owned. And that'very much sets out the culture, uh, within Dimensional. So we started in 1981, which is the year that I was born. Coincidentally. We started by our founding, uh, principal, David Booth realized, um, that there is a bit of a gap in the marketplace, in the institutional marketplace. So the large pension funds in America, he realized that they couldn't get exposure to the very small companies that are out there in the marketplace. And the reason they couldn't get exposure to, because they didn't know how to implement, they didn't know how to trade them, they didn't know how to define what they are, and they didn't know how to sort of manage that portfolio continuously to make sure that that exposure stays the right exposure through time. And that's the solution that he came to in the marketplace. He, through really careful implementation, through being really flexible around which companies and being really thoughtful and deliberate about how to get that, he managed to win some business from the large pension fund in the US and manage a microap, the first microc cap portfolio, if you like. Interestingly you, the first six or seven years, I think it delivered horrible returns. So it would have been pretty tough at that point in time. And then after that the whole world of asset pricing, which is really where really smart people, academics are really trying to figure out what drives returns, what drives Returns for equities or whether it's bonds as well or different other interest. What can I say about the future returns of those companies by looking at the current information that I have in front of me which is basically prices and fundamentals. So that's how the asset pricing world started. And a really important paper that came out in 1992

00:10:00

Slava Platkov: by Professors Eugene Phi Ken French which are uh, actually the founding principles of our business as well. It'there it's those ideas that our portfolios are based on at the moment a dimensional. That paper came out in 92 and it said that um, on average uh exposure to small caps tend to deliver higher returns than the broader market. They also said that on average an exposure to cheap companies or company'trading at a discount value companies also gives you higher returns. So they called it the three factor model which is where you can get exposure to the broader market but you can also overweight or emphasize companies that are small, cheap. And that should give you uh, a superior return relative to just the broader market. And that additional return is really worth pursuing because if you look at just one addition, one percentage on like'just call it a million dollars. If you extrapolate that forward and you earn that 1% more and you compound it for over sort of 10, 20 years you end up with 20, 30% more money. @ the end of that period there were some really strong impetus as to why you would want to target those small value securities. That was the big, the big very important point in the existence of dimensional uh, in that sort of mid-90s period where we started managing a bunch of small cap and a bunch of value portfolios for clients. From a business perspective it also coincided with our foray into the advisor world. And that's where the majority of the capital that we manage now globally sits. It's 70% or so of our uh, or the money that 1.4 trillion that we manage is adviser money. And the reason that res we became a fifea service model so where we wanted to partner up with advisors that weren't getting any rebates or kickbacks from fund managers, I won't get any kickbacks from various insurance companies that were just this is how much money I managed for you as a client and this is how much I'm gonna charge you for managing that money. And that model where you've got a fifea service advisor, independent self licensed advisor, you've got a uh, client with their savings or their pension money and then you've got an independent fund manager that's helping the advisr to form that portfolio and take their client through those difficult. That became an incredibly powerful combination and that allowed for us to. Yeah, to thrive as a fund manager. And here we are.

Phil: Super. Is one of the most important investments you'll ever make. But how do you know if you're in the best fund for your situation? Head to lifeshera.com.au to find out more. Life Sherpa, uh, Australia's most affordable online financial advice. We often hear that the smaller end of the market, the small mid micro cap, is where the outside gains are and it's where smaller investors can outperform, uh, other managers because there's less competition in there. But how do you find it? I mean, presumably the position sizing would be difficult to manage because you've got a lot of dosh to deploy as compared to a smaller. How do you manage that?

Slava Platkov: Yeah, well, the percentage of your typical portfolio that gets allocated to small caps, for example, is smaller as well. Because as you say, it is a smaller part of the broader market. Right. So it's proportional in a sense. You may have an overweight because you think that part of the market has very great good prospects, but it's certainly proportional for in that sense. What is really important is the systematic approach that we carry out. We're not after any particular small cap at any point in time. What we're trying to do do is cast a net really wide across all of them. Right. Particularly if they are also profitable small caps or small caps that are trading at a discount. Those three combined is almost like our holy grail. That's where we wanna have the biggest overweight or the strongest exposure, if you like those type of small caps. But we wanna do it systematically across as many of those type of securities as possible. Right. And that allows for you to be very cost effective. That flexibility where, you know, today this particular small cap isn't trading with a lot of volume and it's expensive to execute. So I'll stay away from it today because there's 20 or 30 others that are giving me very similar characteristics. They're all trading at a discount, they're all pretty profitable and I can just focus on trying to execute those instead. Right. So that flexibility being able toer net wide and sort of working groups of companies in a diversified fashion, that really allows for us to get exposure to that asset class cost effectively.

