Day: September 24, 2022

2 excellent ETFs for ASX investors to buy now

ETF spelt out with a rising green arrow.

ETF spelt out with a rising green arrow.

If you’re looking for an easy way to invest in certain themes, then exchange traded funds (ETFs) could be the answer.

But which ETFs should you look at? Listed below are a couple of excellent ETFs that give investors access to exciting investment thematics.

Here’s what you need to know about them:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ASX ETF for investors to consider is the BetaShares Global Cybersecurity ETF. This ETF gives investors exposure to the leading companies in the global cybersecurity sector.

This week the Optus cyberattack outlined just how important cybersecurity is for businesses and consumers. With sensitive information being accessed by hackers, Optus is facing major reputational damage, as well as potential penalties and compensation.

But Optus isn’t alone. This month Rockstar and Uber have also been hit by attacks and you can bet that countless smaller companies have also fallen victim to hackers as well.

In light of this, it wouldn’t be surprising if the already strong and growing demand for cybersecurity services went up a gear.

This bodes well for companies included in the fund such as Accenture, Cloudflare, Crowdstrike, Okta, and Palo Alto Networks.

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

Another ETF for ASX investors to look at is the VanEck Vectors Video Gaming and eSports ETF.

This ETF gives investors access to a portfolio of the largest companies involved in video game development, hardware, and esports.

This is a market that benefits from the billions of gamers globally that reach for their PlayStations, PCs, or mobile devices each day.

According to PwC’s Global Entertainment and Media Outlook, it expects the market to be worth US$321 billion by 2026. This is up from US$214 billion in 2021.

This is good news for the quality companies you’ll be owning with this ETF. This includes Activision Blizzard, AMD, Electronic Arts, Nintendo, Nvidia, Roblox, and Take-Two.

The post 2 excellent ETFs for ASX investors to buy now 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 September 1 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 positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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Some investors think Telstra shares are boring. I beg to differ

A woman smiles widely while using an old fashioned hand set telephone with dial.

A woman smiles widely while using an old fashioned hand set telephone with dial.

If you ask any ASX investor what the most interesting share on the S&P/ASX 200 Index (ASX: XJO) might be, I’d wager that Telstra Corporation Ltd (ASX: TLS) wouldn’t come up. Telstra is one of the bluest blue chip shares on the ASX. But this mature telco might be described as ‘boring’ by many investors.

This is understandable. The Telstra share price has been remarkably stable in recent years. In fact, you could have picked up Telstra shares for a similar price today to way back in early 2018. 

But I still hold Telstra shares. And I don’t plan on getting rid of them any time soon.

Why? Well, it’s not because I think Telstra shares are boring for one. Sure, the telco might be stable, far more stable than many other ASX blue chip shares, for that matter. But I don’t think that makes a company boring. Quite the contrary.

Why I still hold ‘boring’ Telstra shares

The fact is that Telstra is an incredibly dominant company in its sector. It carries a brand that is a relic of a bygone era when Telstra was the government-owned monopolistic provider of almost all telecommunications services in the country. I think this is a good thing, as customers arguably still assign a certain premium to the Telstra brand as a result.

Telstra is by far the market leader when it comes to both mobile and fixed-line internet services in this country. It’s also well-known for having the widest service coverage. Many customers are forced to use Telstra due to a lack of alternatives.

Further, the services that Telstra sells are incredibly inelastic in our modern age. How bad would a recession have to be before customers give up their home internet, phones or mobile data plans?

So we have a highly recession-resistant company that is dominant in its sector. Boring? I don’t think so.

I was fortunate enough to pick up Telstra shares back when the company was trading well under $3 a share. As such, I continue to enjoy a dividend yield of well over 6% on my original capital, plus the franking, of course.

Remember, this is a company that continued to maintain its dividend through the COVID-ravaged years of 2020 and 2021. Telstra then raised its dividend for the first time in years this year as well, further adding to my returns.

