Author: therawinformant

The CSL Limited (ASX: CSL) share price is on the move this morning following the release of its research and development (R&D) investor briefing.

At the time of writing, the biotherapeutics company’s shares are down 0.3% to $303.15.

What was in the update?

This morning CSL released a comprehensive update on all its R&D activities. This includes its work across a number of programs to prevent and treat COVID-19 such as UQ/CSL V451 and AZD1222.

UQ/CSL V451 is a recombinant virus spike protein (molecular clamp technology) formulated with MF59 adjuvant under a partnership with the University of Queensland and the Coalition for Epidemic Preparedness Innovations (CEPI). Phase 1 trials are ongoing, with phase 2 and 3 trials expected in December if everything goes to plan.

AZD1222 is an adenovirus vector designed to express spike protein of COVID-19 virus in situ. It has partnered with AstraZeneca on this one. It is currently undergoing phase 3 trials.

What else did CSL talk about?

CSL revealed that its AEGIS-II Phase 3 study of CSL112 (ApoA-1) for the treatment of acute coronary syndrome has now resumed following a COVID-19 related pause.

More than 10,000 people have been enrolled to date. It is aiming to launch the product in 2023-2025.

Management also spoke about the results of its Phase 2 clinical trials of Garadacimab, a treatment in hereditary angioedema (HAE).

It advised that Garadacimab met its primary end points, with a statistically significant reduction in HAE attacks. It also sees opportunities for the therapy in the treatment of fibrotic disease, cardiovascular disease, and inflammatory disease.

Finally, another topic of interest was the aquisition of Clazakizumab (CSL300) earlier this year. It is an anti-interleukin-6 monoclonal antibody being used in the IMAGINE Phase 3 trial for the treatment of chronic active antibody-mediated rejection. This is the leading cause of long-term rejection in kidney transplant recipients.

In June, Goldman Sachs estimated that Clazakizumab, if successful, could generate peak non-risk adjusted sales of US$5.4 billion by FY 2032 and risk adjusted sales of US$1.3 billion.

Based on trials to date, management appears optimistic that the therapy could improve outcomes for transplant recipients.

Foolish Takeaway.

Overall, based on this pipeline, CSL appears well-placed to both save lives and generate strong returns for investors over the 2020s.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• What happened to the Mesoblast Limited (ASX:MSB) share price?
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 3 ASX shares to hold forever
• 3 core holdings for a $100,000 ASX portfolio

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

We’re diving into earnings season, and Netflix (NASDAQ: NFLX) is one of the early arrivals with its third-quarter financial report on Tuesday afternoon. The leading premium video service is riding high. The shares enter the new trading week with a 64% year-to-date gain. 

There have been moments of mortality on the way up. Netflix stock declined 6.5% the day after it posted results for its second quarter, so investors know that volatility is the norm during earnings season. Expectations are high leading into this week’s report. Let’s take a closer look at Netflix and what it will have to prove to Wall Street if it can keep the upticks coming.

Binge investing pays off

We know what Netflix was expecting to do in the third quarter. Three months ago it was targeting $6.327 billion in revenue for the quarter, 20.6% more than it delivered a year earlier. The bottom line is growing even faster, as the $2.07 a share profit that Netflix was modeling in mid-July is 42.2% ahead of where it landed in the third quarter of last year. 

It’s not a surprise to see Netflix booming. We’re spending more time at home, and no one is spending as much as Netflix on content to keep its subscribers well-stocked with binge-worthy entertainment. Its summertime outlook calls for 195.45 million paying streaming members worldwide, a 23.4% increase over the past year.

Analysts aren’t tethered to what Netflix saw in its crystal ball three months ago. The consensus Wall Street estimate calls for $2.13 a share in earnings on $6.38 billion in revenue. They clearly think that the fundamentals have inched higher in recent months, but Netflix historically putting out conservative guidance probably steers analysts to aim higher. 

