Official interest rates are almost certain to be raised when the Reserve Bank of Australia Board (RBA) meets next week, raising the question: what does that mean for your portfolio?

Canaccord Genuity has just released a research report looking into the sectors which tend to do well, and those that tend to suffer as interest rates increase.

Interest rate increase all but certain

The broking house said in its report that expectations for an interest rate hike had increased sharply over the past few months due to persistently high inflation, exacerbated by rising oil prices due to the conflict in the Middle East.

CG added:

The RBA is now very likely to hike the cash rate by 25bps later this month, and markets are also pricing in one to two further hikes beyond September. While accumulating evidence of a slowing economy may allow the RBA to hold rates after September, the policy outlook is nevertheless materially more restrictive than envisaged this time last year.

The broking house said upward pressure on interest rates, a deteriorating consumer backdrop, a softer housing market and slowing economic growth all presented headwinds for Australian shares from a valuation and earnings perspective.

They added:

These pressures have contributed to a ~5% pullback in the ASX 200 since early August, with outsized declines across the rate-sensitive Retail (-18%) and Real Estate (-13%) sectors, as well as growth sectors such as IT (-14%).

CG said the sectors with the strongest negative correlations with interest rates included real estate, retail and information technology.

CG added:

Recent trading updates have pointed to a softening consumer backdrop, with names such as JB Hi-Fi Ltd (ASX: JBH) reporting negative top-line growth in early FY27. Wesfarmers Ltd (ASX: WES) has also shown a negative correlation with short-term rates, consistent with its exposure to discretionary household spending and its sensitivity to the housing market through its Bunnings franchise.

CG said online classifieds companies such as Seek Ltd (ASX: SEK) and REA Group Ltd (ASX: REA) have in the past shown strong negative correlations with rate increases, which, “partly reflects the degree of cyclicality in their earnings, being tied to job ads and property listings, respectively, as well as the valuation impact of higher long-term yields on growth-orientated companies”.

Infrastructure owners such as Transurban Group Ltd (ASX: TCL) and APA Group Ltd (ASX: APA) were also sensitive to rate increases due to their reliance on debt funding.

Small ray of hope in energy

On the positive side of the ledger, CG said energy stood out as the one sector with a clear positive correlation, “with changes in both short-end rates and longer-term yields over the past three years”.

The post Where to invest as interest rates charge higher appeared first on The Motley Fool Australia.

More reading

• Buy, sell, hold: AMP, Wesfarmers, Woodside shares
• How much is needed in superannuation to target a $95,000 annual passive income?
• Is this ASX 200 share a bargain after crashing to $12?
• How to build a $50,000 passive income from ASX shares
• Buy, hold, sell: Regal Partners, HomeCo Daily Needs REIT, APA Group shares

Motley Fool contributor Cameron England has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group and Transurban Group. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

WiseTech Global Ltd (ASX: WTC) and Xero Ltd (ASX: XRO) are two of the ASX’s most popular technology shares.

Both operate globally, both have large markets still to pursue, and both could look considerably bigger in another five or 10 years.

So, would I be comfortable putting $5,000 into these two ASX tech shares today?

WiseTech Global shares

I think WiseTech could be worth a look after the sharp fall in its share price.

The company is best known for CargoWise, the software platform used by logistics companies to manage increasingly complicated global supply chains.

What I like about this business is how deeply its software can become embedded in a customer’s operations. Moving freight around the world involves customs, warehousing, transport, compliance, and plenty of other moving parts. Once a logistics company is managing those processes through CargoWise, changing systems can be a major undertaking.

WiseTech also has plenty of room to keep expanding what customers do through the platform.

The e2open acquisition has significantly increased the size of the business and gives WiseTech more technology and customer relationships to work with. Successfully bringing everything together could create new opportunities across the global supply chain.

There is certainly uncertainty here. WiseTech still needs to integrate e2open effectively, while investors will want to see that its expected earnings growth actually arrives.

But I think the lower share price leaves plenty of upside if management delivers.

Xero shares

Xero offers a different type of technology opportunity.

Its accounting platform is used by millions of small businesses, accountants, and bookkeepers around the world.

The good news is I think the company still has a long way to grow. There are tens of millions of small businesses across markets such as the United States alone, while Xero had around 4.9 million subscribers globally at the end of FY26.

