SelfWealth SMSF Leaders ETF: Q3 2020 Rebalance

SelfWealth SMSF Leaders ETF: Q3 2020 Rebalance

Launched in November 2019, the SelfWealth SMSF Leaders Fund (ASX: SELF) is an index-based exchange-traded fund (ETF) that aims to outperform the market benchmark using an innovative construction method based on peer investing..

The ‘SELF’ ETF is typically rebalanced each quarter to reflect shares from the top-performing SMSFs across a pool of thousands of portfolios. You can learn more about the reasons why the ETF is rebalanced quarterly in our inaugural quarterly rebalance from January, 2020.

The March rebalance was cancelled due to significant market volatility, however, the most-recent quarterly rebalance took place on 15 July 2020.

Before making any investment decision, please consult the Product Disclosure Statement (PDS).

 

What has changed as part of the Q3 2020 index rebalance?

The number of shares in the ‘SELF’ ETF has decreased from 56 in the first quarter of 2020 to 43 this quarter. As such, there have been a host of changes to the composition of the ETF.

As at the rebalance date, each constituent has been adjusted to an equal weight of 2.33% of the entire fund. A summary of the changes to the SelfWealth SMSF Leaders Fund Index is illustrated below.

 

Equities removed

Code Company Code Company
ALD Ampol IAG Insurance Australia Group
AMP AMP IFL IOOF Holdings
ASX ASX NCM Newcrest Mining
AWC Alumina ORA Orora
BEN Bendigo & Adelaide Bank ORI Orica
BLD Boral OSH Oil Search
BSL Bluescope Steel OZL Oz Minerals
BXB Brambles PDL Pendal Group
CCL Coca-Cola PPT Perpetual
CPU Computershare QUB Qube Holdings
CSR CSR SGR Star Entertainment Group
CWN Crown Resorts TAH Tabcorp Holdings

 

Equities added

Code Company Code Company
A2M A2 Milk NST Northern Star Resources
ALL Aristocrat Leisure NXT NextDC
ALU Altium REA REA Group
APT Afterpay WTC WiseTech Global
APX Appen XRO Xero
NEA Nearmap

 

Following the most-recent quarterly rebalance, there has been a large increase in the number of technology companies included in the ‘SELF’ ETF. Of the 11 stocks added to the ETF, 7 of them are technology stocks. The representation of the IT sector has grown from an index weight of 1.8% to 16.3%.

Computershare (ASX: CPU) was previously the only technology stock included in the ETF but it has been removed from the ‘SELF’ index. Joining the index, however, are Altium (ASX: ALU), Afterpay (ASX: APT), Appen (ASX: APX), Nearmap (ASX: NEA), NextDC (ASX: NXT), REA Group (ASX: REA), WiseTech Global (ASX: WTC) and Xero (ASX: XRO).

This trend aligns with the market rally during the second quarter of the year, where tech shares helped support a rebound in the ASX following the brutal sell-off in March. In fact, the Information Technology (XIJ) index is above its pre-COVID levels, led by the likes of Afterpay, NextDC and Xero, which have each recorded all-time highs in recent weeks.

Financial sector representation has decreased from 33.9% to 27.9%, with the number of constituents from this sector reducing by 7 to a total of 12. The ‘Big Four’ have retained their positions in the ETF. Meanwhile, the relative underperformance of insurers like Insurance Australia Group (ASX: IAG), as well as investment managers like Perpetual (ASX: PPT), IOOF Holdings (ASX: IFL) and AMP (ASX: AMP), has seen them largely fall out of favour among the most-successful SMSFs.

There are no longer any stocks from the industrials sector within the SelfWealth SMSF Leaders Fund Index, after the departure of Brambles (ASX: BXB) and Qube Holdings (ASX: QUB). Also influencing this outcome was the reclassification of Seek (ASX: SEK) from an industrial stock to a communication services business.

The resilient price of iron ore helped underpin strong share price performances from BHP (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue Metals Group (ASX: FMG), which all remain in the fund. However, the ETF index-weight of the materials sector reduced to 14%. SMSF investors lightened their exposure to construction and building materials suppliers hit by COVID-related lockdowns. This led to the removal of shares like Boral (ASX: BLD), CSR (ASX: CSR), Orica (ASX: ORI) and Bluescope Steel (ASX: BSL).

For the full list of index constituents, please refer to the portfolio holdings.

 

Sector

Q1 2020

Q3 2020

Number of Stocks

Sector Weight Number of Stocks

Sector Weight

Communication Services

1

1.8% 3

7.0%

Consumer Discretionary

4

7.1% 2

4.7%

Consumer Staples

4

7.1% 4

9.3%

Energy

5

8.9% 3

7.0%

Financials

19

33.9% 12

27.9%

Health Care

5

8.9% 5

11.6%

Industrials

3

5.4% 0

0%

Information Technology

1

1.8% 7

16.3%

Materials

13

23.2% 6

14.0%

Utilities

1

1.8% 1

2.3%

 

Index Weight by Sector effective July 15, 2020, the quarterly rebalance date – rounded to 1 decimal

 

How do I follow the NAV and performance of the SelfWealth SMSF Leaders ETF?

For information on the Net Asset Value (NAV) and performance of the index-based ‘SELF’ ETF, please visit etf.selfwealth.com.au. This page is updated daily with the most-recently available information.

 

Is the ‘SELF’ ETF free to buy?

As an exclusive offer for all SelfWealth members, there are no transaction fees to buy units in the SelfWealth SMSF Leaders ETF if you use your SelfWealth trading account to invest in the ETF. You will pay no brokerage fees on a ‘buy’, regardless of the size of your order.

Buying units in the ETF is the same as any other trading order you place, you just need to search for the fund using the ASX ticker code ‘SELF’. Normal brokerage fees will apply if you choose to place a sell order for any units you hold in the SelfWealth SMSF Leaders ETF.

 

For more information, please visit etf.selfwealth.com.au. Alternatively, for any investment questions, please contact sales@selfwealth.com.au

 

SelfWealth Ltd ACN 52 154 324 428 (“SelfWealth”) (Australian Financial Services Licence Number 421789). The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website are of a general nature only and should not be relied upon in place of appropriate professional advice.

 

Disclaimer for the SelfWealth SMSF Leaders ETF

Important Information

The SelfWealth SMSF Leaders ETF (the Fund) is issued by ETFS Management (AUS) Limited, the Responsible Entity of the Fund. (AFSL No 466778). SelfWealth Limited (AFSL No 421789) is the appointed distributor of the Fund. Except for their respective roles with respect to the Fund, ETFS Management (AUS) Limited and SelfWealth Limited are unrelated companies. The PDS for the SelfWealth SMSF Leaders ETF contains all of the details of the offer. Before making any decision to make or hold any investment in the Fund you should consider the PDS in full.

The information provided does not take into account your investment objectives, financial situation or particular needs. You should consider your own investment objectives, financial situation and particular needs before acting upon any information provided and consider seeking advice from a financial advisor if necessary. You should not base an investment decision simply on past performance. Past performance is not an indicator of future performance. Returns are not guaranteed and so the value of an investment may rise or fall.

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