Day: 22 March 2023

If you’re not keen on stock picking in the current environment of heightened volatility, then exchange traded funds (ETFs) could be a good alternative.

That’s because ETFs allow investors to buy large groups of shares through a single investment.

But which ETFs could be worth considering right now? Two quality ETFs that might be considered safe options for investors are listed below. Here’s what you need to know about them:

iShares Global Consumer Staples ETF (ASX: IXI)

The first ETF for investors to look at is the iShares Global Consumer Staples ETF.

As its name indicates, this ETF provides investors access to a large group of consumer staple companies. These companies could be great for investors with a lower risk appetite.

That’s because consumer staples companies provide products that are in demand with consumers whatever happens in the economy. This means they are likely to continue growing through most cycles. They also tend to have strong pricing power, which offers some protection from inflation.

Among the ETF’s holdings are many of the world’s largest global consumer staples companies such as Coca-Cola Company, Nestle, PepsiCo, Procter & Gamble, Unilever, and Walmart.

iShares S&P 500 ETF (ASX: IVV)

Another ETF for investors to look at right now is the iShares S&P 500 ETF.

It is a case of safety in numbers with this ETF. That’s because it gives investors easy access to 500 of the top listed companies in the United States.

This means you’ll be buying a slice of a diverse group of shares from different industries and sectors.

Among its holdings are household names such as Amazon, Apple, Disney, Facebook, JP Morgan, Johnson & Johnson, Microsoft, Tesla, and Visa.

The post 2 safe ETFs for ASX investors to buy amid the market volatility appeared first on The Motley Fool Australia.

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More reading

• 3 reasons not investing at all could be riskier than trying to invest
• Will your investments outpace inflation? The answer is more likely to be ‘yes’ if you choose these assets
• Here’s how I would secure monthly dividends in the 2024 financial year with these ASX stocks
• S&P 500 could rally for next 8 weeks: Wall Street analysts
• I’d invest $20 a week the Warren Buffett way as I aim to build wealth

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 iShares International Equity ETFs – iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended iShares 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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S&P/ASX 200 Index (ASX: XJO) gold stocks have been unusually volatile over the past week and a half.

The big Aussie gold miners are enjoying some outsized gains one day, only to fall sharply the next.

And then repeat the pattern again.

Today, it’s another down day after some sizzling gains on Monday and a mixed performance yesterday.

Here’s how some of the leading ASX 200 gold stocks are tracking in early afternoon trade today:

• Northern Star Resources Ltd (ASX: NST) shares are down 3.7%
• Newcrest Mining Ltd (ASX: NCM) shares are down 1.9%
• Evolution Mining Ltd (ASX: EVN) shares are down 2.8%
• Gold Road Resources Ltd (ASX: GOR) shares are down 4.9%

So, why are ASX 200 gold stocks on a rollercoaster of late?

ASX 200 gold stocks rocked by shifting global sentiment

While a lot of factors impact their performance, the gold miners tend to see their share prices go up and down with any big moves higher or lower in the gold price.

Investor expectations of how bullion will track into the future also play an important role.

The gold price tends to do well amid rising uncertainty and fear, which sees an increase in demand for gold due to its historic haven status.

Gold enjoyed some big price increases amid the banking crisis unfolding in the United States and Europe.

The day before news hit the wires that Silicon Valley Bank was teetering on the brink of collapse, gold was trading for US$1,814 per ounce (on 9 March). That’s 7% below today’s level.

Gold, and ASX 200 gold stocks, also moved higher when the banking crisis spread to Europe, pushing Credit Suisse to the brink.

But good news tends to placate investor fears and pressure the gold price.

Hence, bullion dropped on news that the Federal Reserve is providing billions of dollars in funds to support US banks.

Gold also dropped lower after the Swiss government engineered the UBS takeover of Credit Suisse.

Today, ASX 200 gold stocks are in the red largely because the gold price tumbled 2.0% overnight to US$1,944 per troy ounce.

This comes as optimism is running high that the worst of the European and US banking crises may already be behind us.

