As we covered here earlier today, there are plenty of exchange traded funds (ETFs) for investors to choose from on the Australian share market.

One of the most popular options out there is the Vanguard Australian Shares Index ETF (ASX: VAS).

It seeks to track the return of the S&P/ASX 300 Index before taking into account fees, expenses, and tax.

This index might not be as closely followed as the illustrious S&P/ASX 200 Index (ASX: XJO), but it isn’t short of quality.

It provides investors with quick and easy access to 300 of the largest companies on the Australian share market.

This means you’ll be buying a diverse group of shares such as mining giant BHP Group Ltd (ASX: BHP), banks like Commonwealth Bank of Australia (ASX: CBA), and retailers including Woolworths Group Ltd (ASX: WOW).

Another positive with the ETF is that it pays investors a quarterly dividend, with an annual yield currently sitting at 4.5%.

Overall, this could make it a great option for a retirement portfolio.

What would it take to generate $30,000 of retirement income?

If you’re in retirement and already have a large lump sum to invest, it would take a rather devilish investment of $666,666 into the ETF to yield $30,000 in dividend income each year at present.

But if you don’t have this level of money available to invest, then you could look at making it a long-term quest.

While past performance is no guarantee of future performance, the share market has historically provided investors with an average total return of 10% per annum.

If it were to do the same over the next 20 years, this ETF followed suit, and you reinvested your dividends, then a $10,000 annual investment would grow into the desired amount a few months after the end of the second decade.

At that point, you can sit back and reap the rewards of your investments. You will also be left with a portfolio that still has the potential to grow at a decent rate even after cashing out your dividends.

The post How I’d generate a $30,000 retirement income from the Vanguard Australian Shares Index ETF appeared first on The Motley Fool Australia.

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More reading

• 2 ASX stocks I’d buy in February for lifelong passive income
• How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year
• ASX shares: Is this my once-in-a-lifetime chance for mega returns?
• How to create a million-dollar ASX share portfolio in two decades
• Buying ASX shares as a beginner? Here are 3 things I wish I’d known

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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Are you a growth investor looking for new investments? Well, the good news is that the ASX growth shares listed below have been tipped as buys.

Here’s why experts rate them highly right now:

Allkem Ltd (ASX: AKE)

If you’re not averse to investing in the resources sector and have a higher than average tolerance for risk, then it could be worth considering Allkem.

It became one of the world’s largest lithium miners after Galaxy Resources and Orocobre merged in 2021. It has assets in Australia, South America, and North America.

And from these projects, Allkem has significant production capacity. In fact, management believes it can increase its production in a manner that allows it to maintain a 10% share of global lithium supply over the long term.

It is partly for this production growth, as well as its downstream optionality, that Goldman Sachs is bullish on Allkem at the same time it is bearish on the lithium industry.

Goldman has a buy rating and $15.50 price target on Allkem’s shares. This implies potential upside of 23% for investors from current levels.

WiseTech Global Ltd (ASX: WTC)

Another ASX growth share that has been tipped as a buy is WiseTech.

It is the technology company behind the industry-leading logistics solutions platform, CargoWise One. This platform allows users to execute complex logistics transactions and manage freight operations.

WiseTech has been growing at a strong rate for years and appears well-placed to continue this trend in the near term. For example, management is guiding to “20%-23% revenue growth and 21%-30% EBITDA growth.”

Morgan Stanley is confident on the company’s outlook. As a result, it has put an overweight rating and $64.00 price target on its shares. This suggests potential upside of almost 18% for investors.

The post 2 highly-rated ASX growth shares to buy according to experts appeared first on The Motley Fool Australia.

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More reading

• 2 explosive ASX growth shares to buy now according to analysts
• Which ASX 200 shares are rebounding fastest in 2023?
• Here are the top 10 ASX 200 shares today
• Happy days! 8 ASX 200 shares smashing new 52-week highs on Thursday
• 3 ASX 200 tech shares going gangbusters on Thursday

Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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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Investors with shares in gold miner Newcrest Mining Ltd (ASX: NCM) had broad smiles on their faces this week after US giant Newmont Corporation (NYSE: NEM) proposed to acquire it.

The Newcrest share price jumped 14% immediately upon the news, although its board has not yet accepted nor rejected the $24 billion offer.

While there is some debate as to whether Newmont should be offering a bit more to Newcrest shareholders, what if eventually a deal is done?

As an all-scrip deal, Newcrest investors will receive Newmont stock upon acquisition.

But what if you don’t want to own US stocks? How do you cash out?