Phil: Are, uh, you looking at the sectors that they're involved in as well? I'm sure you're looking at so many metrics you Know, because you have to really do, when you're casting the net widely, you've got to be looking at which sectors are going to be working and outperforming. Does the sectors that you look at change over time and are there any sectors that you re particularly like at the moment?

Slava Platkov: Yeah, absolutely. And the structure that drives the distribution of your portfolio across sectors is really the overweight that you have to small

00:15:00

Slava Platkov: value and high profitability security. That's the main objective of most of the portfolios that we manage. So that's the input, if you like. The output is the distribution across sectors. So at the moment, for example, if you just look at markets globally, there's generally a fair bit of consistency across the world. You know, sectors like the materials sectors like energy companies, they tend to be screening better across those three metrics. Right. So particularly valuation and profitability versus, you know, some of the M investment, information technology or consumer discretionary companies for example, they tend to be at this point in time more expensive and not as profitable. Right. Therefore you look at our portfolios and given that you've got that transparency in terms of what we are trying to achieve over time and the exposures that we're trying to deliver to our clients, you expect for our portfolio therefore at this point in time to be overweight, materials, energy and underweight information technology and consumer discretionary. But that can change through time. Right. Ten years ago or eight years ago or so, banks, ah, in our Australian equity portfolios for example, the banks were screening pretty attractive caus, they were pretty cheap at that point in time. Now we've got, it's so well documented how expensive CBA is and some of the other banks as well. So the sector rotation is very much part of realizing this value and size and profitability premiums in your portfolios. And we have to react to those changes, adjust our portfolios accordingly and deliver those exposures consistently to our clients.

Phil: Yeah, so I've noticed that a lot of the work is factor based investing. Can you explain that for listeners and especially for beginners in a very simple manner?

Slava Platkov: Yeah, I'll try. I think factor is just a metric. It's just something that you can rank securities on. Right. So the more common one, there's so many of them out there in the literature. I mean there was a paper that came out a few years ago called the fact Factor Zoo. I think it identified something like over 300 different factors or metrics that, you know, you can rent companies on and they generate some sort of uh, a difference in return. Right. Because that's what you're trying to do.

Phil: So these are particular factors. You look at them and you say you can assign a return based on that factor.

Slava Platkov: Well, you rank on that factor. Let's just say an easy one would be market capitalization. Right. So how large priceime shares, the outstanding, how large your company. So if you rank on market capitalization, so market capitalization is your factor. Right. But is there a factor premium? Right. When you rank on that factor, is there a group of companies that outperforms its counterparts and that's a factor premium. So if small caps for example, as a group perform stronger than uh, large caps over time, that becomes a factor premium. Now what you don't want is, you don't wanna just do, and this is why I was talking about the factor zoo. Uh, you don't wa wantna just try any single metric and to see what works, Right. That would be data mining and that's not very reliable. Right. What you wanna do is you wanna have some fundamental expectations around why a particular factor should even exist to start with before you even look at the data historically. Right. So why should a value company perform stronger than, you know, a growth company? Well, it could be a risk related story, it could be valuation driven, like the, you know, the valuation theory driven. Yeah. So you wanna have some expectations behind what factors should be out there, you should expect to perform better. And then you wanna do the ranking and test it all out historically to see whether that's actually been the case. And that's exactly the criteria that we apply dimensional. So we think first and foremost you know, why these factors should exist. And generally that's based on valuation theory. So the expected returns that the market applies to different securities are always gonna be driven by prices or cash flows. Right. So from a price perspective, all el SQL cheaper security should deliver your higher expected return. A uh, smaller security should deliver your higher expected return. Also all elseql A uh security with higher cash flow should deliver your higher expected return as well. So very fundamental, very theoretical expectations. And then if you go back, and we now can go back close to 100 years, cause we've got prize data in the US going back to 1928 I believe you can actually see that, you know, when you rank companies on price to book for example, or price to earnings, and you form a portfolio of companies that are cheap on price to earnings and you form a portfolio of companies that are expensive on price to earnings, you track the performance of those two portfolio through time and you could see that what you expected has Actually eventuated in a way that is quite statistically robust where you've got the cheap portfolio outperforming the expensive one by about 4% per reum over the last 100 years. So quite a significant spread. So then a manager like dimension, what we're really about is saying, okay, that's quite a significant spread. And that's given usut if I could just capture that spread systematically through time in a way that is cost effective,

