The Bank Rotation Income Investors Love

Generally, income investors, if they do anything at all with the banks (other than just hold them all for income), will rotate from CBA back to WBC, ANZ and NAB ahead of their results and dividends (timetable below), and try and time the usual pre-results rally into results (usually a month or so ahead of the results date). Then back to CBA afterwards.

Most income investors are wealthy, not interested in being ‘clever’ by trading banks, but very interested in the cash refund of franking credits, and if they can catch the right timing, they can make (or not lose) a bob whilst they pick up more income plus franking by switching around. That’s the usual process.

So the next part of the process for the Marcus Today Income Portfolio is timing when we lighten up on the CBA and weight more heavily to the others again.

It’s not a process you have to do – it’s just what some people do. Most will just hold them all ‘forever’, or until there is a once-in-a-decade reason to exit to buy back lower down (GFC, Banking sector inquiry, market collapse).

Dates

NAB – FY Results November 6 – Ex-dividend November 11.

WBC – FY Results November 3 – Ex-dividend November 6.

ANZ – FY Results November 10 – Ex-dividend November 13.

MQG (not much of an income stock) – Interims November 7 – Ex-dividend November 17.

BOQ – FY Results October 15 – Ex-dividend October 29.

The Numbers