Author: therawinformant

There are a number of ASX dividend shares that could be worth buying for income with 2021.

It’s pretty difficult for income investors to get enough income at the moment. Australia’s official interest rate has been cut to just 0.25%. That makes it hard to make decent money from your bank account.

I think ASX dividend shares are the answer for the income predicament. Businesses can generate good profits and pay out attractive dividends to shareholders. Some ASX shares have cut their dividends significantly, such as Westpac Banking Corp (ASX: WBC), there are better ideas out there.

Here are three great examples:

Brickworks Limited (ASX: BKW)

Brickworks is a diversified property business. It sells a variety of products in Australia like precast, roofing, bricks, paving and masonry. The construction industry could see a resurgence as Australia emerges from the impacts of COVID-19.

Some banks like Westpac are predicting that property prices could bounce over the next couple of years. I think that could be good news for demand for Brickworks products.

One of the great things about Brickworks is its dividend reliability. The ASX dividend share hasn’t cut its dividend for over 40 years. That’s a very impressive record in my opinion.

Brickworks has diversified assets including a large holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares as well as a 50% stake of an industrial property trust along with Goodman Group (ASX: GMG).

In 2021 the giant warehouses for Amazon and Coles Group Limited (ASX: COL) will be close to be completed. This would be a big boost for the value of the property trust.

At the current Brickworks share price it has a grossed-up dividend yield of 4.5%. It’s trading at under 11x FY21’s estimated earnings.

WAM Microcap Limited (ASX: WMI)

WAM Microcap is a listed investment company (LIC) which invests in businesses with market capitalisations under $300 million.

ASX shares can be great opportunities if you can fund those hidden gems that are about to go on to make big returns. WAM Microcap’s investment team have been very good at finding those opportunities.

The LIC can use the investment returns it makes to pay large ordinary and special dividends. WAM Microcap has paid a special dividend in each of the last three financial years.

Since inception in June 2017, WAM Microcap portfolio’s gross return before fees, expenses and taxes has been 21.7% per annum. That’s a very strong return. Over the past year, which includes COVID-19, the gross portfolio return has been 25.4%.

At the current WAM Microcap share price it has a grossed-up ordinary dividend yield of 5.7%. Including this FY20’s special dividend, at today’s WAM Microcap share price shareholders received a grossed-up dividend of 8.5% in FY20.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is another LIC ASX share. It has been one of the best performers over the past decade (in total return terms) and I think the next decade could be very good under the stewardship of Chris Mackay.

It targets quality international shares which have strong competitive advantages. When you look at its current holdings, there is a clear bet on the payment giants Visa and Mastercard. Those two investments make up about a third of the portfolio. They have a long growth runway as more transactions turn cashless and there’s also the rise in e-commerce.

The MFF Capital board is looking to increase the six-monthly dividend payment to 5 cents per share in the medium-term. That translates to a grossed-up dividend yield of 5.5% at the current MFF Capital share price.

The ASX share has a lot of cash at the moment to protect against market volatility whilst it looks for new investment opportunities. At the current MFF Capital share price it’s trading at a 7% discount to the net tangible assets (NTA) per share at 18 September 2020.

Foolish takeaway

I think all three of these ASX dividend shares could be good options for income over the coming years. I believe Brickworks will continue to be very reliable, whilst WAM Microcap could continue its large dividend payments.

More reading

• Where I’d invest $500 into ASX shares
• Why everyone should have Brickworks (ASX:BKW) and 1 other ASX share
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• 3 ASX 200 growth shares to buy right now
• 5 things to watch on the ASX 200 next week

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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 S&P/ASX 200 Index (ASX: XJO) isn’t starting the week too well. ASX 200 shares are down another 0.62% today (at the time of writing), which backs up yesterday’s 0.7% drop. The ASX 200 is now sitting at 5,784 points, which is a 3-month low. The index has been down trending for a month, and is now 6% below where it was on 25 August. It’s an interesting week for all assets as well. Gold has slumped, oil too. Even cryptocurrencies have been selling off of late.

So, is this the right time to be buying ASX 200 shares? The old saying does go ‘buy low, sell high’ after all…

Time to load up the truck on ASX 200 shares?