00:20:00

Slava Platkov: that I could deliver that additional return to our clients in our portfolio. And that's really what we've been doing for over 40 years. Yeah.

Phil: So I wanted to talk about resilience and how resilience is critical for portfolio management. And I'm assuming this has got something to do with the, the footballer play, playing a football as well, because they basicallyire a bit of resilience, don't they?

Slava Platkov: It really does, yeah. Especially the position I played which was like a defensive centimet. It was, you know, it required a lot of positional or discipline. Um, so as much as in my head I wanted to sort of charge forward or you know, join the attack if you like. I had to, had to. Always there was another voice inside me that was saying, okay, you got toa stay, restrain yourself, restrain your position. And our approach to investing is very similar from that perspective. In fact, everything that we do at dimensional from an implementation perspective is around generating resilience to our portfolio. Because these premiums, these factor premiums that we're targeting, they're actually really volatile. So you have that 4% return that I spoke about that outperform, if you like, for value versus growth, that's 100 year number. The reality is the way it's realized is in a very volatile manner. And so it should be, right, you're not going to earn a premium if you're not going to bear the risk. Right. So everything that we do from an implementation perspective in terms of our portfolios is trying to figure out a way how can we protect the out portfolio from that volatility? How can we make them more resilient? Right. That's what we're trying to do. And some of the main things that we employ there are things like diversification is a really important one, Right. So you ca in the net really wide. That way you're just spreading your risk across as many stocks as possible. So that's a really important one. The other one that we do is we try to integrate these signals so we're never just after. We don't wanna be just overweight. All the value company in a naive way or all the small cap companies, we wanna make sure that we overweight value companies that are also small and are also profitable. When you combine those signals, the resilience increases in your overall portfolio and then the final one is just flexibility when it comes to implementation, having optionality. So uh, being able to say okay these two stocks today, as much as their characteristics are good for the our portfolios, let's not trade them today because they're too expensive to trades. So maybe there's a downward momentum characteristic that's coming through. Let's stay away from those today and let's focus on the other ones. So that optionality and which really comes from us being trading every single day, uh our portfolios and being really diversified, that's huge for the overall resilience of.

Phil: Our strategies and dimensional as a company. You mentioned before that you're mainly focusing on advisors and directing these funds to the advisors. But there's a dual nature with ETFs isn't there? That anyone can buy them.

Slava Platkov: Yeah.

Phil: How'that managed?

Slava Platkov: Yeah, that's an interesting story. The business model and the reason it's been so successful with the advisor market and you may know this feel is we used to control access to our funds. Right. Yourself cannot invest in our funds unless you go through an advisor. For your advisor to invest your money in our funds, right. The advisor would have to go through a bit of an induction process where they learn about how we invest. Right. And generally they come out of that process fairly aligned with our way of investing which is all about you know, controlling things you can control diversification, longevity. So long term investing. Right. Being really prudent around you know, market inflections and the decisions that you make around that, that's what our approach is all about. So advisors come out of that pretty well aligned and generally what that means is they uh, on the back of that uh, allocator a reasonably large chunk of their clients portfolios into dimensional funds. Right. And that's worked an absolute treat for us. Now to your point, you know there are some really good the ETFs which is another access points to the same portfolio. Cause we've launched dual excess ETFs nearly two years ago and some more last year. They all of a sudden we don't have that control anymore. Right. Uh, we can't cause anyone can just buy a stock. Right. But what we're seeing is still the take up into our ETFs is still coming from the same advisor client. So generally Speaking it's still people investing in our funds with the right intentions and with the right investment sort of know how if you like. It's just a different access point. Uh, access point in terms of investing in our portfs.