So some investors may find this company boring. But I’m certainly not put to sleep by the returns I have had and continue to enjoy from Telstra. I might sell Telstra one day if its share price gets to a silly level. But until then, I will happily sit pretty and watch the dividends keep rolling in.

The post Some investors think Telstra shares are boring. I beg to differ 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 September 1 2022

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Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 Telstra Corporation Limited. 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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Experts say these are the ASX mining shares to buy

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.

If you’re looking to diversify your portfolio with some exposure to the mining sector might, you may want to check out the ASX mining shares listed below.

Both have been tipped as top options in the sector with significant upside potential. Here’s what you need to know about these mining shares:

Iluka Resources Limited (ASX: ILU)

The first ASX mining share for investors to consider is this mineral sands and rare earths miner.

Iluka owns a number of quality projects across South Australia and Western Australia, including the exciting Eneabba project. At Eneabba, the company is developing a fully integrated rare earths refinery, which will be only the third of its kind outside China.

Goldman Sachs is very bullish on Iluka. The broker has the company on its highly regarded conviction list. It explained:

We are positive on ILU’s project pipeline and forecast >40% production growth in mineral sands volumes, c.18ktpa of Rare Earths (~3.5-4ktpa of high value NdPr). We think ILU’s Eneabba RE refinery is a strategic asset considering it will be only the third western world RE refinery

Goldman Sachs has a conviction buy rating and $13.30 price target on Iluka’s shares.

South32 Ltd (ASX: S32)

Another ASX mining share that has been named as a buy is South32.

Morgans is positive on the miner due to the recent transformation of its portfolio to give it exposure to metals that will be important to the decarbonisation megatrend.

The broker believes that this leaves South32 well-placed for the long term and expects attractive dividends along the way. It explained:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX- listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings- linked dividend policy.

Morgans has an add rating and $5.50 price target on South32’s shares.

The post Experts say these are the ASX mining shares to buy 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 September 1 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 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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Broker gives its verdict on the Fortescue share price

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate

The Fortescue Metals Group Limited (ASX: FMG) share price was out of form last week.

The mining giant’s shares lost over 5% of their value to end the period at $16.76.

Investors were selling down the Fortescue share price amid the market volatility and concerns over its decarbonisation plans.

Will the Fortescue share price bounce back?

Opinion remains divided on where the Fortescue share price is heading from here.

As I covered here, analysts at Goldman Sachs see nothing put downside for its shares over the next 12 months.

Whereas the team at Morgans is sitting on the fence right now and feel the miner’s shares are about fair value.

According to a note, the broker has responded to Fortescue’s decarbonisation plans by retaining its hold rating with a modestly increased price target of $17.30. This implies potential upside of 3.2% for investors.

But like Goldman Sachs, Morgans is forecasting a series of big dividend cuts from FY 2024. It has pencilled in a 79.5 US cents per share dividend that year and then 60.8 US cents per share and 37 US cents per share in the following years.

This will mean yields of approximately 6.4%, 4.8%, and 2.9%, respectively.

Morgans highlights that these dividend cuts are being driven by materially lower free cash flow expectations. It commented:

Given the uncertain nature of the spend, with big portions attributed to innovation, there is material risk of FMG’s decarbonisation budget slipping as the scope of work required evolves. FMG has also not baked any inflation assumptions into its capex budget, another realistic source of slippage.

While an adjustment to our assumptions, we expect this guidance to trigger a more material change for consensus – which does not appear to have any decarb capex factored in. We expect peak decarbonisation spend to come at a time of more moderate long-term iron ore prices.

One thing seems certain, FMG will generate materially lower FCF over the next decade versus the previous decade. FMG’s aggressive decarbonisation push, combined no doubt with additional FFI projects, only acts to further increase FMG’s dependence on the iron ore price by materially restricting its FCF profile. Although if FMG can successfully decarbonise it will unlock sustainable and material opex savings while vastly lifting its ESG profile.

The post Broker gives its verdict on the Fortescue share price 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 September 1 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 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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