With the market at a 3-month low, I think it is a good time to think about deploying some capital in the markets, especially if you’ve spent the past few months sitting on your hands. No one knows whether this dip in ASX 200 shares is a temporary one or not. The markets could explode higher tomorrow, rendering today’s falls as the ‘bottom’. Equally likely, markets could continue to plunge tomorrow, or else just stay where they are. It’s therefore foolish (and not the good kind of Foolish) to try and base your investing decisions on these factors alone.

But general market weakness does mean there’s a fair chance any companies you might have been watching will be trading at relatively low valuations, at least compared to what we’ve seen in recent months. So I’m using this slump in ASX 200 shares to renew my watchlist, and reevaluate any shares I’ve put in the ‘too expensive’ bucket in recent months.

I’m only able to do this becuase I haven’t been buying any shares, at least since April. I thought it prudent to instead build my cash position back up after exhausting most of it in the March crash. I’m now considering putting some of that cash to work (it’s not doing me any good in the bank anyway) and initiating or topping up ASX 200 share positions that look cheap today. Mind you, I’m only planning on deploying some cash. I’m still keeping most of my powder dry in case things continue to trend lower.

And if things rebound and the markets start pushing back towards 6,000 points, then I’ll start stockpiling cash once again. Timing the markets is usually always a terrible idea. But that doesn’t mean you can’t tilt the playing field a little bit to give yourself some options.

More reading

• Why the News Corp (ASX:NWS) share price is plunging today
• Why you should look beyond the second wave to the blue investment skies beyond
• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• Share, commodity and cryptocurrency markets fall overnight
• Can the Harvey Norman (ASX:HVN) share price maintain its momentum?

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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I think exchange traded funds (ETFs) can be great additions to a balanced portfolio.

This is because they give investors easy access to a large and diverse number of different shares through just a single investment.

There are a lot of ETFs for investors to choose from, so which should you buy? Three of the best in my opinion are listed below. Here’s why I like them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

My favourite ETF continues to be the BetaShares NASDAQ 100 ETF. It gives investors exposure to 100 of the largest non-financial companies on the famous Nasdaq index. This includes some of the biggest and most iconic companies in the world. Among its holdings are the likes of Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla. Given the quality of these companies and their very positive outlooks, I believe the Nasdaq 100 ETF can generate strong returns for investors over the next decade.

VanEck Vectors Australian Banks ETF (ASX: MVB)

If you’re looking to take advantage of the recent pullback in bank shares, then you might want to take a look at the VanEck Vectors Australian Banks ETF. I think this ETF would be a great way to gain exposure to the banking sector as it gives investors a piece of all the big four banks, the regionals, and even investment bank Macquarie Group Ltd (ASX: MQG) through a single investment. This is especially helpful if you’re not sure which bank to buy ahead of others.

VanEck Vectors China New Economy ETF (ASX: CNEW)

A final ETF to consider buying is the VanEck Vectors China New Economy ETF. It gives investors access to China through a portfolio of exciting companies which are in sectors making up “the New Economy.” This includes the technology, health care, consumer staples, and consumer discretionary sectors. The VanEck Vectors China New Economy ETF is invested in 120 companies, which it believes represent growth at a reasonable price.

More reading

• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• Why you should look beyond the second wave to the blue investment skies beyond
• 3 ASX growth ETFs to add to your portfolio
• Forget the uncertainty, here’s why you want to invest in ASX shares today
• 3 high quality ASX growth shares to invest $3,000 into 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 BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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 Buy BetaShares NASDAQ 100 ETF (ASX:NDQ) and these ETFs today appeared first on Motley Fool Australia.

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Quarterly reporting does a massive disservice to public companies and their shareholders, according to well-known businessman David Gonski. 

Gonski, who is the outgoing Australia and New Zealand Banking GrpLtd (ASX: ANZ) chair, said such frequent reporting incentivised management to neglect long-term goals.

“I know that quarterly results have come back a bit now because of COVID-19, and that’s very explicable and correct,” he said.

“But I hope that once the pandemic is over, we will move away from that – because running a company purely to report every 90 days is too short-term.”

Gonski said any large business must communicate its long-term vision to shareholders, staff and customers.

“Superb business leaders know what the right balance is given the right set of situations and those who put it out of balance can do real damage to the company.”

