Author: therawinformant

On Wednesday the S&P/ASX 200 Index (ASX: XJO) continued its impressive run and surged higher again. The benchmark index climbed 1.25% to 6,036.4 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to rise again.

It looks set to be another positive day of trade for the ASX 200 index. According to the latest SPI futures, the benchmark index is expected to rise 25 points or 0.4% at the open. This follows a particularly positive night of trade on Wall Street after President Trump brought COVID stimulus talks back to the table. In late trade the Dow Jones is up 2%, the S&P 500 is 1.8% higher, and the Nasdaq is climbing 1.9%.

Oil prices soften.

Energy shares including Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) may come under pressure today after oil prices softened overnight. According to Bloomberg, the WTI crude oil price is down 1.7% to US$39.99 a barrel and the Brent crude oil price is down 1.35% to US$42.08 a barrel. Oversupply concerns were weighing on oil prices.

Gold price drops lower.

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch today after the gold price dropped lower. According to CNBC, the spot gold price has fallen 1% to US$1,889.0 an ounce. The prospect of a stimulus plan being agreed in the United States put pressure on the precious metal.

Dividends being paid.

A number of companies will be rewarding their shareholders with dividend payments on Wednesday. Among the companies making payments are logistics solutions company Brambles Limited (ASX: BXB) and leading appliance manufacturer Breville Group Ltd (ASX: BRG).

ASX Ltd shares rated as a sell.

The ASX Ltd (ASX: ASX) share price is overvalued according to one leading broker. A note out of Goldman Sachs reveals that its analysts have retained their sell rating and $70.44 price target on the stock exchange operator’s shares. This follows the release of its September update. Goldman Sachs didn’t see anything to justify the premium its shares trade at and believes they are expensive at 33x estimated FY 2021 earnings.

More reading

• Why you should wait another month to invest in ASX shares
• Has the Afterpay (ASX:APT) share price stalled?
• ASX 200 finishes 1.3% higher after federal budget
• 2 top ASX 200 blue chip shares worth a spot in your portfolio
• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses

The post 5 things to watch on the ASX 200 on Thursday appeared first on Motley Fool Australia.

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It’s early October and the S&P/ASX 200 Index (ASX: XJO) has already appreciated 2.8% since the start of the month. After the ASX 200’s lacklustre performance throughout September, I’m sure there are more than a few investors out there who are thinking about deploying more cash into the markets this month because… well you know, they’re going up.

But I think it might be prudent for investors to keep at least some (if not all) of their powder dry over the course of this month.

Why?

Well, we have one of the (arguably) most consequential events of the year (and perhaps of the decade) in early November. I’m of course talking about the United States 2020 presidential election. Yes, the election for president (as well as for the entire US House of Representatives and a third of the US Senate) will take place on Tuesday 3 November (Wednesday our time). The incumbent Republican, Donald Trump, is running for a second and final term against the Democratic nominee, former vice president Joe Biden.

Putting political views aside (that’s not what we really do here at the Fool), what does this have to do with investing? Or more specifically, not investing, as I’ve indicated.

Elections and investing

This election is consequential for all investors. And here’s why: Even under pre-2020, normal circumstances, elections are inherently disruptive events for investors. Elections lead to uncertainty, which leads to volatility. Throw in the special set of circumstances in 2020, including a highly divisive president and unprecedented levels of political polarisation in the US, and we have a recipe for extreme volatility. If the election is close and hinges on days or week of recounts, these circumstances will be exacerbated enormously. No matter what happens on 3 November, I’m expecting the US share markets to be up and down like a yo-yo. And that means, in all likelihood, our markets will be exactly the same.

This is normally a great time to have money to sink into the markets. Volatility can be frightening for investors, but it is also the patient investors’ friend. Anyone who invested large amounts of money in quality ASX shares back in March would be very glad they did so today, even if it was absolutely terrifying at the time. And no matter what happens in the election, I’m confident it won’t lead to any long-term issues that might affect the performance of ASX shares (or American companies for that matter).

Foolish takeaway

So I’m saving all of the cash that I can for this period. It might not play out exactly the way I’ve outlined today, but I think there’s a fair chance it will. And if it does, I’ll be glad to have an extra-large cash pile to play with. Just something to consider this October!

