Strategy
Blue Chip
Australia

ASX Blue Chip Strategy

1 Apr 2020
By
Based on the popular US strategy, ‘The Dogs of the Dow’, this strategy invests in ten high dividend-yielding stocks contained within the ASX 50 index. It is adjusted on an ‘as-needed’ basis, based on a monthly check, to ensure we continue to hold the optimal portfolio.

Latest Update – 01 April 2020

As it now the first trading day of the month, we have checked the Blue-Chip portfolio for the need for a rebalance. One of our stocks held, Medibank Private (MPL) has dropped to No.17 on the list, meaning we need to rebalance the portfolio. Given the sharp price declines over the past month, many stocks now have a gross dividend yield above 10%, so we have made the decision to lift our upper threshold from 10% to 15% for this month, to avoid excluding too many names. 

In terms of action required, five stocks need to be replaced. We recommend members sell their holdings in Suncorp Group (SUN), Vicinity Centres (VCX), Westpac Banking (WBC), Medibank Private (MPL), and S32 (S32). 

The five new stocks to be added to the portfolio include; Stockland (SGP), Woodside Petroleum (WPL), Rio Tinto (RIO), Fortescue Metals group (FMG), and Origin Energy (ORG). 

We have some members who like to know the next five stocks in the list, these are listed below the main table. As a reminder, this strategy is checked for the need to rebalance on the 1st of each month (or the next business day if the 1st is a non-trading day). The portfolio will only be rebalanced when it drifts sufficiently far from the ‘ideal’ portfolio to reduce trading costs and trading activity in this strategy. As a result, the strategy may suit long term investors who wish to perform minimal portfolio management. For specific details of closed trades, please see our historical performance page.

For specific details of closed trades, please see our closed trades page.

For historical trades updates please click here.

Stock codeStock nameQtyEntry dateEntry priceCurrent priceCurrent valueDividendsDividend yieldReturn percentage
AGL
AGL Energy
2102 Sep 19$18.98$17.37$3,647.70$0.478.98%(6.01%)
ANZ
ANZ Bank
1661 Nov 17$30.09$15.77$2,617.82$4.0013.56%(34.30%)
BHP
BHP Group
1482 Mar 20$33.60$31.84$4,712.32$0.6510.39%(3.30%)
CBA
Commonwealth Bank of Australia
641 Nov 17$77.79$60.27$3,857.28$10.6210.01%(8.87%)
FMG
Fortescue Metals Group
5001 Apr 20$10.21$11.31$5,655.00$0.0010.00%10.77%
NAB
National Australia Bank
1521 Nov 17$32.81$15.57$2,366.64$4.6314.95%(38.43%)
ORG
Origin Energy
1,1411 Apr 20$4.55$4.96$5,659.36$0.009.76%9.01%
RIO
Rio Tinto
591 Apr 20$87.84$89.80$5,298.20$0.0010.89%2.23%
SGP
Stockland
1,9761 Apr 20$2.65$2.78$5,493.28$0.0012.21%4.91%
WPL
Woodside Petroleum
2741 Apr 20$18.89$21.27$5,827.98$0.0011.19%12.60%

*Quantities are based on investing $5,000 per stock on the entry date

**Dividend yields are gross

Next Five Top Dividend Stocks

Stock CodeGross Yield
MQG8.57%
MPL8.18%
GPT7.68%
QBE7.46%
AZJ7.19%

ASX Blue Chip Strategy

The Blue Chip strategy has been backtested over 22 years and selects ten of the top 50 Australian stocks. This strategy represents a simple, yet robust, diversification option that has continually outperformed the Australian market. We advise that members buy equal proportions of the ten recommended stocks to hold for the long term. From there, optimisation is only needed upon instruction, which occurs on average four times per year (but can be more or less frequent).

How To Follow This Strategy

Rivkin’s strategies are designed to be as easy as possible for investors to follow. To follow the ASX Blue Chip strategy, investors need to buy the securities in the above table in equal weights. Weights can drift over time as prices move, but we only recommend re-balancing security weights if they stray too far from the target weight (10% per security). The volumes shown in this table are based on a $5,000 investment per stock which produces a $50,000 portfolio.

Every now and then, the list of stocks will be updated in what we call a ‘re-balance’. This means investors will need to look at the new list and sell any stocks that are no longer on the list. After these stocks are sold, the new stocks from the current table can be bought.

About The Strategy

The ASX Blue Chip strategy was developed and launched by Rivkin in 2009 and became one of our best performing strategies in the years following launch. The strategy provides investors with a high dividend yield that also includes franking credits in most cases. Please click here to find out more about the strategy.

View Comments (8)

8
Comments

Troy Jones

G’day guys

How did you get WPL, FMG, RIO, ORG, SGP, ORG at the entry prices listed on the 1/4?

They were the closing prices for the 31/3…..

Cheers

Troy

Oliver Gordon

Good Afternoon Troy,

Apologies, yes the ‘entry prices’ first entered in the table are the closing prices from the day before. However, these have since been updated to reflect the open price on the 1st of April.

Regards, Oliver

Luke Wallyn

RE 2-Mar update: can you please clarify – you write that “one stock has fallen below the 15th rank” then quote two stocks that need to be traded. Also one of the stocks to be bought (VCX) is also listed in the “Next Five Top Dividend Stocks” list, and it’s not the first in the list.
Call me confused, but please clarify whether we are trading one stock or two and is VCX to be traded or is it third in the next five list?? Thanks.

Anonymous User

Hi Luke, Thanks for the message. To clarify, if one of the holdings drops below a ranking of 15 it results in a portfolio rebalance being triggered. At the time of a rebalance, the new list of companies represents the top 10 ranked by dividend yield. This month a rebalance occurred because Wesfarmers Limited (WES) only paid a dividend of 75 cents and consequently its dividend yield dropped significantly, and it fell below a rank of 15. At the same time Woodside Petroleum (WPL) dropped out of the top 10 and so both names were replaced by BHP Group Limited… Read more »

Luke Wallyn

As at 3 Feb: The date-stamp underneath the “ASX Blue Chip Strategy” title has not been updated from 3 Jan 2020 to 3 Feb 2020. The “tile” for this update is therefore still being sorted by the January date stamp.

Wayne Lotherington

The dividend yields stated here vary vastly from those quoted by other similar organisations I subscribe to. Suncorp at 11.58%, for example. The Rivkin figures do not say “Gross Dividend Yield”, although that’s what I suspect they are. Even so, I couldn’t find any other experts suggesting yields as high as the above for these companies. What’s going on, please?

William O'Loughlin

Hi Wayne,
You are correct in that the dividend yields are gross. I have added a note below the table to clarify this.
Regards,
William

David King

Can you please publish the full list of the top 15 dividend stocks?

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