Optus chair Paul O’Sullivan will take over from Gonski at ANZ from 28 October.

Give CEOs a break: Gonski

As chair of ANZ, Gonski oversaw the bank during the Royal Commission into the finance industry and into the COVID-19 pandemic.

But he said CEOs were the ones with an unenviable job during tough times.

“I’ve been a chairman of a bank, but I’ve never been a CEO of a bank. I have great praise for those who take that on,” he said. 

“While I’m not suggesting for a minute that one should feel sorry for them, I do think that we should all be aware that these are not easy jobs.”

Chief executives of ASX-listed companies juggle the livelihoods of thousands of employees, investors and customers in a “very public setting”.

“It is not just a matter of being paid well to sit in that chair, rather, it’s a matter of being paid well to do a job that is very challenging and very consuming in all aspects.”

As chancellor of University of NSW, Gonski singled out alumnus and Commonwealth Bank of Australia (ASX: CBA) chief Matt Comyn for praise.

“I’m not only proud that we have trained him – I’m proud that we can train a person of that standard.”

How independent directors can challenge executives

The Royal Commission found that independent (non-executive) directors have a crucial role in challenging management for good governance and culture.

Gonski said there were two ways directors gathered information to play this role effectively.

First is setting up matrices that check management is adhering to basic governance and cultural requirements.

“The danger, obviously, is that this could become just paperwork… I think there’s a place for that – but people who rely on it totally make a mistake.”

This leads to the second activity.

“Questioning in private sessions between the CEO alone and the board is terribly important,” said Gonski. 

“Listening to other people in the company, from senior management down and sometimes during board tours and inspections of the assets – where you actually see some of the people who work in the business – is also terribly important.”

More reading

• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• 2 ASX shares to buy today for house price rise
• CBA, Macquarie face new $167m dirty cash allegations
• Macquarie says ASX value shares will outperform growth stocks from here
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just

Motley Fool contributor Tony Yoo 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 News Corporation (ASX: NWS) share price is plunging today, down 3.76% to $20.45 at the time of writing. It’s a large downwards move for this company’s share price, even if the broader S&P/ASX 200 Index (ASX: XJO) is also having a bad day as well.

So what’s going on with the famous Murdoch-controlled company this week?

What is News Corporation?

News Corp is the media giant owned and co-chaired by former Australian Rupert Murdoch, alongside his son Lachlan. Most Australians would be familiar with News Corp through its tabloid newspapers, The Daily Telegraph, The Herald-Sun and The Courier Mail.  A significant stake in online property classifieds company REA Group Ltd (ASX: REA) is also a lucrative asset for News Corp. The company also owns a stake in pay-TV operator Foxtel, as well as in the US newspaper The New York Post and a bevy of UK-based newspapers such as The Sun as well. Significantly, the company also owns the US-based Dow Jones & Company, which publishes the famous investing newspaper The Wall Street Journal, as well as Barron’s magazine.

Why is the News Corp share price plunging today?

The News Corp share price has been on the ascendency for a week or 2 now, ever since the company released its results for the 2020 financial year (as well as for the quarter ending 30 June 2020) early last month. For the first time, News Corp broke down the revenue from its Dow Jones & Company segment, which up until then wasn’t reported separately. Between 6 August and yesterday, News Crop shares were up almost 15%, partly as a result. Such positivity probably stems from the impressive numbers out of the Dow Jones segment. These were up 13% over the quarter ending June 30.

But today’s moves in the News Corp share price are a definite ‘change of mood’ from the market. So what triggered this re-rating? Well, it’s clear investors didn’t really like what they saw in a Dow Jones Investor Day presentation released this morning.

On the whole, it was a very positive report. News Corp outlined how circulation and subscription revenue rose from US$2.7 billion in FY14 to US$3.8 billion in FY20. It also highlighted the strength of its brand compared to its rivals.

A changing media landscape

The only thing that appears to have the potential to spook investors today (in my opinion, anyway) was News Corp outlining how its revenue mix has changed from the 2014 financial year. This includes segments like News Media falling from 53% of total revenue in FY14 to 31% in FY20, as well as subscription video services rising from 6% of revenue in FY14 to 21% in FY20.