More reading

• Has the Afterpay (ASX:APT) share price stalled?
• ASX 200 finishes 1.3% higher after federal budget
• 2 top ASX 200 blue chip shares worth a spot in your portfolio
• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses
• Why you may not need ASX REITs for dividends

Motley Fool contributor Sebastian Bowen 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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While I think the big four banks are great options for income investors due to their generous yields, I wouldn’t be expecting a huge amount of growth from them in the coming years.

So if you’re looking for growing dividends, you might want to take a look at the shares below. While their yields may not be as large as the banks, I believe they have the potential to grow materially over the 2020s.

Here’s why I would buy these ASX dividend shares:

Bravura Solutions Ltd (ASX: BVS)

I think this leading provider of software products and services to the wealth management and funds administration industries would be a great option for income investors. This is because I’m confident that Bravura is well-placed for growth once the pandemic passes. Especially given its growing portfolio of high quality solutions which have large addressable markets.

The main product in its portfolio is the Sonata wealth management platform. While I expect it to be the key driver of growth in the future, this should be supported by the Rufus transfer agency solution, the Garradin back office solution, and the Midwinter financial planning solution. 

At present, I estimate that it will pay shareholders an 11.5 cents per share dividend in FY 2021. Based on the current Bravura share price, this equates to an attractive 3.3% dividend yield.

People Infrastructure Ltd (ASX: PPE)

Another option to consider buying is People Infrastructure. It is a leading workforce management company which has been experiencing strong demand for its innovative solutions to workforce challenges. This led to the company delivering an impressive 34.5% increase in revenue to $374.2 million and a 53.3% lift in normalised net profit after tax and before amortisation (NPATA) to $18.4 million in FY 2020. 

And while its growth may moderate in FY 2021 because of the pandemic, I believe its strong growth will continue once the crisis passes. In the meantime, I estimate that it will pay shareholders a 9.5 cents per share fully franked dividend in FY 2021. Based on the current People Infrastructure share price, this gives investors an attractive 3.1% forward dividend yield.

More reading

• 2 great value ASX dividend shares to buy right now
• These ASX dividend shares could be stars of the future
• Where should you invest your Wesfarmers (ASX:WES) dividends?
• Why I would buy these ASX dividend shares today
• 2 top ASX dividend shares for income investors to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended People Infrastructure 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 Harvest Technology Group Ltd (ASX: HTG) share price dropped today after the company announced a global marketing alliance.

In morning trade, the Harvest share price reached as high as 37 cents, but has since retreated to close 4.17% lower at 34 cents.

What does Harvest do?

Harvest Technology develops end-to-end customised technology solutions. The company specialises in hardware and software solutions that encode multiple video, audio and synchronised data channels over satellite communications.

Harvest’s product suite includes secure, low bandwidth, real-time content that is accessible from anywhere in the world.

The company has aggressively pursued high revenue opportunities in growth industries. Key markets such as defence, airline, space, remote-land based communities and emergency communications are all within Harvest’s scope.

What is the global marketing alliance

The market alliance is a trilateral partnership for ultra-low bandwidth remote monitoring solutions.

Harvest’s partners include Inmarsat Enterprise and Applied Satellite Technology Group (AST), both world leaders in satellite communications.

The new alliance will provide Harvest access to satellite communications infrastructure. This will enable the transmission of high-quality synchronised video and audio over ultra-low bandwidth. In turn, the company will be able to remotely monitor assets, coordinate site surveys and conduct maintenance operations.

Harvest noted the alliance would benefit sectors such as resources, energy and utilities as a result of COVID-19. This was because the pandemic had placed restrictions on personnel and created sustainability challenges.

Harvest also said remote customers could be connected live back to base, thus relieving pressure to maintain infrastructure while safeguarding workers.

A welcome partnership

Harvest managing director Paul Guilfoyle welcomed the alliance, saying:

We are beyond thrilled to work with Inmarsat and AST to further strengthen the global reach of ultra-low- bandwidth remote communications.

This alliance will not only allow for the implementation of existing technology but will further fuel innovation for future cutting-edge communication initiatives.