But it isn’t just about subscriber numbers. Xero can generate more revenue from each business by offering more services around accounting, payroll, payments, and other financial tasks. Its acquisition of Melio should also strengthen its position in payments and help Xero play a bigger role in how small businesses manage their money.

I also think artificial intelligence (AI) could make the platform more valuable over time by automating more of the repetitive work involved in running a small business.

Xero still has to execute well, particularly in the highly competitive US market, but I think the size of the opportunity makes it worth backing.

Would I invest $5,000?

Yes, I would be comfortable putting $5,000 into WiseTech and Xero shares.

WiseTech offers the possibility of a strong recovery if earnings grow as expected and confidence returns, while Xero gives me exposure to a business that is still expanding through a huge global small business market.

The post Should I invest $5,000 into WiseTech and Xero shares? appeared first on The Motley Fool Australia.

More reading

• How to build a $50,000 passive income from ASX shares
• WiseTech shares need more than a rebound. 3 things it must prove first
• WiseTech shares: 3 reasons to buy and 3 reasons to sell
• Could the WiseTech share price reach $50 in 2027?
• Do these ASX technology shares have too much upside to ignore?

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 WiseTech Global and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Hub24 Ltd (ASX: HUB) shares are firmly in the line of fire. The ASX financial stock slipped another 1% on Wednesday to $69.31, extending a rough run that’s seen it fall 9% over the past month, 28% year to date, and a brutal 35% over the past 12 months.

For a stock once treated as an ASX tech darling, that’s a stunning reversal. So what’s actually driving the sell-off?

The real issue: flows are slowing

Here’s the crux of it. Investors are growing nervous about slowing net flows. In FY26, net inflows fell 4% year-on-year to $18.9 billion. That might not sound like a disaster, but for a stock priced for extremely high growth, any hint of deceleration is enough to trigger a serious re-rating.

The market’s question is simple but brutal: can Hub24 keep growing at the pace investors have paid up for? When a stock trades on lofty multiples built around rapid expansion, like Hub24 shares, even a modest slowdown can wipe out a huge chunk of the share price. And that’s exactly what’s playing out here.

Add in a broader wobble across the tech sector with investors reassessing valuations and grappling with how AI could reshape competitive dynamics, and growth stocks like Hub24 have been caught in the crossfire.

Markets tend to sell first and ask questions later, and even high-quality names can get dragged down in a broad de-rating cycle.

The numbers tell a different story

Strip away the flow concerns, and Hub24’s operational performance still looks genuinely strong. FY2026 delivered record results: group underlying EBITDA rose 30% to $211.4 million, underlying NPAT climbed 40% to $137.3 million, and total revenue grew 23% to $501.1 million.

This ASX tech stock continues to benefit from structural growth as more financial advisers adopt its platform. More than 5,200 advisers now use Hub24. One industry trend in particular is working in its favour: “platform monogamy,” where advisers consolidate client assets onto a single provider instead of spreading them across multiple systems.

That shift could help offset some of the flow slowdown as advisers prioritise efficiency, integration and scale.

A hidden growth engine

There’s also a less obvious driver worth watching: operating leverage. Platform businesses like Hub24 often see this play out strongly — once fixed costs are covered, additional funds flowing onto the platform can generate higher incremental margins.

That means earnings growth can outpace revenue growth over time, even if net inflows moderate from their previous blistering pace.

Brokers aren’t buying the pessimism

Analysts, for their part, seem largely unfazed. According to TradingView data, 14 of 18 brokers currently rate Hub24 a buy or strong buy. The average price target sits at $97.81, implying roughly 41% upside from current levels.

The most bullish target stands at $126, while the lowest sits at $71.40, still above today’s price. Citi has a buy rating with a $93.50 target, and RBC Capital sits at $91.00, pointing to roughly 30% upside.

The post Hub24 shares have crashed 35%. What’s actually going on? appeared first on The Motley Fool Australia.

More reading

• Hub24 shares have fallen 27% in 2026. Could they really rebound 38%?
• Netwealth Group vs HUB24: Which financial platform is better from an investor’s perspective?
• 3 ASX shares I think could return 10%+
• 3 ASX 200 shares I’d buy if I couldn’t sell for 10 years
• 4 high conviction ASX stock picks from Canaccord Genuity

Motley Fool contributor Marc Van Dinther 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 Hub24. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.