Media is one of the industries arguably going through the biggest disruption today, both from an already-present digitalisation trend as well as the ravages of the coronavirus pandemic. Perhaps seeing the vast changes to News Corp’s revenue base in just the past 6 years is behind the sell-off in the News Corp share price today.

More reading

• ASX 200 hits 3-month low! Is it time to buy ASX shares today?
• Why you should look beyond the second wave to the blue investment skies beyond
• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• Share, commodity and cryptocurrency markets fall overnight
• Can the Harvey Norman (ASX:HVN) share price maintain its momentum?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA 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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The Respiri Limited (ASX: RSH) share price is up 6.82% to 23.5 cents in early afternoon trading. The surge in the Respiri share price comes following the company’s announcement this morning of a binding electronic manufacturing services (EMS) agreement with Entech Electronics for Respiri’s wheezo™ product.

Wheezo is a novel eHealth app developed to assist with managing asthma. Together with a simple handheld device, wheezo records a user’s breathing and analyses it for any wheezing.

Following on today’s intraday surge, the Respiri share price is up nearly 47% so far in September. Year to date, the Respiri share price is up 135%.

For comparison, the All Ordinaries Index (ASX: XAO) is down 12% since 2 January.

What do Respiri and Entech Electronics do?

Respiri develops innovative eHealth solutions with the goal of improving the management of chronic respiratory disorders like asthma. The company creates technology to help asthma patients and doctors monitor and manage asthma. Respiri aims to help improve the quality of life of asthma patients around the world.

Entech Electronics is a privately owned Australian contract electronics manufacturer, headquartered in Devon Park, South Australia. The company operates offshore production facilities in Shenzhen, China and has more than 34 years of experience in electronic manufacturing including across the medical device, aerospace and defence sectors.

What did Respiri and Entech Electronics agree on?

Respiri announced it has entered into a partnership with Entech Electronics for the global supply of its ground breaking wheezo product.

The company stated that the first orders for wheezo have been placed and that Entech Electronics has commenced production preparation at its Shenzhen facility. It reported that 12,000 devices have been commissioned and it expects to commence delivery in February 2021.

The new partnership will enable Respiri to increase its production levels to meet the expected global demand, while the shift to a low-cost production environment should see its cost of goods fall by 85%. The company noted the costs should fall even further with increased volume over time.

Addressing the strategic partnership, Marjan Mikel, Respiri’s CEO and Managing Director, said:

We are delighted to partner with Entech Electronics as they are well placed to support our global product volume requirements at cost positions that support Respiri’s business model

Wayne Hoffman, CEO of Entech Electronics, added:

We are welcoming Respiri as a customer with significant growth potential and look forward to contributing to the success of wheezo with both our medical device experience and electronic manufacturing competence. Our operation in Shenzhen has commenced investment in assembly and test equipment that will allow us to scale quickly and react to Respiri’s forecast growing global demand and accommodate monthly volume requirements well in excess of 10,000 devices.

If costs decline and demand for wheezo comes through as expected, the Respiri share price will be one to watch.

More reading

• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• Leading brokers name 3 ASX shares to sell today
• Why you should look beyond the second wave to the blue investment skies beyond
• COVID-19 fear hits the UK, 2 ASX shares to buy
• Genex (ASX:GNX) share price flat on battery project update

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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Australia’s leading investment platform provider CommSec has just released data on the five most traded ASX shares on its platform from last week.

There were a number of familiar faces in the list again this week, with buy now pay later (BNPL) and tech shares remaining popular with investors.

Here’s the data:

Brainchip Holdings Ltd (ASX: BRN)

Once again, BrainChip was easily the most traded share on the CommSec platform last week. The artificial intelligence technology company’s shares accounted for 5.9% of trades on the platform, with buyers making up 62% of these trades. Unfortunately for those buyers, the BrainChip share price crashed 33% lower over the five days. Investors appear to have finally started to question its valuation given its little to no revenue.

Zip Co Ltd (ASX: Z1P)

Once again, this BNPL provider was popular with retail investors and accounted for 3.2% of trades on the CommSec platform. The buying and selling was relatively evenly split, with 55% of trades coming from the buy side. Thankfully for those buyers, the Zip share price added 2.8% over the five days. Though, its shares are still down materially month to date.

