Selling the big four banks

I am considering selling some of my big four banks, and five other big-cap high yield shares,  and buying into top 20 and high yielding Australian ETFs.

I am thinking I will get more diversity for capital growth for the same dividend return. Is this strategy a worthwhile option?

Also, I already have exposure to mid-cap shares through a LIC. I cannot find a LIC that just covers top 20 shares – do you know of any?

A: It is good question, thanks.

It is certainly one way you can play the market.

I think if you want broad based exposure, you should consider the majors LICs such as Argo, AFIC, and Milton.

While they are more than just top 20, they are pretty heavily weighted to the top part of the market and put quite a high weighting on owning major cap shares paying fully franked dividends.

Argo and AFIC are trading at horrendous premiums to NTA (particularly Argo) – so I would look at Milton Corporation (which as at 31 October, was trading very close to NTA).


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