Day: August 13, 2022

3 top ETFs for ASX investors to buy next week

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it

One investment class that continues to grow in popularity is exchange traded funds (ETFs).

And it isn’t hard to see why. As well as being an easy way to invest your hard-earned money, they provide you with opportunities that were unattainable a decade ago.

But which of the many ETFs would be good options for investors? Listed below are three that are highly rated:

iShares S&P 500 ETF (ASX: IVV)

The first ETF for investors that could be a buy is the iShares S&P 500 ETF. This ETF aims to provide investors with the performance of the famous S&P 500 index, before fees and expenses. Among the 500 shares that you’ll be owning through this ETF include Amazon, Apple, Berkshire Hathaway, JP Morgan, Johnson & Johnson, Meta, Microsoft, and Tesla.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF that could be a buy is the VanEck Vectors Morningstar Wide Moat ETF. This ETF gives investors access to a diversified portfolio of companies that are deemed to be good value and with sustainable competitive advantages. The latter is something that legendary investor Warren Buffett looks for when he seeks investments. And considering his success, following his lead could be a good idea. The fund’s holdings include Adobe, Alphabet (Google), Blackrock, Boeing, Equifax, and Kellogg.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A final ETF that could be a buy is the VanEck Vectors Video Gaming and eSports ETF. This fund gives investors exposure to the growing video game market. This includes companies involved in development, hardware, and esports. Among the companies included in the fund are giants such as graphics processing units company Nvidia, and game developers Activision Blizzard, Electronic Arts, Roblox, and Take-Two.

The post 3 top ETFs for ASX investors to buy next week appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of August 4 2022

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF, VanEck Vectors Morningstar Wide Moat ETF, and iShares Trust – iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This fund manager just named 2 unloved ASX All Ords shares as turnaround buys

two young boys dressed in business suits and wearing spectacles look at each other in rapture with wide open mouths and holding large fans of banknotes with other banknotes, coins and a piggybank on the table in front of them and a bag of cash at the side.

two young boys dressed in business suits and wearing spectacles look at each other in rapture with wide open mouths and holding large fans of banknotes with other banknotes, coins and a piggybank on the table in front of them and a bag of cash at the side.

The leading investors from Wilson Asset Management (WAM) have told investors about two compelling All Ordinaries Index (ASX: XAO), or All Ords, ASX shares on their radar.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

WAM Capital Limited (ASX: WAM) targets “the most compelling undervalued growth opportunities in the Australian market”.

Does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 15.1% per annum since its inception in August 1999. That’s before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 8.2% per annum over the same timeframe.

Here are the two All Ords ASX shares WAM Capital has outlined in its recent monthly update.

AMP Ltd (ASX: AMP)

The fund manager described AMP as a business that’s a provider of superannuation and investment products, financial advice and banking products in Australia and New Zealand.

WAM noted that the AMP share price rose over July 2022, even though it lost the management rights to the AMP Capital Wholesale Office Fund.

The loss of the management rights of this investment vehicle was a “negative outcome” for AMP. However, this was already expected by the market, according to the fund manager.

In explaining its optimistic view on the All Ords ASX share at the current level, WAM said:

We believe the company is undervalued and trading at an attractive discount to its net tangible assets and has the capacity to return a significant amount of capital to shareholders following its divestment program. We remain positive on the outlook for AMP and believe it is currently mispriced in the market after undergoing the sale of its funds management business, Collimate Capital.

Myer Holdings Ltd (ASX: MYR)

WAM pointed out that Myer surprised investors in July with a trading update, revealing full-year earnings guidance that was ahead of market expectations.

The fund manager said that total sales are now expected to grow by between 12.3% and 12.7% compared to FY21. The full year profit is expected to double compared to FY21.

One of the positives from the update, as noted by Wilson Asset Management, was that all categories across Myer’s 58 department stores achieved sales growth. That was despite an environment where consumer confidence is dropping.

Myer has a turnaround plan to keep things driving forwards. The aim is to drive profitability by refurbishing and re-sizing its stores, combined with improving its service standards. WAM says this plan is gathering momentum. The update and turnaround plan reinforced WAM’s positive outlook on the department store ASX All Ords retail share.

The post This fund manager just named 2 unloved ASX All Ords shares as turnaround buys appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of August 4 2022

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Is this ASX 200 BNPL player focused on growth or less risk?

woman using affirm to paywoman using affirm to pay

ASX 200 BNPL shares have had a stellar month but is growth the priority or fewer bad debts?

