Know your ETF

Posted: June 5, 2015 in Uncategorized

Exchange Traded Fund are all the rage.
They are extremely good, but you need to know what they are.
Yesterday Metcash a high dividend play announced a suspension of dividend.
Metcash is a darling of dividend biased ETF. This means that the ETF will have to sell out of Metcash at their reweight date…which means over 7% of total holding will be sold out in this year!

This is valid for all capitalisation based ETF. In this years of Quantitative Easing the big money went towards big cap shares and made them more expensive…so as QE finishes the big cap will be more under pressure.

With the rise of ETF  studying the next move in index reweight can be a strategy onto its own.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s