Some investments do not need a complicated thesis.

The iShares S&P 500 AUD ETF (ASX: IVV) gives Australian investors access to many of America’s largest companies through a single ASX-listed fund.

For me, that makes it a strong long-term option.

Access to some of the world’s strongest businesses

The IVV ETF tracks the S&P 500 Index, which contains around 500 large US companies, including Apple, Microsoft, Nvidia, Bank Of America, Walmart, Merck & Co, and Verizon.

That gives investors exposure to businesses operating across technology, healthcare, financial services, consumer products, industrials, communication services, and many other areas of the US economy.

I think this is particularly valuable for Australian investors. The ASX has some excellent companies, but our market is heavily influenced by financial and resources businesses. The US market gives investors much greater exposure to areas such as software, semiconductors, digital advertising, medical technology, and global consumer brands.

Many of the companies inside the S&P 500 also generate revenue around the world.

So while the IVV ETF invests in US-listed companies, the underlying businesses can have customers spread across North America, Europe, Asia, and other major markets.

That gives investors exposure to far more than the US economy alone.

The index can evolve over time

Another reason I like the IVV ETF is that ASX investors do not have to predict which companies will dominate the next decade.

The S&P 500 index changes as corporate America changes.

Companies that grow can become increasingly important within the index, while businesses that lose relevance can eventually become smaller holdings or leave the index entirely. For example, today Nvidia is highly important, whereas 50 years ago it was IBM.

I think that is a powerful feature for a long-term investor.

Twenty years from now, some of today’s leading businesses may still be enormous. Others may have been overtaken by companies that are only beginning their growth stories today.

An investor in the IVV ETF does not need to identify those winners in advance.

They can simply continue owning a large collection of leading US businesses as the market develops.

It keeps investing simple

The IVV ETF also suits ASX investors who do not want to spend their spare time reading annual reports and comparing individual companies.

Buying individual shares can be rewarding, but it requires research and comes with the possibility of getting a company-specific decision badly wrong.

With the IVV ETF, one investment spreads money across hundreds of businesses.

That can make it easier to keep contributing through strong markets, weak markets, recessions, and whatever else happens over a long investing career.

For me, this simplicity is one of the fund’s biggest strengths.

A sensible investment strategy that someone can stick with for decades can be far more powerful than a clever strategy they abandon after a difficult year.

There are still risks

The IVV ETF is diversified across hundreds of companies, but it is not immune from large falls.

US shares can become expensive, recessions can hurt corporate earnings, and the index can experience lengthy periods of weak performance.

The largest US companies also account for a meaningful share of the S&P 500 index, so the fund can become quite concentrated at the top.

Australian investors also have currency exposure because the IVV ETF is not hedged back to the Australian dollar. Movements in the Australian dollar against the US dollar can therefore influence returns.

Nevertheless, I would be comfortable accepting those risks with a long enough timeframe.

Foolish takeaway

I think the IVV ETF offers one of the simplest ways for ASX investors to participate in the long-term growth of major global businesses.

There will inevitably be periods when US shares fall out of favour, and I would expect plenty of volatility over the years.

But if I wanted an investment I could keep adding to and potentially hold for decades, the IVV ETF would be high on my list.

The post Why I think the IVV ETF is a strong buy for ASX investors appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor Grace Alvino 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 Apple, International Business Machines, Merck, Microsoft, Nvidia, Walmart, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Verizon Communications. The Motley Fool Australia has recommended Apple, Microsoft, Nvidia, and 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.

Fortescue Ltd (ASX: FMG) remains one of Australia’s largest iron ore producers and a popular choice among resources investors.

But if I had $10,000 ready to invest today, I would be looking closely at what the next few years could bring rather than what the company has delivered in the past.

For now, I would keep my money on the sidelines.

The forecasts have moved the wrong way

Fortescue shares are trading around $17.99, which may initially look tempting after periods of weakness.

The problem for me is the earnings outlook. According to CommSec, consensus earnings per share forecasts have been trimmed this week and now stand at $1.34 in FY27, $1.21 in FY28, and $1.13 in FY29.

That implies earnings could fall by around 16% between FY27 and FY29.

I would be more comfortable buying a cyclical miner when the valuation gives me a greater margin for error or when I can see a stronger earnings outlook developing.

At $17.99, Fortescue trades on a PE ratio of roughly 13 times estimated FY27 earnings. By FY29, that rises to almost 16 times because analysts expect profits to decline.

For a business whose earnings remain heavily influenced by the iron ore price, I do not think that looks particularly compelling.

The dividend outlook is also weakening

Fortescue has historically attracted plenty of attention from income investors because it can distribute substantial amounts of cash when iron ore conditions are favourable.