Commonwealth Bank of Australia (ASX: CBA)

Australia’s largest bank makes the top five after its shares accounted for 1.7% of trades on the platform last week. Retail investors appear to have been taking advantage of recent weakness in the CBA share price to pick up shares. Approximately 78% of trades were from buyers. Unfortunately, this buying pressure couldn’t stop the CBA share price from recording its fifth weekly decline in a row. It fell 1.1% over the period.

Afterpay Ltd (ASX: APT)

This payments company’s shares were popular with retail investors once again. Afterpay accounted for 1.6% of trades on the CommSec platform over the five days. And although there were more sellers (56%) than buyers (44%), that didn’t stop the Afterpay share price from rising 2.6% last week.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Rounding out the top five is this popular exchange traded fund (ETF). It has now made the list for three consecutive weeks. The BetaShares NASDAQ 100 ETF was responsible for 1.5% of trades on the CommSec platform last week. A whopping 91% of these trades came from buyers. They appear to believe the tech selloff on Wall Street has created a buying opportunity.

More reading

• Why you should look beyond the second wave to the blue investment skies beyond
• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• 2 ASX shares to buy today for house price rise
• CBA, Macquarie face new $167m dirty cash allegations
• New $280 million ASX tech share listing Wednesday

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 BETANASDAQ ETF UNITS and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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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On Monday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below.

Here’s why these brokers are bearish on these ASX shares:

Magellan Financial Group Ltd (ASX: MFG)

According to a note out Morgan Stanley, its analysts have retained their underweight rating and $48.00 price target on this fund manager’s shares. The broker notes that Magellan’s shares are trading at a level that makes it one of the most expensive asset managers in the world. And while there is a lot to like about the company, it isn’t enough to justify buying shares at the current level. The Magellan share price is changing hands at $54.40 this afternoon.

St Barbara Ltd (ASX: SBM)

A note out of the Macquarie equities desk reveals that its analysts have retained their underperform rating and $3.30 price target on this gold miner’s shares. This follows an update in relation to a temporary production disruption at its Gwalia operation. Although management appears optimistic that it will catch up on its production in the second quarter, Macquarie has still reduced its forecasts slightly. Outside this, the broker has previously noted that there is a lot of near term uncertainty for the company. Following a tough few days, the St Barbara share price has dropped below this price target and down to $3.06.

Webjet Limited (ASX: WEB)

Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and cut the price target on this online travel agent’s shares to $3.00. According to the note, the broker believes it will be FY 2022 when Webjet is profitable again. This is due to its exposure to the leisure air travel market and the tough trading conditions it is facing. Based on Morgan Stanley’s forecasts, the company’s shares are trading at 40x FY 2022 earnings. This is even after a 5% decline in the Webjet share price to $3.62 this afternoon.

More reading

• ASX 200 drops another 0.8%, Magellan (ASX:MFG) reveals a large investment
• 2 ASX shares I would buy for growth and income
• Leading brokers name 3 ASX shares to buy today
• Why Byron Energy, Clover, DEXUS, & Webjet shares are sinking lower today
• ASX 200 down 0.5%: Harvey Norman (ASX:HVN) update, Magellan (ASX:MFG) makes Barrenjoey investment

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet 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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Global news on the virus front hasn’t exactly stirred investors’ animal spirits these past few weeks.

While Australia looks to have COVID-19 almost under control, with Victoria emerging from the strictest lockdown conditions over the coming weeks, much of the rest of the world is facing sweeping second and third waves of infection.

Case numbers are spiralling across most of Europe, the United States, India and Japan… to name a few.

Aside from the tragic loss of life this portends, investors are increasingly concerned about the potential for new rounds of lockdown measures in some of the world’s biggest economies. Measures that will extend their domestic recessions and almost certainly push a return to international travel further down the timeline.

Add in the dawning reality that global governments’ virtual blank cheque stimulus measures can’t continue indefinitely, and we have a fair picture of why share prices have been retracing in September.

However, as we’ll have a look at shortly, selling quality shares now rather than buying them at a bargain could prove a costly mistake in the long-term.

But first, a quick look at some of the latest market moves.

Big tech shares buck the losing trend

Yesterday, overnight Aussie time, the major US and European share markets all lost ground.

