Day: November 26, 2022

2 popular ETFs for ASX investors to buy next week

ETF spelt out.

ETF spelt out.

Whether you’re looking for tech exposure, access to Asia, or an income boost, there’s probably an exchange traded fund (ETF) out there for you.

Two that are popular with investors and could help you accomplish your investment goals are listed below. Here’s what you need to know about them:

BetaShares S&P 500 Yield Maximiser (ASX: UMAX)

The first ETF to consider right now is the BetaShares S&P 500 Yield Maximiser.

It could be a good option for investors that are searching for a reliable source of income.

That’s because BetaShares has implemented an equity income investment strategy over a portfolio of shares comprising the famous S&P 500 Index on Wall Street. This means you’ll be investing in dividend-paying companies such as Apple, Bank of America, Exxon Mobil, Johnson & Johnson, Microsoft, and Visa.

However, rather than getting the average yield of the S&P 500 index, BetaShares’ equity income investment strategy aims to earn quarterly income that significantly exceeds the dividend yield of the underlying share portfolio over the medium term.

For example, the BetaShares S&P 500 Yield Maximiser’s units are currently providing investors with an 8.8% distribution yield.

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

Another ETF for investors to consider is the VanEck Vectors Video Gaming and eSports ETF.

This ETF could be a good option for investors that are looking for exposure to the tech sector outside the status quo.

That’s because rather than giving you exposure to the FAANG stocks, this ETF gives investors access to a portfolio of the largest companies involved in video game development, eSports, and related hardware and software globally.

This is a very large (and growing) market with billions of active gamers and competitive video gaming audiences of well over half a billion expected in 2023.

This bodes well for companies included in the fund such as graphics processing units (GPU) giant Nvidia and games developers Take-Two Interactive (GTA, Red Dead), Electronic Arts (FIFA, Sims, Apex Legends), and Roblox.

The post 2 popular ETFs for ASX investors to buy next week appeared first on The Motley Fool Australia.

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*Returns as of November 7 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 positions in and has recommended BetaShares S&P500 Yield Maximiser. 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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Brokers name 2 ASX dividend shares to buy next week

Broker looking at the share price on her laptop with green and red points in the background.

Broker looking at the share price on her laptop with green and red points in the background.

Are you looking for ASX dividend shares to buy next week? Listed below are two ASX dividend shares that brokers rate as buys.

Here’s why the analysts are bullish on these dividend shares:

Adairs Ltd (ASX: ADH)

According to a note out of Goldman Sachs, its analysts have a buy rating and $2.65 price target on this furniture and homewares retailer’s shares. Goldman believes that the market is too bearish on Adairs and is overlooking the resilience of its core business. It said:

We view the re-affirmed guidance as a key positive for ADH, and we believe the market is pricing in EBIT that is 11-21% below the guidance range, and 12% below GSe. We view the core Adairs business as resilient in the current environment and do not believe the c.40% discount to discretionary retail peers is justified.

One positive from its share price weakness is that the broker is expecting some big yields in the coming years. Goldman is forecasting fully franked dividends per share of 17 cents in FY 2023 and 20 cents in FY 2024. Based on the latest Adairs share price of $2.25, this will mean yields of 7.6% and 8.9%, respectively.

QBE Insurance Group Ltd (ASX: QBE)

A note out of Morgans reveals that its analysts have retained their add rating and $14.89 price target on this insurance giant’s shares. This followed the release of a disappointing catastrophe claims update last week.

The broker believes that QBE has done relatively well given the very volatile year for weather. In light of this, it remains positive and believes the company is well-placed to benefit from premium increases, rising rates, and cost outs. It commented:

We believe tailwinds such as rising bond yields, premium rate increases and cost out will drive an improved earnings profile for QBE over the next few years. The stock also remains inexpensive trading on ~10x FY23F earnings.

In respect to dividends, the broker is expecting a 42.6 cents per share dividend in FY 2022 and then a 90.3 cents per share dividend in FY 2023. Based on the latest QBE share price of $13.02, this equates to yields of 3.3% and 6.9%, respectively.

The post Brokers name 2 ASX dividend shares to buy next week appeared first on The Motley Fool Australia.

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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 ADAIRS FPO. The Motley Fool Australia has positions in and has recommended ADAIRS FPO. 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 now the time to buy this high-yielding ASX 200 dividend share?

A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.

