Question 1: I have a SMSF and have had some hits and misses. This is because a lot of the trading is based on common sense guesses. I don’t have the expertise or time to research every angle of a trade. I want to move the SMSF to either a strategy like your Growth Portfolio or purely an ETF setup. If I was to base the SMSF on ETFs, what would your recommended splits be?
Answer: In regard to ETFs and structuring a portfolio to meet your needs, it will largely depend on your risk profile and investment objectives. If you are a “growth” investor, the portfolio will look quite different to if you are a “balanced” investor.
Potentially, this is where a financial adviser can help. They will consider issues such as your investment objectives, preparedness to take risk, how many years of negative returns you could sustain, need for income, retirement plans etc.
You can get a could sense of target asset allocations by looking at Vanguard’s “pre-mixed” portfolios of ETFs. For example, they have an ETF called Vanguard Diversified Growth Index (VDGR). It in invests in other Vanguard ETFs/Funds and targets 70% in growth assets and 30% in income assets. Its current weighting is 28% in Australian Shares, 20% in International Shares (unhedged), 12.5% in International Shares (hedged), 5% in International Small caps, 4% in Emerging Markets, 21% in International Fixed Interest and 9% in Australian Fixed Interest.
I am not a huge fan of Vanguard’s pre-mixed ETFs, but you can use their thinking when constructing a portfolio to match your needs.
Question 2: What is your view on Ramsay Health Care (RGC)? Is it likely to recover favour with the market, or are there structural problems? Is it a buy?
Answer: The challenge the market has with Ramsay is that they can’t see a near term catalyst to improve earnings. In Australia, cost inflation and fee pressure from the health insurers is eating away at margins, while their offshore hospital business underwhelm.
The brokers are universally “neutral” on Ramsay. According to FN Arena, all brokers have a neutral recommendation, with a consensus target price of $44.00 (about 14.9% higher than the last ASX price of $38.29). The range of targets is incredibly tight………from a low of $42.00 through to a high of $45.75.
I should point out that even at the current price, Ramsay is not a particularly cheap stock. It is trading on a forecast multiple of about 29 times FY25 earnings and 22 times forecast FY26 earnings.
My take- I am a long term buyer but can’t see an immediate catalyst for the share price.
Question 3: Macquarie (MQG) has risen quite sharply this week in the face of Donald Trump’s re-election. Do the brokers see more upside?
Answer: The major brokers feel that Macquarie is fully priced. According to FN Arena, the consensus target price is $212.42, about 7.9% lower than the last ASX price. There is, however, a broad range of targets. Cit is quite bearish with a target price of just $177.00, while Morgan Stanley is bullish with a target price of $248.00.
Question 4: What is the last day to buy NAB shares and get the next fully franked dividend of 85c?
Answer: National Australia Bank (NAB) will go ‘ex-dividend’ on Tuesday 12 November. Hence, the last day to buy NAB shares and get the dividend is Monday 11 November.
If you want to participate in NAB’s dividend re-investment plan, or change a current election, you must do this by COB on Thursday 14 November. The dividend will be paid on 16 December.