Current forecasts suggest those payments could move lower over the next few years. Consensus estimates point to dividends per share of 85.8 cents in FY27, falling to 77.6 cents in FY28 and 70.7 cents in FY29.

That is still a meaningful amount of income, but I am more interested in the direction of travel.

If those forecasts prove accurate, both earnings and dividends would be declining at the same time.

That makes it harder for me to get excited about investing $10,000 today, particularly when there are other large miners competing for my money.

I still think Fortescue is a strong miner

My hesitation does not mean I think Fortescue is a poor business.

It has built an enormous iron ore operation in Western Australia and has spent years developing the infrastructure, mining expertise, and export network needed to move huge volumes efficiently.

That scale remains a major strength.

Iron ore demand and prices could also turn out stronger than analysts currently expect. If that happens, the earnings and dividend forecasts could eventually move higher again.

Fortescue is also investing beyond its traditional iron ore operations, although I would want to see those newer opportunities make a more substantial contribution before relying on them in my investment case.

For now, the core business remains closely tied to iron ore, and the consensus numbers suggest the next few years may be challenging.

Hold rather than buy

If I already owned Fortescue shares, I would not necessarily rush to sell them.

The company remains a major producer with valuable assets, and commodity markets can surprise in either direction.

But there is a difference between being willing to continue holding a good mining business and deciding that today is an attractive moment to put another $10,000 into it.

I would want either a cheaper entry point or signs that the earnings outlook is beginning to improve before becoming more positive.

Foolish takeaway

I would not invest $10,000 into Fortescue shares at around $17.99 today.

The company itself still has plenty going for it, but the current forecasts do not give me enough reason to buy. Earnings are expected to decline through FY29, dividends are forecast to follow them lower, and the shares would still be trading at almost 16 times FY29 earnings if those estimates prove accurate.

For me, Fortescue is closer to a hold than a buy right now. I would be happy to keep watching and reconsider if the price or earnings outlook becomes more attractive.

The post Should I invest $10,000 into Fortescue shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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.

ASX stock Cash Converters Ltd (ASX: CCV) has delivered its sixth consecutive annual dividend of 2 cents per share, which, at the current share price, equates to a dividend yield of 6.7%.

But the analyst team at Shaw and Partners believes there is also share price upside from here, with a buy rating on the shares and a bullish share price, which I’ll get to shortly.

First, let’s have a look at Cash Converters’ recently released full-year results.

Profit down in year of transition

The company’s net profit fell 20% year-on-year to $19.7 million, on revenue of $429.2 million, up 11%.

The company’s gross loan book fell 3% to $236.6 million while cash on hand fell 49% to $37.2 million.

Chief Executive Officer Sam Budiselik said FY26 was a year of change for the company.

He added:

We are pleased to report a full-year result reflecting the deliberate execution of our strategic transformation, including exiting payday lending, materially growing the new Cashies Loan book and substantially expanding our corporate store network. While this transformation has created near-term earnings volatility as the composition of the Group’s earnings has changed, we now have a simpler business supported by a broader base of growing retail and international earnings. Following the successful launch of Cashies Loan, the Group has simplified its personal lending offering, improving the customer journey and reducing servicing costs. The Cashies Loan book reflected strong demand closing the year up almost five times at $114.1m ($23.1m at 30 June 2025). The overall quality and composition of the Group’s loan portfolio continued to improve, with the Group Net Loss Rate declining to 11.1%, from 16.0% in FY25. Legacy payday loans now comprise only 2.4% of the Group’s $236.6m total gross loan book.

Mr Budiselik said the company’s store segment delivered strong growth, with operating EBITDA up 49.7% to $46.8 million and same store sales increasing 13%.

The company is also expanding its luxury store concept, with third party AI authentication technology enabling an expansion in the product range.

Shares looking cheap according to broker

Shaw and Partners said in its note to clients that the results were as expected.

They added:

CCV is demonstrating that it can drive synergy and efficiency through corporatisation of its franchised store networks – a key element of our BUY recommendation. Further store acquisitions are signalled for FY27.  

Shaw and Partners said the company was trading well below the valuation levels of its international industry peers.

They have a price target of 41 cents on Cash Converters shares compared to 29.5 cents currently.

Cash Converters is valued at $209.9 million.

The post This high-yield ASX stock could deliver 40% share price gains: Broker appeared first on The Motley Fool Australia.

More reading

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• Why I think the IVV ETF is a strong buy for ASX investors
• Should I invest $10,000 into Fortescue shares?
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Motley Fool contributor Cameron England 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.