There are a few reasons to get excited with Netflix reporting shortly after Tuesday’s market close. It has quietly ended the free trials it offers US subscribers, something that it wasn’t likely to do if it was struggling in attracting new members. It doesn’t seem to be in a hurry to increase domestic prices – especially after the hit it took on the subscriber front the last time it pushed out a hike – but anything it can do to keep its subscriber base close and growing in these competitive times is a positive achievement. 

Despite trouncing the market in 2020, the shares are actually marching in place in recent months. The stock is trading a mere 0.6% higher than it was the day it announced second-quarter results three months ago. A strong report – especially after the market’s uninspiring reaction last time out – would result in a healthy bounce on Wednesday. We’re not talking about a short squeeze, as short positions have actually been sliding steadily since peaking in December. However, another beat coupled with encouraging guidance to close out the final quarter of 2020 and the stock could be off to the races again. 

Netflix would have to climb 22% in the remainder of this year to double in 2020, and that’s certainly possible with a blowout performance this week. Netflix has been one of the market’s hottest stocks over the past decade, but doubling in a single year is something that the shares haven’t done since 2015. Netflix stock nearly quadrupled in 2013. The stage is set for Netflix to do something that it hasn’t done in five years, but it’s best chance to make it happen is now just a trading day away.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• How this fund manager’s 60% UP in the year of COVID-19
• Analyst: Netflix Inc (NASDAQ:NFLX) will surge 21% to $670 due to a ‘dramatically changing world’
• 3 ASX tech shares that pay dividends
• 3 things you’ll want to know when Netflix announces earnings
• Netflix will surge 28% to $650, according to this analyst

Rick Munarriz owns shares of Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The S&P/ASX 200 Index (ASX: XJO) has finally moved out of its COVID-19 induced trading range to hit a 7-month high. Let’s take a look at the shares that have been able to ride the momentum of the broader market to hit fresh record all-time highs this week. 

ASX shares that hit record all-time highs

1. Adairs Ltd (ASX: ADH)

The Adairs share price has been on a tear since its March lows, hitting a fresh record all-time high of $4.24 on Monday. The business has experienced strong sales amidst the COVID-19 pandemic, driven by a 61.4% increase in online sales in FY20. The company’s ticking all the right boxes with growing revenues, the earnings accretive acquisition of home furniture supplier ‘Mocka’ and reducing its outstanding debt. 

2. Dicker Data Ltd (ASX: DDR) 

Dicker Data is a wholesale distributor of computer hardware, software and related products.  The business has experienced a rapid increase in demand for remote and virtual working solutions across its hardware, software and cloud portfolios. While the relaxation of lockdown measures has positioned Dicker Data to support businesses with their return to work strategies and business continuity plans in a post COVID-19 environment. Furthermore, over the next 12-24 months, the rollout of 5G connectivity is going to have a revolutionary effect within the technology industry. This is a tremendous opportunity for Dicker Data to continue assisting and supporting customers through this ongoing wave of digital transformation. These business tailwinds have helped prop up the Dicker Data share price to a fresh all-time record high of $9.05 on Monday. 

3. Nextdc Ltd (ASX: NXT) 

The NextDC share price has more than doubled this year following the bullish sentiment for the tech industry. The company has been able to continue to deliver on market expectations with its FY20 results coming in at the top end of earnings guidance provided at the start of the financial year. A flurry of development activity continues for the business to expand its capacity across Australia. Its shares are a record all-time high of $13.70 this week. 

4. Hub24 Ltd (ASX: HUB) 

The investment and superannuation portfolio administrator has seen record growth in its Funds Under Administration (FUA) with record inflows for its September quarter. The quarter experienced inflows of $1.36 billion (up 10% on pcp) and total FUA of $19 billion (up 32% on pcp). According to the latest available Strategic Insights data for the Australian platform market, Hub24 has maintained 2nd place ranking for both quarterly and annual net inflows. Its market share has increased to 2.1% from 1.5% at June 2019. 