Phil: Yeah, no, that's interesting. So you oversee a diverse range of strategies from equities to REITs which uh, are uh, real estate investment trusts. What's the different approaches and the unique challenges of managing multi asset portfolios and also what are the strengths of them as well? Because diversity is not just in the market, it's in share markets itself, it's across a whole range of asset classes, isn't it?

Slava Platkov: Absolutely. And we also manage fixed interest. We've got probably somewhere

00:25:00

Slava Platkov: between 2 to 300 billion globally in fixed interest spio/fio We've got infrastructure, global listed infrastructure portfolios as well that we manage. So and that's again that's one of the reasons why we've been such a great solution for a lot of our advisor clients in particular because they can in theory form a portfolio for their clients just using just dimensional funds. Right? We give them access to the entire asset allocation equities, you know, fixed interest REITs, infrastructure, uh, you know, the whole portfolio which is very convenient if they wanna go down that route. But, but conceptually, irrespective of what asset class we manage, the approach is the same. Right? It's systematic and it's really trying to extract information from current market prices, you know, whether inequities, whether we're ranking on price to earnings and seeing where is that security in the ranking, should it be overweight or underweight, is it cheaper, is it expensive, is it small, is it large, is it profitable, is it low? Profitable? In bonds we're looking at yield curves which is market prices as well to tell us whether we should be targeting longer term bonds or shorter term bonds, government bonds versus corporate bonds. The approach is the same. We're not out guessing prices, we're not timing markets. This is a systematic approach where we're extracting information from current prices about what the future return should look like and we are readjusting our portfolios accordingly. The difference, and this is the challenge really is in the infrastructure that's required to do that. Because when you are uh, managing an equity portfolio in Australia, uh, we're talking about 500 odd securities that we work with there. Whereas if you go to a developed markets portfolio, we're all of a sudden talking about 6,000 securities. If you're talking about fixed interest portfolios, we're working across sort of 20,000 on bonds that we trade across. So the infrastructure behind absorbing that data from different vendors, organizing that data, making sure that it's clean, making sure that it's consistent, making sure that it's enriched from different vendors, and then pipeing that data through into our portfolio management systems for us to be able to operate every single day, that's really the difficult part. But in terms of investment wise, conceptually there's a lot of consistency about how we approach all of those different asset classes.

Phil: Take control of your investments. Shareight has you covered. It's Investopedia's number one tracking tool for DIY. Investors get four months free on an annual premium plan at sharesite.com sharesforbeginners what would you suggest for investors to consider when they're looking at different asset classes? I mean, I always say on this podcast, have a look at your superannuation and just see what the asseteah allocation is. Because most people think assets, stock market, ye, it's very simple, but there's many, many different ways of looking at it and very many different ways of weighting your portfolio. And I think this, your superannuation is a great way to start looking at what a conservative is, conservative balance fund and so forth. And these are all very compl. You know, for a beginner, they're very complex concepts. Yeah, just give us a little bit of an overview that might simplify this for listeners.

Slava Platkov: I couldn't agree with you more. I think my first advice would be to go get an advisor. Go get a professional advisor. I think people absolutely need advice. Whether you've got $500,000 in your superannuation or whether you've just sold your business and you've got $10 million either way, I think, you know, you can really destroy your wealth by making bad decisions. Markets are, uh, so volatile, they're so unpredictable. There is so much to understand. We've got some advisors that work with some of the smartest people out there, doctors, lawyers, and they just don't know how to invest. Right. So it's really important. My first advice would be to just get an advisor if you can't. To your point, looking at a simple superannuationation solution, and we are, in this country, are quite fortunate to have such a big superannuationation market. Looking at what they're offering in terms of their portfolio is a pretty good reference point. You just need to understand things like costs and, uh, et cetera. But that's not a bad start. But there's a couple of really key principles for you to sort of understand and anyone can really understand it. The first one is the split between your growth and your defensive assets is gonna be the main driver of what you're gonna, you ultimately uh, receive as an investor in terms of return. Right. And the really simple concept there is the more equities, which is a lot more volatile, the more volatility, the more risk there is around your return outcome. So maybe if you're 20 year old or 25 year old, you're not very sensitive to that volatilityuse, you've got a long time until you get that money. Maybe that's a way forward, right. And generally what you see is the younger investors have mostly growth portfolios, growth assets in their portfolios, which is predominantly equities. As you approach retirement or as you becoming more sensitive towards volatility, you should start to introduce some defensive assets

