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How to avoid investing in overvalued stocks

etf etfs transparency

Avoid investing in overvalued stocks

BetaShares has a new US exchange traded fund (ETF) called the FTSE RAFI US 1000 (ASX: QUS). It selects companies according to fundamentals rather than capitalisation, a strategy designed to avoid overvalued stocks.

The methodology reduces weightings to companies where the market price has increased beyond factors such as sales, book value, dividends and cash flow while increasing weightings to equities where the price has fallen below fundamentals.

The fund follows BetaShares’ Australian fundamental index ETF, the BetaShares FTSE RAFI Australia 200 (QOZ), launched in mid-2013.

Start-ups gain a backer

Targeting start-ups is the aim of a new investment fund for promising Australian businesses run by The Entourage.

The fund invests outside the tech sector, which already has support, says Jack Delosa, founder of The Entourage.

The Entourage Growth Fund’s first investment in the “upstart scene” is specialist recruiter Velocity Consulting, which has had success building two recruitment firms. The fund has $2 million seed capital.

No room for confusion

The SMSF Association is the new name for the SMSF Professionals’ Association of Australia (SPAA). Founded in 2003, the SMSF Association has been around for 12 years and is the main voice for the 1 million trustees of self-managed super funds.

Andrea Slattery, the chief executive of the SMSF Association, says the name SPAA had been sometimes confused with swimming pool suppliers and large tubs of bubbly water.

“For an industry association representing around 1 million SMSF trustees, billions of dollars of assets and thousands of professional advisers, there is no room for confusion,” says Slattery.

Written by Susan Hely

Susan Hely

Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She’s also author of the best-selling book Women and Money.


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