The S&P/ASX 200 Index (ASX: XJO) share Centuria Industrial REIT (ASX: CIP) has seen a drop in its unit price by around 25% in 2022 to date. This has had the effect of boosting the prospective dividend yield for interested investors.

For readers that don’t know, this real estate investment trust (REIT) is the largest Australian-focused industrial property trust on the ASX.

Why the Centuria Industrial REIT share price has sunk

The key reason for the decline appears to be that interest rates have climbed so much. Warren Buffett once explained why the interest rate can have such a big effect on asset prices:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

The Reserve Bank of Australia (RBA) cash rate target has gone from 0.10% to 2.85%, with the increases starting in May and the latest increase being 25 basis points (0.25%) earlier in November.

Why it could be a good time to buy

The lower Centuria Industrial REIT share price means the FY23 guided distribution now represents a higher yield from the ASX 200 dividend share.

It’s expecting to pay an annual distribution of 16 cents per unit in the current financial year, which equates to a forward distribution yield of 5.1%. The estimated funds from operations (FFO) for FY23, essentially the cash rental profit, is 17 cents per unit. That means it’s retaining a bit of the rental profit.

At the end of the first quarter of FY23, it had a portfolio occupancy rate of 99.6% and a weighted average lease expiry (WALE) of 8.1 years.

While inflation is leading to higher interest rates, it’s also seeing exceptionally strong rental growth. In its FY23 first quarter update, it said that it has seen 18% positive re-leasing spreads, demonstrating “accelerated market rental growth”. That growth figure is on a net rental basis, compared to prior passing rents.

The business also said that it’s “capturing strong tenant demand” through its “new development pipeline within supply-constrained urban infill markets”.

Essentially, interest rate costs are going up, but the rental income is jumping high enough to at least partially compensate.

With its portfolio leased to quality tenants, like Woolworths Group Ltd (ASX: WOW) and Telstra Group Ltd (ASX: TLS), I think the ASX 200 dividend share’s rental income looks resilient.

Centuria Industrial REIT share price snapshot

Over the last month, the REIT has risen by around 10%.

The post Is now the time to buy this high-yielding ASX 200 dividend share? appeared first on The Motley Fool Australia.

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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 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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Own Qantas shares? Guess what the airline is being accused of now

A businessman points a finger in accusation, indicating a share price or ASX company in trouble

A businessman points a finger in accusation, indicating a share price or ASX company in trouble

Qantas Airways Limited (ASX: QAN) shares outperformed the S&P/ASX 200 Index (ASX: XJO) this week, hitting 52-week highs on Wednesday.

Qantas shares closed up 5.3% on the day. This followed an unexpected profit guidance upgrade, which came on the heels of a previous upgrade in early October.

The ASX 200 airline lifted its half-year forecast for underlying profit before tax by $150 million from its October guidance to a new range of $1.35 billion to $1.45 billion.

Part of the profit guidance boost is attributable to a strong rebound in domestic and international travel figures.

Another part, as recent air travellers can likely attest to, is a sharp lift in ticket prices.

Which brings us to the latest accusations being levelled at the flying kangaroo.

What’s this about price gouging?

Qantas shares made The Australian Financial News headlines after Regional Express Holdings Ltd (ASX: REX) deputy chairman John Sharpe said the high price for domestic airfare Qantas is charging represents price gouging.

Sharpe acknowledged the industry-wide impacts of soaring jet fuel costs and multi-decade high inflation levels. “Fuel prices are high and inflation is a problem and impacting us,” he said.

Indeed, Qantas estimates it will spend a record $5 billion fuelling its fleet in the 2023 financial year.

But Sharpe doesn’t believe the elevated prices Qantas is charging domestic passengers aligns with those higher costs.

“It just doesn’t stack up,” he said.

According to Sharpe (quoted by the AFR):

You could literally buy one of our business class airfares for half the price of an economy seat on some Qantas flights – and we’re on exactly the same planes. We operate a 737-800 MG to and from Melbourne. It’s the same plane, the same route and I would say the in-cabin product is as good as theirs…

I don’t think Virgin is gouging people but with Qantas and their prices it would appear that they are gouging.

How have Qantas shares been tracking this year?

Qantas shares have staged a strong rebound in 2022, gaining 18% so far. That compares to a 4% year to date loss posted by the ASX 200.

The post Own Qantas shares? Guess what the airline is being accused of now appeared first on The Motley Fool Australia.

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*Returns as of November 7 2022

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Motley Fool contributor Bernd Struben 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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