00:30:00

Slava Platkov: into your portfolio. And once you get to a pension stage, majority of your portfolio should probably be in defensive assets. So that is the one key principle to understand depending on where you are in live and how sensitive you out to volatility, get that growth defensive mix right for your risk profile. And that's an important first step. Once you're in there, it really does become mainly about things like costs and really just how much conviction you've got in the underlying managers that are managing that money for you professionally. Do you want to go with a traditional approach which is where managers uh, are exercising judgment, they are reaping apart balance.

Phil: These are fund managers, aren't they?

Slava Platkov: Fund managers? Traditional managers are that are trying to our guest price and trying to make really big subjective calls on various companies or markets that they invest in. Do you want to go down that route? And generally you pay much higher fees for that and the outcomes as a cohort for that group are pretty unsuccessful. Do you wanna do an index approach where you just, it's very much hands off and very cost effective, where you're just tracking a particular market. You know, you get a diversified portfolio, low turnover, low cost, not a bad way to start, but obviously you're not getting that additional return there as well. Or do you wanna do something that dimensional do, which is systematic, which is kind of your portfolio looks a little bit like the index, plenty of diversification, very cost effective, low turnover, but you are trying to deliver uh, additional return over and above the index like the traditional managers. You're just trying to do it in a more of a reliable, systematic fashion.

Phil: Yeah, there are some who say that the best predictor of returns is the lack of volatility in your portfolio because you don't get tempted to sell when you're panicking.

Slava Platkov: Yeah, yeah, exactly. Yeah. We've got some. You know, again, just going back to how we work with the advisors, we almost ramp up our communication and our service levels when markets go through periods of volatility. We had one back in April, you know those four days, the liberation day when Trump came out with all those commentary around tariffs. Markets fell by about 8% over a four day period. We ramp up our efforts in terms of the sales team and the client service team to go out to advisors and say, okay, your portfolio used to be a 50% equity, 50% fixed income portfolio is no longer that because the equity markets are falling 10% or so. So you need to readjust. So make a good decision for your client. And that should. And you that have. If they were to rebalance out of bonds back into equity at that point in time, you m. Equity markets have rallied back and that would have been really good outcome for their clients. So those type of situations are really important. And like I said at the very start, that's where the advisors earn their stripes.

Phil: Well, let's talk about your teaching career. What's it like? I mean you must get a lot of, uh, bright young things coming into the classroom. Does it uh, give you optimism for the future?

Slava Platkov: Yeah, yeah, I really enjoy it. There's actually nothing more rewarding than educating, you know, teaching someone something new and clearly observing their level of satisfaction that they've just absorbed something new, they've learned something, uh, and they feel good about themselves for doing that. And that's very reward. My job at Dimensional, a big part of it is about communicating as well. So that's also teaching helps with that as well. Cause I always think about how do you convey some of the more complex concepts in a way that's absorbable. But yeah, and they are, it is a responsibility. You these are teaching a master's course in particular. These are people that have been working in a particular industry for some time already and they've made a very deliberate decision to change careers or to progress their careers. And they're paying money to do that and they're allocating their time to do that. So it's a big responsibility to make sure that they have a good experience and they get what they want out of it and hopefully successful at making that next step. So it's a big responsibility as well.

Phil: Is there anything that you notice that they need to unlearn any common Misconceptions that people come into the course with.