The post Why are ASX 200 gold stocks on a rollercoaster lately? appeared first on The Motley Fool Australia.

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More reading

• Why ASX 200 gold shares could see the yellow metal hit new record highs: expert
• 5 things to watch on the ASX 200 on Wednesday
• Why A2 Milk, Accent, Northern Star, and Select Harvests shares are dropping
• ‘Increasing demand’: Expert picks 2 ASX 200 mining shares to buy (not BHP)
• 5 things to watch on the ASX 200 on Tuesday

SVB Financial provides credit and banking services to The Motley Fool. 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 positions in and has recommended SVB Financial. The Motley Fool Australia has recommended SVB Financial. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a decent gain. At the time of writing, the benchmark index is up 1% to 7,022.9 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Latitude Group Holdings Ltd (ASX: LFS)

The Latitude share price is down 6% to $1.13. Investors have been selling this lender’s shares after reporting a cybersecurity incident. This has led to over 300,000 customer documents being accessed, which includes approximately 100,000 copies of driving licences.

Myer Holdings Ltd (ASX: MYR)

The Myer share price is down 9.5% to 91 cents. This has been driven by the department store operator’s shares trading ex-dividend today. Earlier this month, Myer released its interim results and reported the doubling of its profits. This allowed the Myer board to declare total dividends of 8 cents per share. This comprises a fully franked 4 cents per share dividend and a special fully franked 4 cents per share dividend.

Regis Resources Ltd (ASX: RRL)

The Regis Resources share price is down 5.5% to $1.78. Investors have been selling Regis Resources and other ASX gold mining shares today after the spot gold price pulled back. This follows improvements in investor sentiment, which reduced demand for the safe haven asset. In addition, traders may be concerned that the US Federal Reserve will raise rates again tonight.

Service Stream Ltd (ASX: SSM)

The Service Stream share price is down over 2% to 66.5 cents. Like Myer, this has also been driven by its shares going ex-dividend today. Last month, the integrated services provider released its half-year results and declared a fully franked 0.5 cents per share dividend. This will be paid to eligible shareholders on 6 April.

The post Why Latitude, Myer, Regis Resources, and Service Stream shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Latitude shares are back on the ASX, but why are they falling 8% today?
• Why is the Myer share price crashing 10%?
• 4 ASX All Ordinaries shares trading ex-dividend on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

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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Investing in S&P/ASX 200 Index (ASX: XJO) shares?

Then you’re probably as keen as I am to know what the US Federal Reserve is going to announce on interest rates.

The US may be on the opposite side of the world.

But the rate decisions made by the Fed have a major impact on global stocks, including ASX 200 shares.

Should the Federal Open Market Committee (FOMC) opt to raise rates by more than market expectations, share markets will most likely fall.

On the flip side, if the Fed is more dovish than markets have priced in, stocks are likely to broadly rally.

So, what can ASX 200 share investors expect?

ASX 200 shares and the US Fed

Fed chair Jerome Powell will make the much-awaited announcement on Wednesday US time.

That means, unless you’re a night owl, here in Australia we’ll know when we wake up on Thursday. And at market open tomorrow, ASX 200 shares will react to the news.

Before the banking crisis erupted with the collapse of Silicon Valley Bank, analysts were largely expecting a 0.50% interest rate hike from the Fed to combat ongoing high inflation.

Today, almost no one is calling for a 0.50% hike.

According to data from Bloomberg, the market is now pricing in around 80% odds that Powell will announce a 0.25% hike. That will bring the official US interest rate to 5.0%, its highest level in 16 years.

But uncertainty is high.

Among the Wall Street banks, six of eight are expecting a 0.25% hike. Two – Goldman Sachs and Wells Fargo – expect the Fed to pause its tightening path following the past weeks’ retail banking woes.

All told 11 of 98 economists in the Bloomberg survey believe the Fed will pause, 86 expect an increase, and one is pencilling in a 0.25% rate cut. Should that cut eventuate, ASX 200 shares will most likely enjoy a very strong day tomorrow.

