Question 1: Both BHP and Rio are paying whopper dividends. Do you think they can continue? Why is Rio paying both an ordinary and a special dividend?

Answer: Yes, I think they probably can maintain these sort of dividends over the next few years. Obviously, everything depends on commodity prices, but they are holding up pretty well. Further, there is a pricing lag. Read my article on Switzer Daily today.

With Rio and its special dividend, I guess it is being a bit more conservative saying that the special dividend of US 93 cents (A$1.20) per share is a “one-off” and you shouldn’t count on it next year. The ordinary dividend is US 309 cents (A$3.97) per share. The stock goes ex on 4 March, with payment set to be made on 15 April.

Question 2: Aside from director trades, there are superannuation funds and global funds taking a position in ASX companies. I would like to know the websites where I can glean recent information where fund managers have bought or sold ASX securities, and the total position in an ASX company that fund managers have commenced/increased/decreased?

Answer: You can’t. There is no obligation on any investor to publish their holdings. If they own more than 5% of a listed company, they will lodge a substantial shareholder notice. However, most holdings by fund managers and offshore investors are held in the name of a nominee company (for example, HSBC Nominees, J P Morgan Nominees etc), so even with these notices, you are none the wiser. Some fund managers and super funds will publish a list of their “top 10 holdings’, but apart from this, there is no other public disclosure.

Question 3:  With the termination of the Global Core Infrastructure ETF, I have been looking for a similar fund with the same objectives linked to communication, water and electricity services. I found iShares Global Infrastructure (IGF), but it does not seem to appear on the ASX. Can you suggest any alternatives that are listed on the ASX?

Answer: Here are two. The focus is global (Australia is very small when it comes to an array of infrastructure securities). Magellan Infrastructure Fund (ASX: MICH) – my preference, although it has had a tough last 6 months. It is currency hedged; and Argo Global Listed Infrastructure (ASX: ALI) – it is unhedged.

Question 4: Could you please comment on the suitability of the Vanguard Diversified Conservative Index ETF (ASX: VDCO). Is this a good ETF?.

Answer: VDCO (Vanguard Diversified Conservative Index ETF) is okay for the conservative investor. You are obviously  not a “thrill seeker”. With an allocation of 70% to fixed interest and cash, don’t expect too much of a return. The management fee of  0.27% pa is reasonable. Recent performance has been a little underwhelming with a tracking error between the index and the fund. But over 3 years, it has returned 5.7% pa compared to its benchmark index of 6.05%. The ETF, at about $152 million, is a little on the small size.