There are a growing number of exchange traded funds (ETFs) for investors to choose from on the Australian share market.

If you’re paralysed with choice, don’t worry. To help you narrow things down, I have picked out three popular ETFs that could be worth researching further. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF is the BetaShares Asia Technology Tigers ETF. It provides investors exposure to many of the best tech stocks in the Asian region. This means you’ll be buying tigers such as ecommerce giant Alibaba, search engine company Baidu, and WeChat owner Tencent.

It has been a tough period for Asian stocks, but with China now reopening and its economy showing signs of rebounding strongly, things could be much better in 2023 and 2024. This could potentially make it an opportune time to invest in this ETF.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF could be another ETF for investors to buy. This popular ETF gives investors exposure to 100 of the largest (non-financial) stocks on Wall Street’s NASDAQ index.

Among its 100 stocks are many of the largest and highest quality companies in the world such as Amazon, Alphabet, Apple, Meta, Microsoft, Netflix, Nvidia, and Tesla. And despite a recent recovery, the ETF is still down meaningfully over the last 12 months. This could make it a good time to consider an investment.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

If you a Warren Buffett fan, then the VanEck Vectors Morningstar Wide Moat ETF could be for you. When the Oracle of Omaha looks for an investment, he has a preference for companies with sustainable competitive advantages (aka moats) and fair valuations. And given how Buffett has generated an average return of almost 20% per annum since 1965, it’s hard to argue against this strategy.

The ETF currently contains approximately 50 companies with these qualities. These include the likes of Alphabet, Boeing, Kellogg Co, Meta, and Walt Disney.

The post 3 excellent ETFs for ASX investors to sink their money into this month appeared first on The Motley Fool Australia.

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More reading

• Is the BetaShares NASDAQ 100 ETF (NDQ) worth buying for dividend income?
• 3 ETFs for smart ASX investors in March
• Here’s how I’d invest in ASX shares today to achieve financial freedom
• Why I’m not investing in ASX index ETFs (yet)
• 3 excellent ETFs for ASX investors to buy in March

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Betashares Capital – Asia Technology Tigers Etf 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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The Australian share market was weak in February, taking back a lot of the gains investors enjoyed in January.

However, the QVG Capital Long Short Fund managed to remain flat.

In fact, the reporting season served as confirmation of its investment beliefs for many of its ASX shares.

Here are three with the best prospects:

‘Market is running out of reasons not to back these guys’

Johns Lyng Group Ltd (ASX: JLG) is the fund’s top holding currently, for good reason.

“Johns Lyng Group reported 88% earnings per share growth and upgraded their full year guidance,” QVG analysts said in a memo to clients.

The share price had been down year-to-date before reporting season and 21% in the red over the past 12 months.

“The stock had been weak leading into the result due to insider selling and a lack of disclosure of performance of their large acquisition, RE,” read the memo.

“This result puts these fears to rest.”

Now with those results and outlook delivered, it’s only upwards and onwards for the insurance repair business.

“The market is running out of reasons not to back these guys!” read the QVG memo.

“The combination of more organic growth and intelligent acquisitions means future earnings per share growth will eventually force the stock higher.”

‘A long runway of growth ahead’

For the QVG fund managers, its investment in Hub24 Ltd (ASX: HUB) has been the perfect demonstration of the power of long-term investing.

“Our first investment in this stock was in 2015 — well before the inception of QVG Capital — at $3.50 with the view that the stock’s earnings would one day justify the expensive valuation,” read the memo.

“The stock now trades at $29 and still has a long runway of growth ahead of it.”

Reporting season continued the investment platform provider’s record of growth.

“The highlight of Hub24’s results was earnings per share growth of 59% despite rising costs,” the QVG memo stated.

“‘Patience’ and ‘the power of compounding free cash flow‘ are the lessons here.”

‘A bull market in sneakers, jeans and accessories’

During a time when most non-mining ASX shares have suffered, Lovisa Holdings Ltd (ASX: LOV) has been a true darling of the market.

Since June, the retail stock has rocketed an incredible 86%.

Reporting season, for the QVG team, indicated Lovisa’s momentum would continue.

“Lovisa delivered a very strong result, beating consensus at revenue and, if you back out the generous incentive package for the CEO, it was a very large beat to operating earnings too.”

The analysts admitted there are worries about consumer spending slowing down for discretionary goods, with nine consecutive months of interest rate rises starting to bite hard.

But perhaps the clientele for budget jewellery doesn’t overlap much with those servicing home loans.

“Housing-related retail is slowing noticeably but those without mortgages are having a great time,” read the memo.

“There still appears to be a bull market in sneakers, jeans and accessories. As shareholders of Lovisa we’re happy The Kids Are Alright.”

The post We still hold this ASX 8-bagger because there’s more to come: QVG appeared first on The Motley Fool Australia.