5. Kogan.com Ltd (ASX: KGN) 

Kogan arguably has the most vertical share price chart of them all. This really begs the question, when will Kogan stop setting new all-time record highs every month? Its share price beat its previous record high set in August to hit the $25 mark for the first time this week. The business continues to go from strength to strength with its most recent September business update highlighting triple digit growth in sales and profits. 

More reading

• 2 of the best ASX dividend shares you can buy in October
• ASX 200 rises 1%, Cimic (ASX:CIM) up 8% on sale
• Dicker Data (ASX:DDR) share price reaches all-time high. Here’s why
• Why Dicker Data, South32, Tyro, and Uniti shares are pushing higher today
• New $259 million ASX tech player listing Thursday

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd and Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended ADAIRS FPO, Hub24 Ltd, and Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 last few months have been strong for ASX 200 shares. The S&P/ASX 200 Index (ASX: XJO) has surged to a 100-day high of 6,229.40 points as at yesterday’s close. That’s good news for those in the market but what does it mean for those looking to buy?

Why ASX 200 shares are at a 100-day high

The interesting thing right now is there are a few different factors bubbling away in the background. The coronavirus pandemic continues to dominate investor sentiment while monetary and fiscal policy are starting to come to the fore.

Yesterday, the benchmark Aussie index jumped 0.85% or 52.60 points higher thanks to easing Victorian restrictions. Less restrictions is good for the economy and that saw a number of ASX 200 shares like Commonwealth Bank of Australia (ASX: CBA) surge higher.

I think hitting a 100-day high is the good news investors need right now. The March bear market seems like an age ago with strong stimulus and monetary policy measures helping to keep the economy afloat.

The Federal Budget announced in recent weeks also contained some good news for business. That’s especially the case for major infrastructure shares like Lendlease Group (ASX: LLC) given the $10 billion spending boost in the sector.

Similarly, shares like SEEK Limited (ASX: SEK) have been charging higher thanks to big efforts to reduce unemployment.

We’re also starting to see more initial public offerings (IPO) and M&A (merger and acquisition) activity increasing which could be a good signal for the current state of the share market.

All of these factors have helped to push ASX 200 shares to a new 100-day high and momentum could be a key factor heading into the end of the year.

Foolish takeaway

ASX 200 shares are charging higher and that could mean now is a time to buy. I still think the idea of a ‘two-speed’ economy rings true.

That means now is the time to think long-term but buy with short-term policy triggers and potential winners in mind.

More reading

• Why the Silver Lake (ASX:SLR) share price is one to watch today
• 5 things to watch on the ASX 200 on Tuesday
• 3 high quality blue chip ASX shares to buy now
• ASX 200 rises 1%, Cimic (ASX:CIM) up 8% on sale
• Are ANZ (ASX:ANZ) shares a buy for dividend income today?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Afterpay Ltd (ASX: APT) share price could be on the move today after signing a partnership with banking giant Westpac Banking Corp (ASX: WBC).

What has been announced?

This morning Afterpay revealed that it has entered into a collaboration agreement to facilitate the introduction of Afterpay savings accounts and cash flow tools for customers in Australia.

According to the release, the new money management services will be facilitated by Westpac’s new digital bank-as-a-service platform.

The partnership will allow Afterpay to provide Westpac transaction and savings accounts and other cashflow management tools to its 3.3 million customers in Australia from the second quarter of 2021.

Afterpay expects the service to empower customers to have greater control over their budget, with an efficient and seamless digital user experience.

The company also notes that the collaboration brings efficiency benefits to its existing activities from a risk management and processing cost perspective. In addition, it has the potential to facilitate new revenue streams over time, without needing to develop traditional banking or credit products.

“Global opportunity.”

Afterpay’s CEO, Anthony Eisen, commented: “We believe Australians deserve greater support and insight to help manage their money. Together with the power of our retail platform, the latest banking technology from 10x, and the support of Westpac, we will begin by offering cashflow management in a simple way.”

“Afterpay is in a unique position to extend and deepen the relationship with our customers and help them to manage their money more seamlessly through savings and budgeting tools. For Afterpay, this is clearly just the beginning as we explore this opportunity globally,” he said.

