What are MM’s thoughts on the “Big Banks”?

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Question asked 08/10/2022

What are MM’s thoughts on the “Big Banks”?

Just re-signed up for a further 4 years. I find MM Broker based commentary very balanced. Looking forward to the site evolving further. My question is not seeking personal advice. What are your thoughts on the big banks? I have had them since 2012. A few buys and sells along the way. Overall, great cash cows as we are retired with a SMSF. I wonder though, does a portfolio need them all, or do you have a general opinion as to which two provides the best overall returns and stability? My returns suggest NAB and CBA. My net return, (capital loss/gain + Dividends) since 2012 look like this: NAB - 21.4k CBA - 18.5k ANZ - 15.5k WBC - 9.6k BOQ - 8.4k

Answer

Hi Geoff,

As you say we offer general advice only.

We like the Australian banks and at present hold Commonwealth Bank (CBA) and Macquarie Group (MQG) but if we were to increase our exposure to the sector further its likely to be via NAB. We prefer to hold our top 2-3 picks as opposed the complete smorgasbord but by definition that comes with concentration risk – our main view at this stage of the cycle is we are comfortable not holding any exposure to the regionals.

The “Big Four” can and usually do experience large swings year to year hence we are happy to lighten / increase our weightings when appropriate e.g. CBA has corrected over 20% over the last year. However as a rule they are highly correlated to the ASX due to their significant market weighting.

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National Australia Bank (NAB)

LAST UPDATED 07/10/2022 12:25

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