Shaw and Partners portfolio manager James Gerrish, in a Market Matters Q&A, explained how one could do that:

Newmont could do a Resmed

According to Gerrish, Newmont will likely list on the ASX once the acquisition completes. 

“We would assume if Newmont [is] successful, they would create a dual listing structure, so the merged entity would remain listed on the ASX.”

The merged entity could do this by listing in Australia as a chess depository interest, which is a stock that allows investors to simulate owning Newmont shares on the NYSE.

Some current examples of this are US healthcare device maker Resmed CDI (ASX: RMD) and UK banking group Virgin Money UK CDI (ASX: VUK).

Once the CDI is created, it’s easy to cash in.

“Holders could then sell their stock if they wanted to as normal.”

So that’s all well and good for Newcrest shareholders, but what’s in it for Newmont? Why would it go to the expense of listing in a foreign country?

Gerrish explained there is good incentive for overseas businesses to also list on the ASX.

“One of the reasons why they would do this deal is to tap into the funding pool in Australia,” he said.

“So a listing here makes total sense.”

Newcrest shares are up 9% over the past 12 months while paying a dividend yield of 1.6%.

Meanwhile, the Newmont stock price is down 21.4% for the same period while returning a dividend yield of 4.6%. 

The post How do I cash in my Newcrest shares if US giant Newmont takes over? appeared first on The Motley Fool Australia.

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More reading

• Buy NAB and this ASX 200 blue chip share: brokers
• 5 things to watch on the ASX 200 on Friday
• Takeover bid undervalues Newcrest shares: Citi analysts
• Here are the top 10 ASX 200 shares today
• Here’s why analysts rate these blue chip ASX 200 shares as buys

Motley Fool contributor Tony Yoo has positions in ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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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While term deposit rates are improving as the cash rate rises and offer a safe source of income, they will never be the best asset for growing your wealth.

That’s because the returns on offer with term deposits pale in comparison to historical share market returns.

For example, at present, Commonwealth Bank of Australia (ASX: CBA) is offering 3.75% per annum on 12-month term deposits. Whereas the share market has historically provided investors with a 10% per annum return.

And while term deposit rates could still rise a touch more in the coming months if the RBA takes rates higher, I believe they are close to peaking given how inflation is now easing.

Term deposits versus ASX shares

Let’s say we invest $100,000 into a term deposit that yields 4% per annum. In 10 years, you would have grown your investment to $148,000 if you reinvested the proceeds each year.

Whereas, if you generated a 10% per annum return from the share market, your $100,000 investment would have become $259,000 in a decade.

That’s a $100,000+ difference!

And while there are risks to investing in the share market, unlike term deposits, and past performance is not a guarantee of future returns, I believe the risk/reward on offer is compelling enough to choose ASX shares over term deposits.

Buy shares like Warren Buffett

Consider taking the Warren Buffett approach if you choose to invest in ASX shares instead of term deposits.

Over several decades, the Oracle of Omaha has delivered market-beating returns for his company Berkshire Hathaway thanks to his focus on buying high-quality companies with competitive advantages, strong business models, and fair valuations.

The good news is that there’s no shortage of quality in the Australian share market. ASX shares such as Macquarie Group Ltd (ASX: MQG), REA Group Ltd (ASX: REA), and TechnologyOne Ltd (ASX: TNE) tick a lot of these boxes and could be worth further investigation.

Alternatively, the popular VanEck Morningstar Wide Moat ETF (ASX: MOAT) enable investors to buy a collection of Buffett-type stocks through a single investment.

Investing $250 a month in ASX shares or term deposits

You don’t just have to start with a large lump sum of money to grow your wealth Buffett-style.

By investing $250 a month, you have the potential to retire rich if you start early enough.

For example, thanks to compounding, if you were to invest $250 a month for 30 years and average a 10% per annum return, you would grow your wealth to approximately $520,000. Whereas doing the same with term deposits would yield approximately $172,000 at a 4% interest rate.

If you have a longer investment horizon of 40 years, your returns would be $1.4 million and $291,000, respectively, all else equal.

All in all, I believe this demonstrates why ASX shares are the superior option for investors looking to retire rich.

The post Forget term deposits! I’d listen to Warren Buffett and invest $250 a month to try to retire rich appeared first on The Motley Fool Australia.

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More reading

• Top ASX ETFs to buy in February 2023
• Why AGL, New Hope, News Corp, and REA shares are dropping today
• REA share price tumbles on half year earnings miss
• 5 things to watch on the ASX 200 on Friday
• Macquarie has these ASX 200 dividend shares in its income portfolio

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 Berkshire Hathaway. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Berkshire Hathaway, REA Group, Technology One, and VanEck Morningstar Wide Moat 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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