This positive sentiment was echoed by Westpac’s CEO, Peter King.

He said: “We are very pleased to be able to offer our digital bank-as-a-service platform to one of Australia’s most prolific fintech innovations, Afterpay. This collaboration reflects our strategy to meet the changing needs of customers and demonstrates our desire to partner with differentiated business models that provide alternative ways for consumers to spend and manage their finances.”

“We look forward to launching our platform in Q2 with Afterpay and will continue to work together to identify ways in which our partnership can add further value to consumers,” he added.

In other news.

This isn’t the only industry news this morning. Rival Zip Co Ltd (ASX: Z1P) has just announced plans to launch a “Tap & Zip”  option on Visa terminals.

It notes that just 13% of stores in Australia are able to accept buy now, pay later options. Management feels Tap & Zip addresses this significant and untapped customer need.

More reading

• Brokers believe these record high ASX stocks can run higher
• Are ANZ (ASX:ANZ) shares a buy for dividend income today?
• Brainchip (ASX:BRN) share price jumps on quarterly update
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• Will you regret calling the Afterpay Ltd (ASX: APT) share price too expensive? 

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Silver Lake Resources Limited. (ASX: SLR) share price has been surging higher in 2020, climbing 76.1% higher to $2.36 per share. The $2.1 billion gold producer has benefitted from higher gold prices alongside its fellow ASX-listed peers.

But there’s a big reason to watch the ASX gold share in early trade this morning: the company’s latest annual report.

Why is the Silver Lake share price worth watching?

Late yesterday, Silver Lake released its annual report for the year ended 30 June 2020 (FY20). The mid-tier ASX gold miner reported multiple records across key operational and financial metrics for the year.

Gold production jumped 64% compared to FY19 for a total of 273,071 gold equivalent ounces, with gold equivalent sales up 54% to 263,362 ounces. The group’s all-in sustaining cost (AISC) came in at $1,295 per ounce, below initial guidance of $1,300 to $1,350 per ounce.

Sales guidance was twice upgraded during FY20 and Silver Lake has now delivered 6 straight years of meeting or exceeding guidance.

Underlying net profit after tax (NPAT) surging 3,852% to $257 million while operating cash flow jumped 250% to $252 million. Year-end cash and bullion increased by $139 million to $269 million while Silver Lake remained debt-free.

The Silver Lake share price has performed strongly in 2020 and there was more to like about the latest update. Management expects strong momentum into FY21 with guidance of 240,000 to 250,000 ounces at an average AISC of $1,400 to $1,500 per ounce.

The group’s diluted earnings per share came in at 31 cents per share, which means the Silver Lake share price traded at an equivalent price to earnings (P/E) ratio of 7.61 at yesterday’s close.

Foolish takeaway

FY20 was clearly a strong year for the Aussie gold miner thanks to strategic acquisitions and favourable gold prices. That has seen the Silver Lake share price outperform the S&P/ASX 200 Index (ASX: XJO) and many of its peers.

The question for investors is how much of that growth and production is already priced in.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 rises 1%, Cimic (ASX:CIM) up 8% on sale
• How these 3 letters could see your ASX shares outshine
• Brainchip (ASX:BRN) share price jumps on quarterly update
• How I’d position my ASX share portfolio for the next market crash

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 BHP Group Ltd (ASX: BHP) share price will be on watch today following the release of its first quarter update.

How did BHP perform in the first quarter?

According to the release, BHP has started the new financial year in a positive fashion.

For the three months ended 30 September, the Big Australian achieved Iron Ore production of 66.04 Mt. While this represents a 1% quarter on quarter decline, it was up 7% on the prior corresponding period.

Management notes that record quarterly production at Jimblebar and strong supply chain performance offset the impact from planned major car dumper maintenance.

BHP’s Petroleum production grew quarter on quarter to by 1% to 27 MMboe. This was driven by the first production from Atlantis Phase 3 and higher seasonal demand at Bass Strait, which was partially offset by lower volumes at Shenzi due to planned maintenance, the impact of Tropical Storm Laura in the Gulf of Mexico, and weather impacts at North West Shelf.