What the experts are saying

“This tension is leading to existential angst. Have they gone too far, or not far enough? Both could be true at the same time,” Derek Tang, an economist at LH Meyer/Monetary Policy Analytics said.

“The difficult thing for the FOMC at this meeting will be the tension between bringing down inflation and financial stability risks,” Jonathan Millar, an economist at Barclays added.

And according to Anna Wong, chief US economist at Bloomberg Economics:

There are no easy options. A pause could signal that the Fed is not confident in the resiliency of the banking system or the economy, or sees problems that aren’t yet visible to the market. On the other hand, a hike could add to bank stress and spook investors.

I don’t know about you, but I certainly don’t envy Powell at the moment. He might want to consider wearing a ‘Don’t shoot the messenger’ T-shirt.

As for ASX 200 shares, the odds are strong that we’ll wake up to another 0.25% rate hike from the Fed.

The post Investing in ASX 200 shares? Here’s what to expect from the US Fed tomorrow appeared first on The Motley Fool Australia.

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More reading

• Latitude shares are back on the ASX, but why are they falling 8% today?
• Why I think Wesfarmers shares are a top buy right now
• Is a dividend ETF really better than an ASX index fund for income?
• Goldman ‘remains confident in the health’ of ASX 200 bank shares and names it top pick
• 5 ASX shares I’d buy if there is panic selling

SVB Financial provides credit and banking services to The Motley Fool. 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 positions in and has recommended SVB Financial. The Motley Fool Australia has recommended SVB Financial. 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 ASX is welcoming one of its shares back to trading today. Yes, Latitude Group Holdings Ltd (ASX: LFS) shares are back baby.

The financial services company has been absent for a few days now after a cybersecurity incident. But investors are now once again able to buy and sell Latitude shares on the market.

But it hasn’t exactly been a glorious return. Latitude last traded at $1.20 a share back on Wednesday, 15 March. But upon its trading resumption this morning, this company opened at just $1.01 a share. That’s a fall of 16%.

The company is doing considerably better at the time of writing, sitting at $1.11 per share. But that is still down a meaningful 7.88% on where the company closed at last week:

Let’s check the latest.

Latitude shares return to the ASX following cyberattack

As we covered at the time, this suspension was due to a cyberattack that Latitude suffered last week. Back then, the company told investors that approximately 100,000 customers had had their personal identification documents accessed or stolen.

In response, Latitude requested an immediate trading halt, which was extended until today.

This morning, Lattitude told investors (and customers) the following:

We are continuing our forensic review to determine the full extent of the attack on Latitude and the amount of personal information stolen by the attacker.

While to the best of our knowledge no compromised data has left Latitude’s systems since Thursday 16 March 2023, regrettably our review has uncovered further evidence of large-scale information theft affecting customers (past and present) and applicants across Australia and New Zealand.

Our people are working urgently to identify the total number of customers and applicants affected and the type of personal information that has been stolen. We appreciate how frustrating this latest development will be for our customers and we unreservedly apologise.

So it’s almost certain this incident is behind the big falls in the Latitude share price that we’ve seen today. We saw a similar reaction from the markets after the cyber incident involving Medibank Private Ltd (ASX: MPL) last year.

No doubt investors will be hoping that the company can recover from this attack. But we shall have to wait and see what happens.

At the current Latitude share price, this ASX share has a market capitalisation of $1.12 billion.

The post Latitude shares are back on the ASX, but why are they falling 8% today? appeared first on The Motley Fool Australia.

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More reading

• 2 beaten-up ASX dividend shares I’d buy for long-term income
• Medibank share price edges lower amid $31 million joint venture news
• 2 leading ASX 200 shares to buy that could keep outperforming in 2023: fund manager
• Another ASX All Ords stock has just been halted amid a ‘malicious’ cyber attack. Here’s the latest
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor Sebastian Bowen 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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The Woodside Energy Group Ltd (ASX: WDS) share price is ripping up the ASX 200 charts today.

The oil and gas giant’s shares are up 5.02% to $32.745 in early afternoon trading and headed for their strongest daily gain in almost six months.