AST managing director Gregory Darling added:

AST is delighted to partner with Harvest and Inmarsat to provide real-time video and audio solutions cost effectively through our secure global INTEGRA network from anywhere in the world.

The partnership supports our vision to continuously empower our customers with dependable solutions that improve their operational efficiency, reduce their health and safety risk and minimise their carbon footprint.

Inmarsat sector development director Steven Tompkins also welcomed the partnership. He said:

By developing a wearable solution that supports our High Data Rate (HDR) streaming capabilities across a low-bandwidth connection, Harvest is facilitating highly efficient, safe, cost-effective and sustainable site surveys of pipelines and valuable assets across industrial sites in remote areas around the world.

We are excited about the huge potential of this agreement and how it will change the way industrial professionals communicate and collaborate, no matter where they are located.

More reading

• 2 growing ASX dividend shares to buy before it’s too late
• Has the Afterpay (ASX:APT) share price stalled?
• Are these the best small cap ASX shares to buy for FY 2021?
• Why the Carsales.com (ASX:CAR) share price just zoomed to a record high
• Why the PYC Therapeutics (ASX:PYC) share price is up 9% today

Motley Fool contributor Aaron Teboneras 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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Has the Afterpay Ltd (ASX: APT) share price stalled?

Afterpay shares have been one of the most talked-about shares on the S&P/ASX 200 Index (ASX: XJO) in 2020 so far. That’s what tends to happen when a company makes a whole lot of investors very poor, followed by very rich, all in a relatively small space of time.

Afterpay shares started 2020 out at $30.63. By February, they were at $40 – a 33% increase in just 2 months. But then the coronavirus-induced March share market crash came and Afterpay shares were quickly wiped out, going as low as $8.01 on 23 March, a level not seen since Afterpay’s days of obscurity in 2018.

But today, Afterpay shares are commanding a price tag of $84.84 (at the time of writing) – a 961% return since the lows seen in March. Whilst that might seem like a truly insane return for 7 months, existing Afterpay shareholders might be feeling a bit lost today. That’s because since peaking at $95.97 back in August, the Afterpay share price hasn’t done a whole lot. Investors are used to seeing this company either crash or explode – not sit comfortably at a certain share price. Yet that is what Afterpay shares are seemingly doing right now and indeed have since August. Just look at the pricing graph below for some context:

So what’s going on here? And more importantly, are Afterpay shares a buy today?

Is the Afterpay share price a buy today?

At today’s share price, the market is giving Afterpay an approximate market capitalisation of $24.16 billion. That’s no small thing, considering supermarket giant Coles Group Ltd (ASX: COL) has, on current pricing, a market cap of $23.66 billion.

Interestingly, Coles recently reported that its FY2020 revenues came in at $37.4 billion, with earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.39 billion and net profits after tax of $951 million.

In contrast, over the same period, Afterpay reported $519 million in revenue, earnings of $44.4 million and a net loss after tax of $22.9 million. What a contrast!

The difference here is that Afterpay’s earnings grew at 73% in FY2020, whereas Coles’ earnings grew at 4.7%.

Still, you as an investor have to decide whether it’s worth buying Afterpay today for a valuation exceeding Coles. If Afterpay can sustain 74% earnings growth for a decade, it’s a bargain today, even at this price. But it would still take around 8 years at a 73% annual growth rate to even match Coles’ earnings.

If this growth stalls, whether due to increased competition or some other reason, then a market cap of more than $24 billion starts to look silly. I think it’s because of a lack of news surrounding Afterpay in recent weeks as well as it’s already arguably-lofty valuation that is keeping the Afterpay share price very neutral at the moment.

Foolish takeaway

At the end of the day, you as an investor have to make this choice. It’s a hard one, but, up until now, no one got rich on Afterpay shares by making the easy choice.

More reading

• ASX 200 finishes 1.3% higher after federal budget
• 2 top ASX 200 blue chip shares worth a spot in your portfolio
• Why I would buy these 3 ASX dividend shares for income today
• Top brokers name 3 ASX shares to buy today
• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and COLESGROUP DEF SET. 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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If you have a risk profile that allows you to invest in small cap ASX shares, then you might want to take a look at the ones listed below.