This production was stronger than some analysts were expecting. For example, a note out of Goldman Sachs reveals that it was forecasting production of 26Mboe.

Also coming in ahead of expectations was BHP’s Copper production. It delivered quarterly production of 413kt, which was flat quarter on quarter. This compares to Goldman’s estimate of 365kt.

Management advised that this was driven by strong concentrator throughput at Escondida, higher production at Olympic Dam, and a recovery in production at Antamina following a six-week COVID-19 related stoppage in the June quarter.

Elsewhere, Metallurgical Coal production was down 17% quarter on quarter, Energy Coal production fell 18%, and Nickel production reduced 7%.

BHP Chief Executive Officer, Mike Henry, commented: “BHP has started the new financial year with a strong first quarter of safety and production performance. Group production rose two per cent from a year ago driven by solid results in metallurgical coal and iron ore, our major growth projects made good progress, and we secured more options in copper, nickel and oil.”

FY 2021 guidance.

BHP’s revealed that all production and unit cost guidance remains unchanged for the 2021 financial year, except for Cerrejón production guidance which is under review due to an ongoing strike.

In respect to its key commodities, in FY 2021 BHP continues to expect iron ore production of 244Mt to 253Mt, copper production of 1,480kt to 1,645kt, and petroleum production of 95MMboe to 101MMboe.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 3 high quality blue chip ASX shares to buy now
• How these 3 letters could see your ASX shares outshine
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 5 things to watch on the ASX 200 next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Washington H. Soul Pattinson & Co Ltd (ASX: SOL) share price has been something of a quiet performer over the past 2 months. Since 19 August, the Soul Patts share price has risen from around $20.80 to yesterday’s closing price of $26.02. That’s a rise of 25%. Not a bad return for 2 months of waiting, especially since the S&P/ASX 200 Index (ASX: XJO) is ‘only’ up by 2.7% over the same period.

So what’s behind this rather sudden rally? And, perhaps more importantly, are Soul Patts shares a buy at these new levels?

What’s been moving the Soul Patts share price?

The most important thing to understand about Soul Patts is that it’s really structured more like a listed investment company (LIC) these days, rather than a ‘traditional’ share like say Woolworths Group Ltd (ASX: WOW). Unlike most companies, the vast majority of Soul Patts’ earnings come from its investment portfolio of ASX shares and unlisted assets. Sure, the company still runs a few pharmacies (its original modus operandi). But in reality, these are rather inconsequential compared with Soul Patts’ investment portfolio.

Let’s examine Soul Patts’ largest portfolio positions. The company owns:

• a 25.3% stake in TPG Telecom Ltd (ASX: TPG)
• a 43.9% stake in Brickworks Limited (ASX: BKW)
• a 50% share of New Hope Corporation Limited (ASX: NHC)
• a 19.3% stake in Australian Pharmaceutical Industries Ltd (ASX: API)
• an 8.6%  share of BKI Investment Co Ltd (ASX: BKI)
• a 22.6% stake in Clover Corporation Limited (ASX: CLV)

Over the past 2 months:

• the Brickworks share price is up 12.7%
• the TPG share price is essentially flat.
• New Hope shares are down 11.5%
• Australian Pharma shares are down 5%
• BKI shares are essentially flat
• and Clover Corp shares are down 10.5%

Of these investments, the 43.9% stake in Brickworks is by far the largest. Since Brickworks has a market capitalisation of $2.91 billion on current prices, the 12.7% jump in the Brickworks share price would have been partly responsible for Soul Patts recent gains.

Additionally, we also know that some of Soul Patts’ board members have been heavily buying shares in recent weeks too. According to ASX filings, directors Thomas Millner and Robert Millner acquired 100,000 additional Soul Patts shares between them from 6 to 9 October. Those shares are worth more than $2.6 million today. That wasn’t the only tranche of shares purchased recently either – both gentlemen were also buying in late September as well.