The Block Inc (ASX: SQ2) share price has surged 26% in the past month. Meanwhile, the Zip Co Ltd (ASX: ZIP) has exploded 146% in a month.

Let’s take a look at what is going on at Block.

How is block performing?

Block (ASX: SQ2) acquired Afterpay in February 2022. Block is also listed on the New York Stock Exchange (NYSE). In the second quarter of 2022, Block reported a 29% increase in gross profit to $1.47 billion.

Afterpay delivered US$5.3 billion of total transactions in the quarter. This was a 13% boost. However, as my Foolish colleague Brooke recently reported, fellow BNPL share Zip delivered a 20% transaction increase in the June quarter.

It appears lowering risk could be a focus for Block. Speaking at a conference call following financial results, Block financial officer Amrita Ahuja highlighted how the company’s consumer repayments are improving. She said:

We continue to see healthy consumer repayment behaviour with 95% of instalments paid on time.

Losses on consumer receivables were 1.02% of Gross Merchandise Value (GMV) during the second quarter, an improvement compared to 1.17% in the first quarter, driven by mix shift, as well as enhancements to our risk models and processes during the first half of the year.

Analysts at Credit Suisse have recently maintained an outperform rating on the block share price with a US$125 price target.

Block share price snapshot

The Block share price has fallen 31% in the past year, nearly 24% more than the S&P/ASX 200 Index (ASX: XJO) benchmark.

Block has a market capitalisation of nearly $4.6 billion based on the current share price.

The post Is this ASX 200 BNPL player focused on growth or less risk? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Block Inc. right now?

Before you consider Block Inc., you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Block Inc. wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

See The 5 Stocks
*Returns as of August 4 2022

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Should investors buy Bendigo Bank shares for dividends?

Woman holding $50 notes and smiling.

Woman holding $50 notes and smiling.

Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are an interesting investment decision when it comes to dividends. It’s not just the big four ASX bank shares that pay large dividends to investors each year.

Many investors may already know about Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares.

But, did you know that the last 12 months of Bendigo Bank dividends amount to 53 cents per share? Translating that into a dividend yield, the trailing grossed-up yield is 7.1%. Not too shabby, right?

Dividend growth is expected

Banks are steadily recovering from the impact of COVID-19 on their financials.

Bendigo Bank is no different. Using the estimates on CMC Markets, the regional bank is expected to grow its profit and dividend per share in FY23.

The forecast for earnings per share (EPS) is 85.5 cents in FY23 and the annual dividend per share is expected to be 56.5 cents per share.

In FY24, the dividend is expected to grow again to 59.8 cents per share.

Now, that level of growth is certainly not shooting the lights out. However, a large starting yield with ongoing growth could be attractive.

The FY23 grossed-up dividend yield is therefore expected to be 7.5% and 8% in FY24.

However, there’s more to the investment question than just the dividends and their yield.

What do analysts think of the Bendigo Bank share price?

The Bendigo Bank share price has delivered outperformance in 2022 compared to the other banks.

In 2022, Bendigo Bank has risen by 15%. That compares to:

A 2.6% fall in the CBA share price in 2022.

The NAB share price has risen 4.6%.

The ANZ share price has fallen by 13.5%.

The Westpac share price went up 4.4%

After this period of outperformance, the broker Macquarie rates Bendigo Bank as underperform due to its valuation with a price target of $10. That implies a drop of the Bendigo Bank share price in the mid-single-digits over the next year. It isn’t sure if the regional bank will be successful with its lofty cost goals.

Credit Suisse is a bit more optimistic about the bank. It thinks that the rising Reserve Bank of Australia (RBA) interest rate will help Bendigo Bank’s net interest margin (NIM) over the next couple of financial years, though higher arrears and bad debts will somewhat impact the benefit of this.

My take on investing in Bendigo Bank shares for dividends

I think that Bendigo Bank is doing the right things to try to grow profit, including growing its loan book and hopefully improving its profit margins in the short-to-medium term.

The expected dividends seem compelling from Bendigo Bank. I’m not sure what the long-term profit growth outlook for the ASX bank share or the wider sector looks like. I suppose it partly depends on what happens with inflation and interest rates.

On income alone, Bendigo Bank could be a decent option. But, I do think there could be some other ASX dividend shares that are able to grow their profit and dividend more over the coming years.

The post Should investors buy Bendigo Bank shares for dividends? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of August 4 2022

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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