Question: I have bought some Betashares Australian Dividend Harvester Fund ETF (HVST) for $21. So far, the capital loss is much greater than the dividend and there is no sign of recovery. What should I do? Sell or hold?
Answer (By Paul Rickard): On track record and security design, HVST is a sell.
One year performance to 31 January 2018 is -8.9%. Over that same 12 months, the S&P/ASX 200 Accumulation index is up by 12.18%. By design, I don’t like securities that distribute capital as a distribution.
Question: Why is Westpac trying to raise more capital through their Capital Note No. 5 issue? My understanding was that all banks had raised sufficient capital to cover APRA requirements. Is there a takeover restructure in play?
Answer (By Paul Rickard): This is a hybrid security. While it is part of their tier 1 capital, it is within an allocation reserved for these types of securities. You will find that the Capital Notes 5 issue replaces a maturing security.
No takeover restructure is in play.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.