Investors generally like to see company directors put their money where their mouths are, so I’m sure these moves helped push up the Soul Patts share price as well.

Is Soul Patts a buy today?

Personally, I love Soul Patts. It’s one of the most diverse companies you can buy on the ASX in my view. Further, its record-breaking (and still uninterrupted) 20-year streak of annual dividend increases is unbeaten on the ASX today. I don’t think the company is as compelling a buy as it was a few months ago, but I would still pick up shares today for a long-term ‘buy-and-hold’ bottom drawer investment.

More reading

• 2 ASX shares I plan to hold til I’m 100
• 2 ASX dividend shares raising their dividends like clockwork
• 2 robust ASX 200 blue chip shares to buy today
• How to replace your entire wage with ASX dividend shares
• This is where I’d invest $1,000 right now into ASX shares

Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Is Vanguard MSCI Index International Shares ETF (ASX: VGS) the best long-term investment?

There are a lot of different exchange-traded funds (ETFs) out there that can help diversify your portfolio. They can be used to just generally invest into shares. Or they can provide tactical diversification if you want more exposure to a particular geography or industry.

Each ETF is different and it’s important to understand what you’re investing into.

What is Vanguard MSCI Index International Shares ETF?

The aim of this ETF is to give investors exposure to the global share market, excluding Australia.

It’s invested in many of the world’s largest businesses in major developed countries for a low cost.

The investment is provided by Vanguard, one of the world’s leading investment managers. I think Vanguard is great. It aims to lower the cost of investing for investors. The owners of Vanguard are the investors themselves, Vanguard shares the profit by lowering costs.

I think Vanguard MSCI Index International Shares ETF is one of the best ETFs to consider because of its global diversification.

The portfolio

It’s actually invested in around 1,550 positions. That’s an excellent amount of diversification from just one investment.

Those holdings aren’t just based in one country, it’s invested right across the world. Around two thirds of the portfolio is invested in US shares, though remember that many of those US companies are global names – they just happen to be listed in the US. Other countries that represent more than 1% of the portfolio include: Japan, the UK, France, Switzerland, Canada, Germany, the Netherlands, Sweden and Hong Kong.

I also like the diversification offered in terms of the sector allocations. IT has the biggest allocation with a 22.5% holding. I believe investors should want a large tech exposure because that’s where the growth seems to be coming from.

Other sectors with a double digit allocation include 13.8% to healthcare, 12% to consumer discretionary, 11.5% to financials and 10.4% to industrials.

I’m sure you’re wondering about the actual businesses Vanguard MSCI Index International Shares ETF owns. Its biggest 10 holdings are: Apple, Microsoft, Amazon, Facebook, Alphabet, Johnson & Johnson, Nestle, Proctor & Gamble, Visa and Nvidia.

There are plenty of other interesting businesses as smaller holdings including Adobe, Salesforce.com, Walt Disney, Netflix, PayPal, SAP, Costco, ASML, AstraZeneca, Accenture and LVMH.

The performance

The ETF has performed reasonably well since inception in November 2014 with net returns of an average of 11.5% per annum. That includes the painful decline due to COVID-19.

Whilst there are some ETFs that have performed comfortably better, I think Vanguard MSCI Index International Shares ETF’s performance has been decent. A double digit return is a wealth-building growth rate.

The management fee

A big part of an ETF’s returns is a management fee. The lower the fee the higher the net return will be. Its fees can be really low because it just tracks an index rather than any active management component.

Vanguard MSCI Index International Shares ETF has an annual management fee of just 0.18%, which is very attractive to me. It’s cheaper than most Australian fund managers. 

Why I prefer it over Vanguard Diversified High Growth Index ETF (ASX: VDHG)

Vanguard Diversified High Growth Index ETF is a popular option because it offers a lot of diversification. A fund of ETFs in a single investment option. Why wouldn’t you just go with that instead?

Well, whilst I like the exposure to investments like smaller international shares and perhaps the emerging market shares, I don’t need a 10% allocation to bonds at this stage in my life.

