AUSE has a 13.2% weight to the materials sector, while EWA’s allocates 18.5% of its weight to that sector.
For now, betting on a pullback in Australian stocks (the S&P/ASX 200 is at highest levels in since June 2008), appears dangerous. The reason: Investors are banking on bank dividend increases from the country’s largest financial services firms.
That could be good news in the near-term for EWA and AUSE, which have weights to the financial services sector of 51.7% and 20.6%, respectively. How much longer Australia’s payout ratio can keep growing without non-mining sectors contributing to economic growth, well, that is anyone’s guess.
iShares MSCI Australia ETF
ETF Trends editorial team contributed to this post.