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MM’s thoughts on the BBOZ ETF?

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MM’s thoughts on the BBOZ ETF?

Hello James and team, Cheers for your tip on WHC. I have nearly sold out now and the results are very pleasing. As you have moved down the risk curve by moving out of well performed mineral stocks and into more defensive stocks I'm considering how to also replicate this approach in my portfolio. Can you give me your thoughts on BBOZ and is it good timing to commence accumulating this stock given the All Ords is nearing a record high? Thanks and regards Rob

Answer

Thanks Rob – glad you had a good win on WHC. We’re out as you know and will be looking to re-establish a position when coal prices find their point of equilibrium – at the moment they are too volatile to make a call on what level this will be.

The BBOZ is not a stock per se, its a leveraged bearish ETF which moves inversely versus the ASX200, in other words if the local index falls 1% the BBOZ should rally on average ~2.46% and of course vice versa. At this stage we are still bullish the ASX200 hence have no interest in the ETF but if we see  a “pop” to new all-time highs, especially on news MM may consider taking a position to hedge part of our portfolio. Watch this space.

 

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BetaShares Australian Equities Strong Bear Hedge Fund (BBOZ)
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