Woodside is currently the second-best performing share of the S&P/ASX 200 Index (ASX: XJO) today. Slightly ahead is ASX coal share New Hope Corporation Limited (ASX: NHC).

Woodside shares are rising due to rebounding oil and gas commodity prices.

The energy sector is the best performer of the 11 market sectors today. The S&P/ASX 200 Energy Index (ASX: XEJ) is up 4.1% at the time of writing.

Today’s leap into the green is a welcome change for Woodside investors, who have watched their shares tumble in March.

At the market close yesterday, the Woodside share price was down 13.2% so far this month.

Let’s take a look at what’s happening.

What’s pushing the Woodside share price higher today?

Brent crude futures are currently trading at US$74.98 per barrel.

The West Texas Intermediate (WTI) price is US$69.24 per barrel.

On Monday, Brent oil dropped to its lowest level in a year at US$70.12.

According to analysis from Trading Economics, oil prices are now rising as investors get over recent troubles in the global banking sector.

Top broker Goldman Sachs has a 12-month price outlook of US$94 per barrel for Brent crude futures.

A rebound in Chinese demand following the dumping of its COVID-zero policy is behind the outlook.

Also powering the Woodside share price soar today are rebounding gas prices.

The European benchmark shot up overnight, rising 7.82%, while British gas prices rose by 9.64%.

Oil and gas prices had been falling recently due to warmer Winter weather across Europe.

What is the 52-week high for Woodside shares?

The war in Ukraine has increased commodity prices, resulting in a boon for oil and gas companies.

The Woodside share price hit an eight-year high on 8 November 2022 at $39.58.

Annual general meeting coming up

Woodside has also announced this week it will hold its annual general meeting on 28 April in Perth.

The post Why is the Woodside share price rising at its strongest rate in almost 6 months? appeared first on The Motley Fool Australia.

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More reading

• $72m and counting: ASX 200 director’s massive share buy-up continues
• Why I think these 2 ASX 200 dividend shares offer excellent buying right now
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Guess which ASX 200 director has bought $50m worth of shares in a fortnight?

Motley Fool contributor Bronwyn Allen has positions in Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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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The Wesfarmers Ltd (ASX: WES) share price looks like an appealing long-term buy in my opinion.

Why does the long-term part matter? I think all investing should be done with the long-term in mind, even if the investment gains play out sooner than expected.

I think good investing takes patience. Holding shares for a long time gives us a better chance for a good business to deliver good returns. It gives the business more time to deliver profit compound growth, which may help push the share price higher.

Plus, long-term investing means that investors can receive more dividends, which can be re-invested into more shares.

With the Wesfarmers share price down 25% from August 2021, I think it’s a good time to invest for a few different reasons.

Attractive financials

With the company now priced at a materially lower level, we’re getting the same business for a much better price.

Let’s look at what the current price/earnings (P/E) ratio is. Commsec estimates currently suggest that Wesfarmers could generate $2.16 of earnings per share (EPS) in FY23. This puts the Wesfarmers share price at 23 times FY23’s estimated earnings.

I think that’s a very reasonable valuation considering the high-quality nature of the business.

The company achieved an overall return on equity (ROE) of 32.8% in the first half of FY23. That shows how much profit Wesfarmers generated from the shareholder money that is retained within the business.

Bunnings, the key profit generator of the business, saw a return on capital (ROC) of 70.7%.

These are the types of numbers that I’d want to see from my businesses. It also suggests that Wesfarmers can earn great returns on profit it re-invests within the business.

Growth platforms

I like that Wesfarmers is putting money into areas where it has a large growth opportunity with a long-term growth runway.

The hardware segment is huge, so Bunnings has plenty of growth avenues with commercial customers, tools and other areas. For example, it’s expanding Tool Kit Depot into the east coast of Australia.

Wesfarmers’ expansion into health and beauty with the acquisition of Priceline and Clear Skincare Clinics could turn into a very long-term play. The ASX share has identified spending trends and ageing demographics as two helpful tailwinds.