Slava Platkov: Yeah, I think, you know, the softer skills are often put aside because it is a technical field that we are, uh, talking about. Finance, particularly masters, where they're quite technical and strong and they feel like that's what it's all about. But the reality is sort of being curious, being able to work in a team, being able to communicate some of those, being able to sort of take ownership of things, ask questions, have initiative. Those type of skills are just as important. And that's kind of where again, you could draw a lot of parallels. Your corporate life draws a lot of parallels in a football field where you kind of need to, you know, you almost need to, to respect the fact that other people's brains work differently to yours. Right. So you need to find that bit of patience. You need to respect the fact that your expectations are not the same expectations as other people. You need to learn how to stay in your lane. You need to learn how to delegate. Although things are those softer sort of things

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Slava Platkov: might be missing a little bit, or at least they're down weighted relative to the technical skills that master. Students generally think that it's all about those technical skills. It's not necessari.

Phil: Yeah, I've noticed there's quite a few people who change careers. Um, they come from something completely different, retrain and get into the finance industry because they started getting interested in investing on their own behalf and it became a passion for them. So it's something that can be done, isn't it? It's not, uh, absoly s not a closed, it's not a closed factory floor.

Slava Platkov: No, absolutely. Some of the better, uh, people that we've hired had similar experiences to what you describe. You know, they've not nearily and they.

Phil: Can come from a completely different background and that that brings something as well to the industry.

Slava Platkov: Exactly. I mean Dimensional was founded by sort of academics. A lot of the first people that we hired because we're carrying out a process. Some of the first people that were hired were just technical people, like scientists and mathematicians, engineers. But if you look at sort of how that's evolved through time, the recent past is really about people who. More investment people if feel like people who can communicate, people who can work in a team, who can collaborate. Yeah.

Phil: So you run 34 funds?

Slava Platkov: I believe we run 34 commingled funds. Yeah. We've got some separate accounts that we manage for our institutional clients as well. Yes. And it's about $65 billion in Australia.

Phil: That we manage so how can listeners find out more?

Slava Platkov: Well, you know, there's the website obviously they could listen to this podcast if they want as well. They can type in dimensional ETFs in their Google tab and they could get a bunch of information from there. Yeah.

Phil: What kind of expense ratios are involved?

Slava Platkov: These are cost, these are fairly low cost solutions. So we're talking about, it depends on the strategy but anywhere between sort of 20 basis points or even like 16 basis points. Some of our uh, sort of lower octane equity portfolio, 16, 17 basis points and then it goes up with the amount of, you know, the different markets that you introduc to your portfolio goes up with how much of an overeight that you have to size value your profitability and it goes up with how high of an octane is your portfolio. So if you've got a very definitive objective, like if you just want small caps or if you just want value stocks price tends to be a little bit higher. But we're talking 17 is probably the cheapest. Our emerging market portfolio or our smallout portfolio is somewhere around a 50, 60 basis point. So yeah, fairly low cost solution overall. Yeah.

Phil: Okay, so the big final question, um, where's Angeoster Coglou going to end up next?

Slava Platkov: Uh, ah, uh, who knows? I feel bad freing, you know, he was found out a little bit. He did win the Europa League. He won the first trophy for that club, first time in 17 years I believe. But he's also lost 22 out of 38 times during the Premier League season. Which, you know, if I'm the club owner, uh, and I'm thinking, all right, I'm gonna give this guy responsibility with a fair bit of money to buy new players and go into next season. That's a difficult decision after losing 22 times. So I understand that decision but I also, you know, I also feel bad for Renge but look, his teams play amazing football and it's a very, it's.

Phil: A very aggressive form of football as well, isn't it?

Slava Platkov: Very aggressive. There's a very strong identity there. There's going to be plenty of club owners who will want to try ang out. He's not going to be out of a job for a long time, but I'm sure of it.

Phil: And it's also a lesson for investors about um, the level of aggression you bring to the game, I guess.

Slava Platkov: Yeah, you need to make sure you do some risk management as well. Definitely, definitely.

Phil: Slava Klakkov, thank you very much for joining me today.

Slava Platkov: Thank you for having me. It was a lot of fun. Appreciate it. Phil thanks.

Phil: Thanks for listening to Shares for Beginners. You can find more at chesforbeginners.com. if you enjoy listening, please take a moment to rate or review in your podcast player or tell a friend who might want to learn more about investing for their future.

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