I like the 100% allocation to shares with Vanguard MSCI Index International Shares ETF, it offers great diversification and a decent dividend income of around 2%. I think it could be one of the best, though I’d prefer to go with Betashares Global Quality Leaders ETF (ASX: QLTY). 

More reading

• Why it is important to diversify your ASX portfolio and how you can do it
• How to replace your entire wage with ASX dividend shares
• Which ASX ETFs offer the most diversification?
• Here are the 10 most popular ETFs on the ASX

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Is the National Australia Bank Ltd (ASX: NAB) share price a buy? It has risen by 10% this month, can the gains continue?

The outlook is improving for banks

Share prices are forward looking. If investors are expecting better things going into the future then they will push the NAB share price higher.

There have been a few key developments in recent weeks that should help NAB’s earnings over the medium-term. The federal budget looks supportive for the economy, particularly with tax cuts. If the economy is doing better then the major banks should beneficiaries.

The removal of responsible lending laws may help major banks like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ) to get more credit to potential borrowers. A bigger loan book could mean higher profits, as long as bad debts don’t rise.

However, there is still a question about what’s going to happen with bad debts.

The NAB FY20 third quarter trading update saw a credit impairment charge of $570 million and the percentage of loans that are 90 days (and more) past due continues to rise each quarter. This isn’t a very good sign for the bank. However, it was pleasing to see that NAB generated $1.5 billion of statutory net profit and $1.55 billion of cash earnings. It’s still making a lot of money, despite the difficulties. 

NAB’s improving balance sheet

The big bank continues to have a good balance sheet. Indeed, at the end of the third quarter it had a CET1 capital ratio of 11.6%. It also recently announced that it was going to sell MLC Wealth to IOOF Holdings Ltd (ASX: IFL) for $1.44 billion. That’s a solid amount of extra cash for the balance sheet. Stepping away from wealth management is probably a good idea.

So, it’s a good time to buy NAB shares?

NAB’s share price and the other banks could continue to rise in the short-term if Australia’s economy and COVID-19 situation continues to remain in control.

There is more positive news coming out than negative news. The outlook for Australian house prices is improving as well, largely because of the factors I’ve already mentioned (lower taxes, a good COVID-19 situation and easier lending laws). Though there are still some reputation hits from the Hayne royal commission. NAB is going to have to pay $15 million for its referral program that broke the law, according to the BusinessInsider. 

I think banks are in for a mixed bag over the next couple of years. There may be higher lending growth, but there could also be higher bad debts if all the loan payment holidays don’t all return to making normal payments.

NAB may not be a terrible shorter-term idea today, it’s just that I think there are plenty of other ASX shares I’d rather buy first.

Which ones?

In terms of other financial businesses, I think that something like Magellan Financial Group Ltd (ASX: MFG) could be an idea. Magellan is still growing its funds under management (FUM) at an attractively good pace. The fund manager provides investors with exposure to global shares, which is the key strategy.

Magellan is making a number of interesting investments into new businesses. One example is Barrenjoey, a new Australian investment bank.

The upcoming launch of a retirement product could also be really beneficial for FUM in the coming years.

Magellan continues to steadily grow its ordinary dividend, which makes it a solid ASX dividend share in my opinion. At the current Magellan share price it offers a grossed-up dividend yield of 5%. I think Magellan has much better returns prospects than the NAB share price does at the moment.

Other ASX dividend shares I’d be happy to consider include Future Generation Investment Company Ltd (ASX: FGX), Brickworks Limited (ASX: BKW) and Pacific Current Group Ltd (ASX: PAC).

More reading

• Are ANZ (ASX:ANZ) shares a buy for dividend income today?
• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• ASX 200 flat: Rio Tinto Q3 update, big four banks higher, GUD impresses
• Should you stay invested in an ASX share after a strong run?
• 2 ASX shares that could double your money in 5 years

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO. The Motley Fool Australia owns shares of and has recommended Brickworks. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Up 10% this month: Is the NAB (ASX:NAB) share price a buy? appeared first on Motley Fool Australia.

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