I think the Wesfarmers chemicals, energy and fertiliser (WesCEF) business is a very compelling segment. In the FY23 first half, WesCEF’s earnings before tax (EBT) increased by 48.6% to $324 million. There is plenty of further growth potential here as it works on getting the Mt Holland lithium mine operational.

Having multiple growth avenues gives the business more compound growth potential, in my opinion.

Commitment to shareholder returns

Wesfarmers says that a key objective is to “provide a satisfactory return to shareholders”.

I like this because I think it guides management’s capital allocations, ensures they don’t take any major risks with the business and look to provide growing cash returns in the form of dividends.

In FY23, Commsec numbers suggest that Wesfarmers is going to pay an annual dividend per share of $1.87. This could translate into a grossed-up dividend yield of 5.4%.

Over the past five years, the Wesfarmers share price has risen by 64%. Past performance is not a reliable indicator of future performance. But, I think it shows that the business is making steady long-term progress, and the market is recognising that.

The post Why I think Wesfarmers shares are a top buy right now appeared first on The Motley Fool Australia.

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More reading

• 2 of the best defensive and safe ASX 200 shares to buy now: broker
• These ASX lithium shares are a buy despite explosive supply forecast: UBS
• Invested $5,000 in Wesfarmers shares 5 years ago? Here’s how much passive income you’ve earned
• Here’s how much I’d need to invest in Wesfarmers shares to generate a $150 monthly income
• Morgans names the best ASX dividend shares to buy now

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 Wesfarmers. 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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ASX index funds are without question the most popular exchange-traded funds (ETFs) on the ASX. As it currently stands, the Vanguard Australian Shares Index ETF (ASX: VAS) is Australian investors’ first choice when it comes to ETFs. And by a country mile too.

There’s a lot to like about ASX index funds like Vanguard’s. Investors get broad diversification, and exposure to some of the country’s best companies, and ASX index ETFs tend to be generous when it comes to dividend distributions too.

But speaking of dividends, the ASX is also home to several ETFs that purely focus on maximising dividend income for their investors.

These ETFs might not be as popular as index funds like the Vanguard Australian Shares ETF. But they still command a significant chunk of the market.

The ASX’s dividend ETFs in focus

For example, the Vanguard Australian Shares High Yield ETF (ASX: VHY) has more than $4 billion in assets under management. Rather than investing in 200 or 300 shares like an index fund would, this ETF holds a far more concentrated portfolio of 73 shares (at its latest count).

It does this to focus on investing only in shares that pay out higher and more sustainable dividends compared to the broader market.

It’s not the only ASX ETF that is built this way either. The ASX also houses the iShares S&P/ASX Dividend Opportunities ETF (ASX: IHD) and the SPDR MSCI Australia Select High Dividend Yield Fund (ASX: SYI), among a few others.

But are these ETFs really a better deal for those investors seeking dividend income? Well, that’s what we’ll be looking at today.

Well, let’s start with the basics. So as of 28 February, the Vanguard Australian Shares ETF has returned 6.47% over the past 12 months, and an average of 8% per annum over the past three years. Over the past five, it has averaged 7.86% per annum.

This ETF has paid out four dividend distributions over the past 12 months, which come to an annual total of $6.36 per unit. That gives the Vanguard Australian Shares ETF a trailing yield of 7.25% on current pricing. This fund charges a management fee of 0.1% per annum.

Let’s compare that to Vanguard’s dividend-focused ETF.

Income or returns?

So Vanguard’s High Yield ETF has returned 11.11% over the 12 months to 28 February. Over the past three years, it has averaged 11.53% per annum, and 8.55% per annum over the past five. This ETF pays out quarterly dividend distributions too.

On current prices, the past 12 months’ total of $4.15 in distributions per unit gives this ETF a trailing yield of 6.26%. This fund charges a management fee of 0.25% per annum.

So, somewhat ironically, we can conclude that the Vanguard Australian Shares ETF offers a higher trailing yield right now than the Vanguard High Yield ETF. However, the High Yield ETF’s overall performance (which assumes reinvested dividends) over one, three, and five years has been superior.

