James Wrigley

And then the product providers will then provide almost like a wrapper around the outside.

One area where you can get, and it's not the ETF version, it's the managed fund version of a lot of these indexes and the high growth option or the Australian share option or wherever it might be,

that is commonly used for children in this case is an investment bond.

And so you use the wrapper of an investment bond, which doesn't have this brutal tax rate that was mentioned.

The investment bond will pay a maximum rate of 30% tax.

Could even be an education bond that then has some added benefits if some of the money's been used for children's education.

But then through that umbrella of the investment bond or the education bond, you then pick one of these index-style investments.

Now, it's not the ETF.

They're just some of the rules around them.

It can't be an ETF.

But most of these providers also have a managed fund version of exactly the same thing.

A passive fund, right?

Yeah, and where the cost is almost identical to what the ETF version is.

So you can get the same investment experience.

You just own it in a different structure that doesn't come with these tax burdens like it does for children.

What do you think?

So the reason why they get a bit of a bad rap is that they pay a flat rate of 30% tax, whereas ordinary income, you've got the marginal tax rates.

But then also, and this is, you know, the world is moving in favor of investment bonds now.

Because you don't get the 50% CGT discount in the current world.

So a capital gain in an investment bond is taxed at 30%, no ifs or buts.