I believe these small cap ASX shares are arguably the best on offer at this side of the market right now. Here’s why I think they could be future stars of the ASX:

Bigtincan Holdings Ltd (ASX: BTH)

The first small cap ASX share to consider buying is Bigtincan. It is a fast-growing sales enablement platform provider. Management notes that the company’s platform pairs functionality with a highly intuitive user interface to provide an advanced content management system, document automation, internal communications, and a fully integrated modern learning management system.

This ultimately helps users deliver a better customer experience and empowers sales and marketing teams to drive improved business results. Demand for its offering continues to grow from blue chip companies and underpinned very strong recurring revenue growth in FY 2020. Over the 12 months, Bigtincan delivered a 53% increase annualised recurring revenue (ARR) to $35.8 million.

ELMO Software Ltd (ASX: ELO)

Another small cap ASX share which I think has a lot of potential is ELMO. It is a cloud-based human resources and payroll software company that provides a unified platform that streamlines a wide range of processes.

As with Bigtincan, ELMO was a positive performer in FY 2020 despite the pandemic. It reported a 19.7% increase in ARR to $55.1 million. FY 2021 looks set to be a similarly strong year, with management expecting to grow its ARR organically by 18% to 27%. Though, it is worth noting that this guidance doesn’t include potential acquisitions. ELMO had a cash balance of almost $140 million at the end of FY 2020. The majority of this is likely to be deployed on value accretive acquisitions in the near term.

Whispir (ASX: WSP)

A final small cap to look at is Whispir. It is a leading workflow communications platform provider which allows organisations to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. 

As with the others, Whispir was a very strong performer in FY 2020. For the 12 months ended 30 June 2020, it posted a 25.5% increase in revenue to $39.1 million and ARR growth of 34% to $42.2 million. This compares to its prospectus forecast of $37.8 million and $42 million, respectively. The good news is that this is still only scratching at the surface of its massive global market opportunity. Management estimates that the workflow communications platform as a service market could be worth US$8 billion per year by 2024.

More reading

• 4 stellar ASX growth shares to buy right now
• Why I would buy Xero (ASX:XRO) and this ASX tech share
• Why these ASX tech shares just hit record highs
• 2 ASX tech shares I’d buy with $10,000 
• 3 small cap ASX shares to put on your watchlist right now

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 and recommends BIGTINCAN FPO, Elmo Software, and Whispir Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO, Elmo Software, and Whispir 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 Carsales.com Ltd (ASX: CAR) share price was on form again on Wednesday and continued to zoom higher.

The online auto listings company’s shares climbed 2% to hit a record high of $21.82.

When the Carsales share price hit that new high, it meant it was up over 28% since the start of the year.

Why is the Carsales share price at a record high?

Investors have been buying the company’s shares this year thanks to its positive performance in FY 2020 despite facing significant headwinds from the COVID-19 pandemic.

For the 12 months ended 30 June 2020, Carsales posted a 1% increase in adjusted revenue to $423 million. And thanks to cost reductions, which supported margin improvements, Carsales delivered adjusted EBITDA growth of 6% to $218 million.

Another big positive was management’s commentary in relation to current trading conditions.

It commented: “We have observed a strong rebound in demand for vehicles across multiple international markets as countries have emerged from lockdown. We have also seen continued migration to digital platforms as well as people’s aversion to taking public transport (deemed unsafe due to COVID-19) have increased the propensity for car ownership, which are positive trends for our business.”

While management stopped short of providing any real guidance for FY 2021, the market appears optimistic that its earnings growth will continue.

What else is supporting the Carsales share price?

Another positive for the company was yesterday’s Federal Budget.

As well as putting more money in consumers’ pockets from tax cuts, the government will allow businesses with turnover of up to $5 billion a year to immediately write-off all assets up to $150,000.

This is great news for businesses that are in need of new vehicles and could underpin solid listing volume growth on the Carsales platform.

Is it too late to invest?

While I think Carsales is a quality company, I feel its shares are looking fully valued after these recent gains. As a result, I would class it as a hold at this point.

For now, I would sooner buy SEEK Limited (ASX: SEK) shares, which I think offer a more compelling risk/reward.