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More reading

• Passive income watch: Here are the ASX 200 shares that delivered some of the biggest dividend boosts this earnings season
• 3 small-cap ASX shares flying high after reporting season: Elvest
• Top ASX shares to buy in March 2023
• These are my top ASX 200 growth shares to buy today
• 7 more ideas for buying ASX shares this reporting season: expert

Motley Fool contributor Tony Yoo has positions in Johns Lyng Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24, Johns Lyng Group, and Lovisa. The Motley Fool Australia has positions in and has recommended Hub24. The Motley Fool Australia has recommended Johns Lyng Group and Lovisa. 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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There are many ways to measure the performance of a business to analyse whether its ASX shares are worth investing in.

On the “positive” side there are metrics like earnings, revenue, and profit. Then you have to balance those with the negative measures like expenses and liabilities.

But what are the most important numbers to look at?

To answer this, US financial expert and buy-and-hold advocate Brian Feroldi presented two stocks and asked his newsletter readers to choose one to buy.

Would you choose to buy A or B?

Feroldi said that stock A represents a business that has seen its:

• Expenses rise 260% since 2019
• Gross margins contract since 2019
• Price-to-earnings (P/E) ratio is more than 200

The company behind stock B is performing like this:

• Revenue rise 320% since 2019
• Operating margins expanded 14 percentage points since 2019
• Price-to-free-cash-flow ratio is 35

Which of these shares would you invest in?

“We hope the answer is obvious. Stock B would definitely win our money,” said Feroldi.

“Torrid revenue growth means people love what’s offered. Expanding operating margins suggests there’s a moat present and operating leverage is kicking in. And the valuation — while not cheap — looks reasonable given the top-line growth.”

He then revealed that stock B is actually a real company. It’s e-commerce giant MercadoLibre Inc (NASDAQ: MELI).

With the share price rocketing more than 1,200% over the past 10 years, MercadoLibre is a top portfolio holding for Feroldi and his newsletter colleagues Brian Stoffel and Brian Withers.

Context matters when analysing metrics

But there’s a catch to the choice between the two stocks.

It’s that stock A is also MercadoLibre.

Feroldi explained that expenses are up because the MercadoEnvios fulfilment business “costs a lot to build out”. Gross margin is down because the payment arm MarcadoPago is a business driven on volumes rather than fat margins.

“The PE ratio currently looks ‘insane’ mostly because of the accounting differences between earnings and free cash flow.”

This is why choosing metrics to pay attention to when selecting ASX shares to buy is so tricky.

Feroldi suggested investors remember one critical thing when evaluating numbers measuring business performance: context.

“Context matters. We know this to be true in our non-investing lives, but often forget it when it comes to investing,” he said.

“Valuation is part art and part science. If you choose to invest in individual stocks, you need to understand which valuation metrics matter, when they matter, and when they should be ignored.”

The post Which valuation metrics matter most when picking ASX shares? appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Tony Yoo has positions in MercadoLibre. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended MercadoLibre. 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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If you want to become a millionaire, you have a few options. You can save for it, you can invest, or you can win the lottery.

If winning the lottery were easy, I would suggest you take that route. But with the odds stacked firmly against you, it might be more fruitful to take action yourself by saving or investing.

I believe the latter is the better option given the historically stronger returns you generate ahead of savings accounts.

And while there are plenty of things you can invest in, ASX shares lead the way over the long term.

According to Fidelity, Australian shares generated an average total return of 9.55% per annum between December 1991 and December 2022.

This would have turned a single $10,000 investment into approximately $155,000 over the period.

As a comparison, according to Aussie, between December 1991 to December 2021, the housing market had generated 30-year annualised growth for houses and units of 5.6% and 4.7%, respectively. Not shabby, but also not comparable to ASX shares.

But which ASX shares should you buy?

Investors might want to take a leaf out of Warren Buffett’s book when it comes to choosing which ASX shares to buy.

After all, this week the Oracle of Omaha revealed that his Berkshire Hathaway business has delivered a staggering average return of 19.8% per annum since 1965.

Buffett is well-known for taking a long-term approach when making his investments, allowing him to benefit from compounding. He also looks for wonderful companies that are trading at fair prices. These are companies that have strong and enduring competitive advantages and are run by talented management.

How to become a millionaire?

As you saw above, the Australian share market has returned an average of 9.6% per annum over the last 30 years.

While there’s no guarantee that it will do the same over the next 30 years, if it were to do so and you matched the market return, you could grow your portfolio to $1 million by making consistent monthly investments of $500 (or $6,000 a year).

Investors could speed up the process if they can afford to put more into the market each month.

For example, ceteris paribus, an investment of $1,000 per month into ASX shares would grow to $1 million after 23 years. Or go all in with $2,000 per month and you could be a millionaire after 17 years.

Overall, anything is possible if you have a plan and the discipline to stick to it over the long term, just like Buffett has done.

The post How to become a millionaire with ASX shares appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why is the Liontown share price roaring 12% higher today?
• Passive income watch: Here are the ASX 200 shares that delivered some of the biggest dividend boosts this earnings season
• Here are the 3 most heavily traded ASX 200 shares on Friday
• 5 high-profile ASX 200 shares that will trade ex-dividend on Monday

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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