This doesn’t carry over to some of the other dividend-focused ETFs on the ASX though. For example, the iShares Dividend Opportunities ETF has averaged 6.15% per annum over the past three years, and 4.6% per annum over the past five. It charges 0.23% per annum.

In the SPDR High Dividend Yield Fund’s case, the story is different again. This ETF has given its investors a return of 8.08% over the 12 months to 28 February. Over three years, it has averaged 8.7% per annum, and 7.65% over five.

So when it comes to overall performance, Vanguard’s High Yield ETF seems to take the crown over most other ASX income-focused ETFs. That includes Vanguard’s own ASX 300 index fund.

Thus, we can conclude that investors would have been better off investing in this High Yield ETF over any period in recent history. But when it comes to raw dividend payments, Vanguard’s Australian Shares ETF comes out on top. Go figure.

The post Is a dividend ETF really better than an ASX index fund for income? appeared first on The Motley Fool Australia.

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More reading

• Want high income right now? These are the ASX dividend shares I would buy
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Motley Fool contributor Sebastian Bowen has positions in the Vanguard Australian Shares Index ETF. 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 Vanguard Australian Shares High Yield 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 banking sector has been under the pump recently amid concerns over a global banking crisis.

This has seen ASX 200 bank shares such as Commonwealth Bank of Australia (ASX: CBA) pullback meaningfully from recent highs.

Is it time to panic?

The team at Goldman Sachs has been looking at ASX 200 bank shares and remains confident that they are in good health.

The broker highlights that the big four banks have liquidity coverage ratios (LCR) well ahead of requirements and strong capital positions. It commented:

Post Silicon Valley Bank being taken into receivership by the FDIC, we have received an increasing number of queries regarding the resilience of the Australian Banks. We remain confident in the health of the banking sector in Australia given: i) a single, national regulator, with most of the Australian listed banks subject to the Liquidity Coverage Ratio (LCR), ii) balance sheet mix, which sees only a relatively small part of their balance sheets in a marked-to-market environment, iii) Australian bank regulatory capital positions are MTM for the impact of rate rises, and iv) strong capital positions, with fully-loaded CET1 ratios at close to 18%.

One risk to consider

There is one risk that the broker sees for the banks. Though, not one that could send them into receivership.

That risk is increasing competition for deposits. Goldman explained:

For some time we have been highlighting that funding costs remained the key risk to the banks in 2023; a risk that has been further catalysed by the dislocation in global funding markets over the past fortnight. We estimate the Australian banks’ term wholesale funding requirements over the next three years will be one-third higher than the average issuance over the last six years.

To the extent that we expect this to drive greater levels of deposit competition, we note that our weekly product pricing database suggests that term deposit betas have averaged c. 0.75 this cycle, versus the 1.0 we have seen in previous rate cycles, with deposit betas having been as high as 1.2. Our forecasts already assume term deposit betas revert to 1.0 over this cycle, which represents an 11bp headwind to bank NIMs. To the extent this increased to 1.2, it would be an 8bp incremental hit to our NIM forecasts.

Which ASX 200 bank share should you buy?

In light of the above, the broker continues to believe that Westpac Banking Corp (ASX: WBC) is the best ASX 200 bank share to buy right now.

So much so, it has reiterated its conviction buy rating with a $27.74 price target. Goldman concludes:

We reiterate our Buy (on CL) recommendation on WBC given: i) while NIM pressures are accelerating across the sector, WBC’s shorter-duration replicating portfolio, and current balance sheet performance, should see its NIM outperform peers, ii) despite WBC recently revising its FY24E cost target to A$8.6 bn (from A$8.0 bn), the bank’s performance on cost management remains strong in this inflationary environment with a 9% step down in underlying costs expected over the next two years, iii) the stock is trading at a 25% 12-month forward PER discount to peers (historically a 3% discount), and iv) our TP of A$27.74 offers 36% TSR.

The post Goldman ‘remains confident in the health’ of ASX 200 bank shares and names it top pick appeared first on The Motley Fool Australia.