More reading

• Meet the latest ASX small cap stock that’s racing ahead during COVID
• Is the Carsales (ASX:CAR) share price a good buy?
• 3 profitable October ASX 200 trends
• ASX 200 jumps 2.4% higher, numerous shares rise
• New $280 million ASX tech share listing Wednesday

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended carsales.com Limited and 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 PYC Therapeutics Ltd (ASX: PYC) share price leapt 9% higher to 18 cents today before slipping to trade at 17 cents by late afternoon. The share price gains came after the company announced that its lead drug was effective in all patient-derived models tested.

PYC Therapeutics shareholders have had much to celebrate this year, with the share price up 192% in 2020. By comparison the All Ordinaries Index (ASX: XAO) is down 8% since 2 January.

Not that the PYC share price was spared the pain during the wider COVID-19 driven market rout earlier this year. That saw the price tumble 29% from 21 February through to 23 March.

Investors lucky enough to buy at that low will be sitting on gains of 250% today.

What does PYC Therapeutics do?

PYC Therapeutics is a drug development company specialising in delivering large drugs directly into patients’ cells. Its cell penetrating peptides (CPPs) are designed to overcome what the company calls ‘the delivery challenge’. Its work involves directly targeting cells ‘undruggable genomes’ for maximum impact. The company uses its CPP platform to develop a range of therapies, with a current focus on inherited retinal diseases.

PYC Therapeutics has a market cap of $504 million.

Why did the PYC share price lift?

It is hoped that PYC’s lead drug program, VP-001, becomes the first disease-modifying therapy for patients with Retinitis Pigmentosa type 11 (RP11). On Monday, the company announced that the critical achievement for its lead program lay in showing the positive impact of the drug on models derived from 5 patients suffering from RP11.

This morning, PYC Therapeutics reported that results from all 5 of its patient derived models had shown the desired effect of its drug on the target gene. The company stated that the results offered “the strongest indication to date that the drug will be effective in all patients with RP11 when the program enters clinical development”.

PYC CEO Rohan Hockings said:

RP11 is a disease of insufficient PRPF3 protein. This result shows VP-001 increases PRPF31 protein in patient derived models. This is a major milestone for the VP-001 program, and further increases our confidence as we approach the clinic. Only in precision medicine can you see such meaningful readouts at this stage of development.

With the PYC share price already up more than 190% in 2020, I think this is one share to keep a close eye on.

More reading

• Here’s why the CV Check (ASX:CV1) share price has soared 30% today
• Why the Tesserent (ASX:TNT) share price has surged 18% today
• Why the Envirosuite (ASX:EVS) share price has rocketed up today
• Why the Image Resources (ASX:IMA) share price is rocketing higher today
• Why the Droneshield (ASX:DRO) share price has rocketed higher

Motley Fool contributor Bernd Struben 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 S&P/ASX 200 Index (ASX: XJO) finished today strongly, growing by 1.25% to 6,036 points after the release of yesterday’s Australian federal budget.

Scott Phillips shared his thoughts on the budget in this article.

Here are some of the highlights from the ASX today:

Shares react to the budget

Looking at the big ASX banks, the Commonwealth Bank of Australia (ASX: CBA) share price went up more than 2%, the Westpac Banking Corp (ASX: WBC) share price increased by over 2%, the National Australia Bank Ltd (ASX: NAB) share price grew by around 2% and the Australia and New Zealand Banking Group (ASX: ANZ) share price share price rose by more than 2%.

Other large ASX 200 shares also reacted positively, particularly large employers. The Wesfarmers Ltd (ASX: WES) share price went up 2.5%, the Coles Group Limited (ASX: COL) share price rose by 1.6% and the Woolworths Group Ltd (ASX: WOW) share price climbed by 2%.

The aged care operators have fallen today. The Estia Health Care Ltd (ASX: EHE) share price fell by 2%, the Japara Healthcare Ltd (ASX: JHC) share price dropped by 3.7% and the Regis Healthcare Ltd (ASX: REG) share price declined by 1.4%.

Magellan Financial Group Ltd (ASX: MFG)

Magellan announced today that its total funds under management (FUM) increased by $1.2 billion to $102 billion at the end of September 2020.

