SelfWealth SMSF Leaders ETF – Q4 2020 Rebalance

SelfWealth SMSF Leaders ETF – Q4 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. The most-recent quarterly rebalance took place on 21 October, 2020. You can learn more about the reasons why the ETF is rebalanced quarterly in our inaugural quarterly rebalance from January, 2020.

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

 

What has changed as part of the Q4 2020 index rebalance?

Following the quarterly rebalance, the total number of stocks within the ‘SELF’ ETF remains steady from last quarter, sitting at 43.

All constituents have been readjusted to an equal weight of approximately 2.3% of the entire fund. With five stocks removed from the ETF, they were replaced by five new constituents, detailed below.

 

Equities removed
Code Company
AGL AGL Energy
BOQ Bank of Queensland
CGF Challenger
TWE Treasury Wine Estates
VUK Virgin Money UK

 

Equities added
Code Company
CTD Corporate Travel Management
NCM Newcrest Mining
QUB Qube Holdings
SAR Saracen Mineral Holdings
WEB Webjet

 

For the second quarter in a row, the financials sector was impacted the most following the quarterly rebalance. Three of the five shares removed from the ’SELF’ ETF were financials stocks, which meant the sector’s representation has shrunk from an index weight of 27.3% to 20.9%.

Among the changes, Bank of Queensland (ASX: BOQ) and Virgin Money UK (ASX: VUK) both dropped out of the fund following underwhelming performances in the third quarter. The former shed 7.1% of its market cap as pressure mounted following increased impairments for the regional bank. Meanwhile, the latter fell 21.7% as the impact of a second wave of COVID cases across Europe started to weigh on Virgin Money UK.

With financials faltering, however, there were beneficiaries on the other side of the equation. This included a rise in the weight of the consumer discretionary and materials sectors towards the composition of the SelfWealth SMSF Leaders ETF.

Following the addition of two new consumer discretionary stocks in Corporate Travel Management (ASX: CTD) and Webjet (ASX: WEB), the sector now makes up 9.3% of the ETF. Both stocks had a standout quarter, particularly CTD, where the company’s share price soared 83.1%.

Sentiment towards the travel industry improved as most states across Australia started to get on top of managing COVID outbreaks. Adding to the momentum were better-than-expected results from each of the key players in the industry, where liquidity and cash flow surpassed internal forecasts.

 

 

The other key change following the quarterly rebalance is an increase in the number of materials stocks in the ‘SELF’ ETF. There are now eight materials stocks featured in the SelfWealth SMSF Leaders ETF, which is two more than last quarter. Furthermore, the total weight of this sector increased to 18.6% after Newcrest Mining (ASX: NCM) and Saracen Mineral Holdings (ASX: SAR) were added as new constituents.

Ironically, both stocks delivered modest negative returns over the quarter, however, their popularity and prominence across SMSF portfolios is likely due to the desire for gold exposure among shareholders. Gold prices managed to edge higher in the September quarter, while bouts of market volatility may have also sparked the hunt for ‘defensive’ stocks.

Elsewhere, AGL (ASX: AGL) leaving the index means that there is no longer any utilities stocks within the fund. The electricity and gas distributor has slid to its lowest level in almost six years, with sentiment turning against the company after reporting deteriorating profits. With share price troubles of its own, Treasury Wine Estates (ASX: TWE) has also been removed from the SELF ‘ETF’, with the stock’s diminished popularity arising from China’s industry-wide investigation into alleged anti-dumping of Australian wine.

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

 

Sector

Q3 2020

Q4 2020

Number of Stocks

Sector Weight Number of Stocks

Sector Weight

Communication Services

3

7.0% 3

7.0%

Consumer Discretionary

2

4.7% 4

9.3%

Consumer Staples

4

9.3% 3

7.0%

Energy

3

7.0% 3

7.0%

Financials

12

27.9% 9

20.9%

Health Care

5

11.6% 5

11.6%

Industrials

0

0% 1

2.3%

Information Technology

7

16.3% 7

16.3%

Materials

6

14.0% 8

18.6%

Utilities

1

2.3% 0

0%

 


Index Weight by Sector effective 21 October, 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.

 

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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.

 

General Advice Warning 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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