The United Kingdom’s FTSE 100 (INDEXFTSE: UKX) fell 3.8%. Year-to-date it’s now down 24%.

In the US, the Dow Jones Industrial Average (INDEXDJX: .DJI) led the way lower, falling 1.8%. The Dow is also in the red for 2020, down 6%.

The broader Nasdaq Composite (INDEXNASDAQ: .IXIC) also slipped, closing down 0.1%. But the biggest 100 technology-oriented shares contained in the NASDAQ-100 (INDEXNASDAQ: NDX) bucked the losing tend, combining for a 0.4% gain.

Meanwhile the S&P/ASX 200 Index (ASX: XJO) is down 0.8% in early afternoon trading.

However, most ASX listed tech shares are heading the other way. The S&P/ASX All Technology Index (ASX: XTX) – which tracks 50 of Australia’s leading and emerging technology shares – is up 1.3%.

And the Betashares Nasdaq 100 ETF (ASX: NDQ), which holds 100 of the biggest names in technology, is up 2.4%. While it’s still down 10% from its 3 September highs, year-to-date the share price is up 19%.

The resilience of the big tech shares, despite what many call their “lofty valuations” won’t come as a surprise to Seema Shah, the chief strategist at Principal Global Investors in London.

Here’s an excerpt of what Shah revealed regarding the rise of technology shares on Bloomberg’s What Goes Up podcast on 12 September:

[W]e may have increased our reliance, and we may pull back some of that dependence, on technology. But a fundamental core of that is here to stay. And also in an environment where there is so much uncertainty, we still don’t know what’s around the corner, you still need companies that have got those really strong balance sheets and positive cash flow. And those mega-cap tech stocks meet that criteria.

Indeed, yesterday Apple Inc. (NASDAQ: AAPL), to pick the biggest of the mega-cap shares, gained 3%. Apple’s share price is still down 18% from its 1 September all-time highs. But with the share price up 47% for the year, buy-to-hold investors won’t have anything to complain about.

No shortage of opportunities

It’s not just tech shares offering great opportunities to patient investors.

As the Australian Financial Review reports, “some fund managers are using the sell-off to buy into companies that will benefit from an economic recovery as the number of COVID-19 cases falls.”

Like UniSuper chief investment officer John Pearce, who says of the recent share market pullback:

It’s providing an opportunity and there’s still plenty of opportunities there. If you want to back the reopening trade, there’s no shortage of opportunities in tourism, travel and property. A number of stocks are still reasonably well off their highs, and if we get a vaccine and with interest rates at zero, there’s no reason those stocks can’t reclaim those highs.

Let’s look at 3 of those opportunities now. Shares that may continue to lag as investors focus on short term fears of second waves of infection but that could easily regain their former highs once domestic and international borders reopen for regular travel.

First up, cruise line behemoth Carnival Corp (NYSE: CCL). Carnival’s share price fell almost 7% yesterday on those shorter-term fears. That puts the share price down 72% from its 17 January 2020 high. If Carnival’s share price regains that level, it will represent a 257% gain from today’s share price.

Second up, Sydney Airport Holdings Pty Ltd (ASX: SYD). Sydney Airport’s share price is down 38% since 17 January. Investors who buy shares today would see a gain of 61% if Sydney Airport’s share price revisits its January high.

Finally, there’s Flight Centre Travel Group Ltd (ASX: FLT). The blue chip travel agency’s share price is down 67% from 15 January. If Flight Centre’s share price regains its 2020 high, that would be a gain of 203% from today’s prices.

Now there’s no reason these shares couldn’t head lower from here over the short term. But if you have a long term investment horizon, these 3 are just some of the opportunities to potentially bank some hefty gains down the road.

More reading

• BrainChip (ASX:BRN) and Afterpay (ASX:APT) were among the most traded shares on the ASX last week
• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• Share, commodity and cryptocurrency markets fall overnight
• Can the Harvey Norman (ASX:HVN) share price maintain its momentum?
• Up 79% this year, is the NextDC (ASX:NXT) share price the next Afterpay (ASX:APT)?

Bernd Struben 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 Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Carnival. The Motley Fool Australia has recommended Apple, BETANASDAQ ETF UNITS, 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.

The post Why you should look beyond the second wave to the blue investment skies beyond appeared first on Motley Fool Australia.