The fund manager said that in September it experienced net inflows of $1.2 billion which included net retail inflows of $239 million and net institutional inflows of $959 million. This largely appears to have helped its infrastructure equities grow by around $900 million.

In reaction to this update, the Magellan share price went up by more than 2%.

ARB Corporation Limited (ASX: ARB)

The ASX 200 vehicle accessories business provided a pleasing update to the market.

It said that it achieved sales growth of 17.7% for the first quarter of FY21 to 30 September 2020 compared to the previous corresponding period.

Based on its preliminary, unaudited management accounts, ARB’s profit before tax for the quarter was $29.7 million. This guidance excludes non-recurring government benefits of $9.7 million for the quarter.

ARB said that excellent growth was achieved in export markets, while domestic Australian sales growth was moderate and, as expected, OEM sales decreased compared to the same period last year.

The extended lockdown in Melbourne had a negative impact on local sales during the quarter. The level of outstanding orders remains high and work is being done to overcome logistical difficulties and to increase production to reduce the order bank and better service customers.

The ASX 200’s board thinks a substantial amount of the recent growth can be attributed to satisfying pent up demand created during the lockdown period. In addition, ARB’s leadership thinks an increased trend towards local touring in several countries has been helping and government support has provided spending stimulus to people and businesses. Unless something economically drastic happens, export sales are expected to remain strong and the OEM order book is growing.

While the shorter term looks positive for ARB, management said that the future economic environment remains very uncertain and no guidance could be given for the rest of the financial year. The company warned the first quarter’s performance shouldn’t be used as an indicator of the likely full year result as it’s too uncertain to predict.

As government and other COVID-19 related support reduces, the impact on economic activity will be monitored by management closely.

The ARB share price initially went up by more than 5% in early trading, but it finished the day higher by just over 2%.

More reading

• 2 top ASX 200 blue chip shares worth a spot in your portfolio
• Why I would buy these 3 ASX dividend shares for income today
• Top brokers name 3 ASX shares to buy today
• ASX 200 up 0.4%: Big four banks push higher, Westpac upgraded, ARB impresses
• Why a2 Milk, Afterpay, ARB, & SEEK shares are pushing higher today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended ARB 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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If you don’t currently have the funds to build a truly diverse portfolio, then I think exchange traded funds (ETFs) could be just what you need.

This is because through a single investment, ETFs give investors exposure to whole indices, industries, or themes.

There are a growing number of ETFs out there for investors to choose from, but two of my favourites are named below. Here’s why I like them:

iShares Asia 50 ETF (ASX: IAA)

The first ETF to consider buying is the iShares Asia 50 ETF. According to BlackRock, as its name implies, this fund aims to provide investors with the performance of the S&P Asia 50 Index, before fees and expenses. This index is home to the 50 leading companies that are listed in China, Hong Kong, Macau, Singapore, South Korea, and Taiwan. As I’m bullish on the Asian economy over the next decade, I feel it could be a great place to invest some funds.

Included in the fund are companies such as AIA Group, China Mobile, Hyundai, Samsung, Taiwan Semiconductor, and Tencent Holdings. The latter is the owner of the hugely successful WeChat app.

VanEck Vectors S&P/ASX MidCap ETF (ASX: MVE)

If you want to add some exposure to growth shares, then the VanEck Vectors S&P/ASX MidCap ETF could be a great way to do it. This ETF invests in a diversified portfolio of ASX-listed shares with the aim of providing investment returns that closely track those of the S&P/ASX Midcap 50 Index.

VanEck notes that Australian mid cap shares are the sweet spot of the Australian equity universe and represent companies with the spirit of small companies combined with the maturity of large companies. Among its holdings you’ll find the likes of Afterpay Ltd (ASX: APT), Domino’s Pizza Enterprises Ltd (ASX: DMP), Flight Centre Travel Group Ltd (ASX: FLT), and Xero Limited (ASX: XRO). Given the quality on offer in the fund, I believe it has the potential to outperform the benchmark ASX 200 index over the coming years.

More reading

• Is it still safe to invest in China?
• Is the ResMed (ASX:RMD) share price a strong buy today?
• One ASX share every patient investor should own
• 2 top ASX 200 blue chip shares worth a spot in your portfolio
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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 Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and Flight Centre Travel Group 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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