Capital management and US dollar exposure

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Question: My SMSF has 2,318 shares in Wesfarmers and they have a capital management initiative at the moment. What is the best for me to do regarding this?

Answer (By Paul Rickard): You don’t need to do anything.

You will receive a payment from Wesfarmers of $1.00 per share on 16 December – comprising a return of capital of $0.75 and a $0.25 franked dividend.

At the same time, there will be a consolidation of shares on a 1:0.9827 basis. Your 2,318 old shares will become 2,278 shares.

Question 2: With the current and pending change to the Aussie dollar – what companies dealing in US dollars do you recommend to invest? I am too heavy in mining and banks and I have read your recommendation – to take on companies having US dollar exposure.

Answer (By Paul Rickard): Several of the companies that have strong US dollar earnings/exposure have already moved in response to a weaker Aussie dollar (or expected weaker Aussie dollar), so I am a little wary of recommending these names at the current levels. That said, at the right price, I would be considering names like:

  • CSL, Resmed and Cochlear in healthcare
  • Brambles and potentially Boral in the industrials.
  • Amcor in materials.
  • Possibly Computershare.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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