Question 1: Peter mentioned the EX20 ETF as a way of investing outside the big companies. Can you explain how this ETF works?
Answer: This ETF from Betashares tracks stocks ranked 21st to 200th in the top 200 stocks. In other words, it excludes the biggest 20 companies and takes its performance from the next 180. If you think the big banks, Wesfarmers and CSL are overvalued, and aren’t keen on the major resource companies, it is an easy way to get exposure to the market through mid and smaller cap stocks. The ETF is from Betashares, trades under the ASX tickler EX20, and has a management fee of 0.25% pa. Due to the absence of the major banks, the sector weight to financials is just 13% compared to the overall weight in the ASX200 of around 31%. The distribution yield on the ETF is also lower, at about 3.1%, which will be franked at around 63%.
Question 2: Cochlear (COH) is hitting all-time highs. Do the brokers see any upside?
Answer: Quite the converse, the brokers feel that Cochlear is way over-priced. According to FN Arena, the consensus target price is $278.35, about 19.3% lower than the last ASX price of $345.01. The range of targets is a low of $256 through to a high of just $300. Of the 6 major brokers who cover the stock, there are two “neutral” recommendations and 4 “sell” recommendations. The brokers have Cochlear trading on a forecast multiple of 57 times current year earnings, and 51 times forecast FY25 earnings! Cochlear is due to report its earnings on 15 August.
Question 3: How can I track the price of the major US tech companies such as NVDIA or Microsoft?
Answer: There are so many ways but let me tell you about how I do it. I have the app from CNBC. It is free, and if you provide login credentials, you can set up watchlists that update in real time. You can also see movements in stocks in the “after-hours” session. There is very comprehensive coverage on all “market moving” events, news, economic statistics, currencies, bonds, commodities etc. I am a big fan.
Question 4: Rio has declared a big fully franked dividend. What is the last date to buy Rio shares to get this dividend?
Answer: Rio is paying a fully franked dividend of US$1.77 per share, approximately A$2.72. The dividend will be paid on 26 September. If you want to buy Rio shares and receive this dividend, you must purchase the stock on or before 14 August. Rio will trade ex-dividend on 15 August. If you are in the dividend re-investment plan (DRP) or want to sign up for this plan, any change to election details must be lodged with the share registry by September 5.
