Question 1: What is the smallest number of shares I can buy?
Answer: The ASX has a minimum registration amount of $500. So, if you are investing in a company for the first time, your initial purchase must be at least $500. Once you have a minimum parcel, there are no further restrictions. Potentially, you can buy or sell a single share, so if you want to make a very small top up, the ASX is on your side. Transaction costs (brokerage) might be an issue, however.
Question 2: My wife and I have our own SMSF. We recently came into an inheritance of $500,000 and are interested in putting the maximum non-concessional amount of $110,000 for each of us. At this point in time we’re looking for income vs growth and investing in ETFs might be the way to go. Can you recommend several ETFs we could consider that provide good returns?
Answer: Assuming that you are only considering Australian shares and are thinking of an ETF in its ‘traditional’ sense (a low cost, index tracking, passively managed fund), then I would consider Vanguard’s Australian Shares High Yield Fund (VHY). It tracks the FTSE Australia High Dividend Yield Index which has proven to be a strong performer. The management fee is 0.25% pa. You could also consider actively managed ETFs’ such as the Switzer Dividend Growth Fund (SWTZ). Because they are actively managed, the management fee is higher.
Question 3: Are the brokers bullish on CSL? When does CSL report?
Answer: CSL reports its first half result next Tuesday, 14 February. It has guided to a full year profit of US$2,700m to US$2,800m, with the first half typically bigger than the second half. CSL is likely to provided updated full year guidance when releasing its half year result.
The brokers remain quite bullish on the company. According to FN Arena, there are 5 ‘buy’ recommendations and 1 ‘neutral’ recommendation. The consensus target price is $328.20, about 7.2% higher than the last ASX price of $306.20.
Question 4: Why does the RBA announce interest rate changes on a Tuesday?
Answer: The RBA Board meets on the 1st Tuesday of the month (except in January) and rate changes are announced after the meeting concludes at 2.30pm. Occasionally and usually only in an emergency, the RBA announces rate changes outside scheduled Board meetings.
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.