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More reading

• Online trading in these ASX 200 bank stocks is surging. Here’s why
• Buy these ASX 200 dividend shares for income: Goldman Sachs
• 5 things to watch on the ASX 200 on Wednesday
• Which ASX 200 big four bank share could be the safest to hold?
• Want high income right now? These are the ASX dividend shares I would buy

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Westpac Banking. 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 S&P/ASX 200 Index (ASX: XJO) is now barely in the green for 2023, erasing what had been a sensational start to the year for ASX shares.

Accelerated by a barrage of concerning events within the banking industry in recent weeks, many investors are now on their toes. The collapse of Silicon Valley Bank and a takeover of Credit Suisse has called into question whether rapid rate rises are ‘breaking’ the system. More important is whether the fallout can be contained by the intervention of central banks around the world.

All the fear, uncertainty, and doubt are taking their toll on markets. There is a chance fear becomes the prevailing emotion if circumstances worsen, which could prompt some panic selling.

While temporarily painful, such periods of indiscriminate selling can be opportunistic for long-term shareholders.

If opportunity knocks

Two fine ASX financial shares

It appears people are shooting first and asking questions later in the financial sector, with all big four banks in the red over the past month.

If the economic situation were to deteriorate, my guess is a few ASX financial shares could be at risk of irrational selling. However, one company that I’d happily scoop up in a depressed market is Macquarie Group Ltd (ASX: MQG).

The investment bank is diversified across retail banking, asset management, commodity markets, and capital advisory. In my opinion, this makes Macquarie a much more attractive holding than the big four, as its segments smooth out the cyclicality of each individual unit.

Another ASX share I’d jump at amid any panic selling is Netwealth Group Ltd (ASX: NWL). The current valuation is hardly ‘cheap’, though that’s my only real qualm with the company.

Considering it is taking the wealth management platform market by storm, Netwealth is an investment I would comfortably make in a falling market if the fundamentals remain unchanged.

Two quality names in health

The healthcare sector is one I particularly like due to its often defensive nature. Products and services in this industry tend to lean more toward ‘needs’ than ‘wants’ — proving resilient through all parts of the economic cycle.

Two ASX shares I’m eager to buy at lower prices are Pro Medicus Limited (ASX: PME) and Nib Holdings Limited (ASX: NHF). Both companies are intertwined with healthcare in different ways — Pro Medicus from a software angle and Nib Holdings as an insurer.

Additionally, these two businesses have a history of generating solid free cash flows. Hence, I would sleep like a baby holding these companies, even through a tumultuous period of time.

An adventurous ASX retail share

Last but not least is a retailer with an iconic and growing brand — KMD Brands Ltd (ASX: KMD).

If you’re not familiar with KMD Brands, here’s the long and the short of it. The company comprises outdoor clothing brand Kathmandu, surfing and sportswear retailer Rip Curl, and hiking boots brand Oboz.

Although the outdoor clothing market is highly competitive with the likes of Patagonia and The North Face, Kathmandu goes toe-to-toe with these giants locally. As demonstrated by the search volume for jackets locally, Kathmandu is a strong contender.

The ASX retail share is now expanding to Canada and Europe, presenting an opportunity for further growth over the coming years.

Today, KMD Brands revealed it has swung back into profitability in its FY23 first-half results. An increase of 8% in sales across the United States for its Rip Curl brand is evidence of execution.

The post 5 ASX shares I’d buy if there is panic selling appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Forget term deposits and buy these ASX 200 dividend shares: analysts
• Why I’d be happy to invest in these ASX 200 bank shares today
• Turbulence insurance: Fund names 2 ASX 200 shares for long-term riches
• Buy Macquarie and this high yield ASX dividend share: brokers

Motley Fool contributor Mitchell Lawler has positions in Kmd Brands, Macquarie Group, and Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group and Pro Medicus. The Motley Fool Australia has positions in and has recommended Macquarie Group, Netwealth Group, and Pro Medicus. The Motley Fool Australia has recommended NIB Holdings. 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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