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There are rising COVID-19 fears in the northern hemisphere as cases surge and additional lockdowns are being considered. It’s hurting UK shares and I think that two ASX shares could be worth considering. 

According to reporting by the BBC, the UK coronavirus alert level is moving to level 4. That means that transmission is ‘high or rising exponentially’. The government’s scientific adviser warned there could be 50,000 new coronavirus cases a day by mid-October without further action.

The number of COVID-19 confirmed cases in the UK on Monday was another 4,368 with the number rapidly rising compared to previous weeks.

It was a painful Monday for UK investors with the FTSE 100 dropping by 3.4%. I think the UK share market is looking good value during these falls and a rising Australian dollar. Here are the ASX share ideas:

Betashares Ftse 100 ETF (ASX: F100)

This exchange-traded fund (ETF) is about the FTSE 100, as the name suggests. The FTSE 100 is a similar concept to the ASX 100 – it’s the biggest 100 businesses on the London Stock Exchange.

There are plenty of recognisable businesses in the FTSE 100. Even if you don’t know a company’s corporate name, you would know some products like GlaxoSmithKline’s Panadol.

Some of the ETF’s biggest exposures are with names like (in position size order): AstraZeneca, GlaxoSmithKline, British American Tobacco, HSBC, Diageo, Rio Tinto, Unilever, BP, Reckitt Benckiser, Royal Dutch Shell, BHP, Relx, National Grid, Prudential, London Stock Exchange Group, Vodafone and Experian. These are quite different to what you get from large ASX shares.

Further down the holdings list are a number of interesting businesses like Glencore, Barclays, Scottish Mortgage Investment Trust, Ocado, Just Eat, Burberry, Kingfisher, Severn Trent and St James Palace.

I like the diversification that the FTSE 100 ETF offers. It’s better than the diversification of ASX 100 shares that’s for sure, which is focused on financial services and resource businesses. There are five different sectors in the FTSE 100 which have an allocation of more than 10% – consumer staples, financials, healthcare, materials and industrials.

It’s not a tech heavy ETF (with lots of high margin growth) like Betashares Nasdaq 100 ETF (ASX: NDQ), but it certainly ticks the diversification box.

The ETF has an annual management fee of 0.45% per annum, which isn’t bad for the type of investment you get.

Brexit continues to weigh on the UK share market, though hopefully the UK economy will be able to grow once COVID-19 impacts end.

Virgin Money UK CDI (ASX: VUK)

This is a UK bank ASX share, which used to be called CYBG, which stood for Clydesdale Yorkshire Banking Group.

Aside from the major UK banks like Barclays, Virgin Money is one of the next biggest banks after a merger between CYBG and Virgin Money.

Today the Virgin Money UK share price is down 8%. Just like ASX banks, the UK banking sector is suffering with the economic impacts from COVID-19.

The Virgin Money share price has been very volatile over the past year. It has sank 11% over the past week and it’s down 65% since the COVID-19 crash.

The ASX share has seen its net interest margin (NIM) fall due to a decline in the UK’s interest rate. Virgin Money recently said that the third quarter NIM was 1.47%, a reduction from 1.63% from the second quarter. It said that this was also the result of holding excess customer deposits.

Virgin Money is expect a FY20 NIM of between 1.55% to 160% with liability repricing actions to drive an improvement in the NIM in the fourth quarter and beyond.

Foolish takeaway

Virgin Money is definitely a high-risk, high-reward idea. It has fallen a long way. It could rebound hard if the UK can fairly quickly bounce back from COVID-19. But there could also be much higher bad debts over the next 12 months for the ASX share – it just depends how bad things become. 

The Betashares Ftse 100 ETF seems like an interesting idea to me. Its top holdings are quite defensive, the share prices are falling and the Aussie dollar is stronger. I’d be happy to invest in the ETF today.

More reading

• ASX 200 down 0.9%: Tech shares push higher, gold miners sink, New Hope results
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• These were the worst performing ASX 200 shares last week
• ASX 200 drops 0.3%, gold miners keep rising
• Here’s how I would spend $10,000 on ASX shares right now

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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 COVID-19 fear hits the UK, 2 ASX shares to buy appeared first on Motley Fool Australia.

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