Question: Is there any difference in the dividend yield between the ASX 200 ETF products on the ASX? Also is there any risk to your capital with these ETF products if the fund that holds them gets into financial difficulty?

Answer (By Paul Rickard): If the ETF is well managed, the dividend yield should very closely approximate the actual dividend yield of the ASX 200 – so between ETFs trying to do the same thing, there shouldn’t be any difference.

The fund that manages the ETF comes under the supervisory jurisdiction of ASIC. Further, given that it is an unleveraged fund, it shouldn’t get into financial difficulty. If the ETF is investing in vanilla securities like the ASX 200, then I don’t think you should have too many concerns.

Question: I have missed the boat on APN Outdoor (APO) but was wondering what your opinion is of buying OML at current levels and taking advantage of the .83 conversion on merger.

e.g. 2500 OML = $11,625 @ $4.65 which converts to 2075 merged APO shares.

At current price of $5.87, APO 2075 = $12,180

Is this not a saving of $555?

Answer (By Paul Rickard): Thanks for pointing this out. Although there is a small issue to do with dividends, buying OML (oOh!Media) is on paper a cheaper way to own shares in APO (APN Outdoor) than buying shares in APO directly, as under the proposed takeover, OML shareholders will get 0.83 shares in APO for each 1 share in OML they own.

Of course, what you have identified is that the market is starting to factor in that the possibility that the ACCC might block the bid – so that investors who purchase OML might not end up owning shares in APO.

As you are aware, Charlie Aitken is pretty positive on APO (and to some extent on OML), so maybe it is worth taking advantage of this entry approach.

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