@redbackaClarifying STW.Day-to-Day STW does not track XJO, it...

@redbacka

Clarifying STW.
Day-to-Day STW does not track XJO, it tracks XJT (ASX 200 Total Return Index).
This is because when a company goes ex-dividend, XJO goes "ex-dividend" with it.
STW and XJT on the other hand, accrue the dividend

XJO and STW align at the beginning of each quarter.
Then, as more and more companies go ex-dividend, the gap between XJO and STW widens, and STW moves as per XJT.
This is where we are now:






As you can see, since the start of the quarter, XJT and STW have moved in tandem and have developed a 0.76% gap to XJO.
When STW itself goes ex-dividend at the end of September, it will realign with XJO (which is always ex-div) and the cycle starts anew.
This is what happened this time last year:







It has to be this way.
If it wasnt, all sorts of arbitrage would be available and I would be all over it.

Long story short.
ETF NAV (and hence market price) includes accrued dividends, the underlying Index does not.
When the ETF itself distributes a dividend, ETF and Index momentarily align.
(all this detail is lost if you zoom out sufficiently, e.g. 10 year chart, where it appears that ETF and Index are always in alignment, give or take MER, but thats a story for another day)