Yield-seekers beware, there are dangers lurking in Australia's dividend exchange-traded funds (ETFs), Goldman Sachs has warned.
Passively managed ETFs are heavily overweight commodity companies, the bank's analysts said, at a time when the stocks -- and the company earnings -- are largely tanking in line with commodities prices.
"Despite cuts of over 50 percent to consensus earnings forecasts for virtually all commodity-related firms over the past year, the passively managed dividend funds we track still have, on average, 25 percent of their ASX exposures in either commodity producers or their supply chain," Goldman said in a note.
"Relative to the ASX 200, this is by far their largest overweight position."
That's a red flag for anyone counting on dividend yields, as the commodity rout has weighed heavily on earnings at resources players.