Investor note: month in review

The S&P/ASX200 closed 2.4 points or 0.04% lower over the week, at 5,862.5.

Since listing, the Switzer Dividend Growth Fund (SWTZ) is up by 2.4%, and while we are helped by our dividend emphasis, it’s nice to see the unit price heading in the right direction.

I suspect we are in for a bit of volatility in the coming weeks and months as US President Donald Trump tries to get his tax changes through Congress. Meanwhile, local economic data could be impactful on what happens to our stock market along with tales of concern about the housing sector.

I think there is a level of hysteria on housing that could be negative for consumer and business confidence and so I’m hoping that the Federal Treasurer, Scott Morrison, makes his mark in the upcoming Federal Budget. Banks are being led by APRA to restrict lending to investors and they are clamping down on interest only loans, but I expect some tweaking of the capital gains discount which could also affect share prices!

There is an old saying “sell in May and go away, come back on St. Leger’s Day” which is in mid-September.

It might take Mr. Trump until then to get his tax plans passed and so we could be in for a few market challenges ahead.

Of course, if he does better than expected and the news from China remains positive, then stocks and SWTZ could keep trending higher. Bell Potter’s Richard Coppleson thinks we will see 6,000 on the ASX 200 index over the next four weeks and over the course of the year, he and others are talking about levels even higher.

I hope they’re right as this would be good news for SWTZ and us!

In today’s video, George Boubouras and I talk about the fund’s performance in March, dividend payments, the outlook for stocks, and more.

Portfolio update from our Investment Adviser

Although still early days, the fund continues to perform well, following a conservative portfolio construction strategy. Since inception, the fund has risen 2.49% against the broader market of 1.84%.

The fund also is preparing to pay its inaugural dividend. The fund is expected to go “ex” on April 12 and the dividend is expected to be paid on April 28. The income to be paid out is from dividends declared and paid over the February reporting season.

Within the portfolio, some stocks which have positively impacted performance have been Iluka Resources as prices are rising for its product suite, Fairfax Media which is subject to takeover rumours and Goodman Group, the industrial property owner and developer.

Strength in the banks stocks also assisted. Some of the larger banks have made “out of cycle” rate increases, which helps earnings growth. Also despite much rhetoric, we expect that banks will handle any extra capital imposts through their dividend reinvestment programs. Therefore, these should be funded relatively easily.

Distribution Policy

A reminder that the ex-distribution dates are expected to be:

  • Thursday, 13 April 2017
  • Friday 14 July 2017
  • Friday, 13 October 2017
  • Friday, 12 January 2018

Details on the value of the April dividend were announced to the ASX today. Click here to read the announcement.

Payment is expected to be made on Friday, 28 April.

Thanks again for your support and if you have any questions please email us at or call us on 1300 794 893.

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