Author: therawinformant

Buying ASX shares for both growth and income is one of the best ways to invest, in my view. Nothing is better than holding a growth share that you’re reasonably sure has a bright future ahead of it, and being paid to hold it while you wait for this bright future to come to light. Finding these kinds of ASX shares can be tricky, but today let’s discuss 2 that I think fit the mould nicely.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is an ASX financial share that focuses on the funds management business. Over the past decade or so, this company has managed to grow into the largest fund manager in Australia. This is no mean feat or accident. Magellan is helmed by one of the best fund managers in the country, billionaire Hamish Douglass.

A keen follower and disciple of the legendary investor Warren Buffett, Mr Douglass has built his reputation on buying and holding what he sees as the best companies in the world. And this reputation has been an absolute asset for Magellan. This is a company that has managed to grow its funds under management (FUM) by 26% over the 2020 financial year to nearly $100 billion (a feat made devilishly tricky by the pandemic). As of August, Magellan’s FUM stands at $100.87 billion.

This growth has helped push Magellan shares up by close to 80% since 23 March, although the shares are still underwater for the whole year so far. Magellan is also a generous income share. On current prices, investors can expect a trailing yield of 3.89%, which comes partially franked and was increased by 16% over FY19’s dividend in FY20.

Adding all of these factors together, I think Magellan is a top share to buy for both growth and dividend income.

iShares S&P 500 ETF (ASX: IVV)

Our second growth and income share is this exchange-traded fund (ETF) from BetaShares. IVV tracks the American S&P 500, one of the most popular indices in the world. The S&P 500 holds 500 of the largest companies in the US. You’ll find tech titans like Apple Inc (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT) at the top of this ETF, but it also includes a diverse range of American companies like Warren Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), healthcare giant Johnson & Johnson (NYSE: JNJ), oil companies like Exxon Mobil Corporation (NYSE: XOM) and carmaker General Motors Company (NYSE: GM).

Unlike the ASX, the S&P 500 has a reputation for growth over income, which is reflected in its average return of 17.15% per annum over the past 10 years. Nevertheless, IVV also offers a small dividend yield of 1.78% per annum on current prices. As such, I would be very happy to own IVV for both growth and income over the coming years.

More reading

• ASX 200 drops another 0.8%, Magellan (ASX:MFG) reveals a large investment
• ASX 200 down 0.5%: Harvey Norman (ASX:HVN) update, Magellan (ASX:MFG) makes Barrenjoey investment
• Magellan (ASX:MFG) share price slides lower after investing in Barrenjoey
• Why you should always invest in ASX shares when interest rates are low
• Magellan (ASX:MFG) reveals best share buys for September

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Johnson & Johnson. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Berkshire Hathaway (B shares), and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Johnson & Johnson and recommends the following options: long January 2021 $85 calls on Microsoft, long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short January 2021 $115 calls on Microsoft. The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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) is home to a number of high quality shares for investors to choose from. But with so much choice, it can be hard to decide which ones to buy.

To narrow things down for you, I’ve picked out three ASX 200 shares which I think would be great additions to a balanced portfolio this week. They are as follows:

REA Group Limited (ASX: REA)

The first ASX 200 share to consider buying is this property listings company. While times are hard for the housing market right now, house prices have been tipped to rebound strongly in 2021. If this comes to pass, REA Group should see demand for listings increase. Combined with recent price increases, new revenue streams, and cost cutting, I feel REA Group’s earnings growth should accelerate once again.

Telstra Corporation Ltd (ASX: TLS)

Another option for investors on the ASX 200 is Telstra. I’ve been very pleased with the way the telco giant has turned around its fortunes in 2020 and believe it is well positioned for a return to growth in the near future. This is due to the return of rational competition in the telco industry, its cost cutting plans, and its leadership position in the 5G market. I expect the latter to underpin solid growth in its increasingly important mobile business in the coming years. Another positive is that the Telstra share price is trading close to its 52-week low at present. This could make it an opportune time to consider a patient long-term investment.

Wesfarmers Ltd (ASX: WES)

A final ASX 200 share to consider buying is Wesfarmers. It is the conglomerate behind popular brands such as Bunnings, Kmart, Target, Catch, and Officeworks. It also has a number of chemicals and industrial businesses such as lithium miner Kidman Resources. In addition to this, Wesfarmers has a strong balance sheet and plenty of cash to deploy on earnings accretive acquisitions. Combined, I believe the company is well-positioned to deliver consistently solid earnings growth over the 2020s. This could make Wesfarmers shares a great option for a balanced portfolio.

More reading

• 2 reliable blue chip ASX 200 shares to buy today
• Magellan (ASX:MFG) share price slides lower after investing in Barrenjoey
• Why the Telstra (ASX:TLS) share price looks cheap today
• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• Goldman Sachs names 4 reasons to buy Telstra shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. 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 Perenti Global Ltd (ASX: PRN) share price was up 0.4% at the time of writing to $1.27. This came after the company announced it had received a BB rating from Fitch and confirmed a notes issue to refinance existing outstanding notes.

What was announced?

Fitch assigned Perenti a long-term issuer default rating of BB with a positive outlook. This was based on the credit rating agency’s assessment of Perenti as a global mining services contractor and its financial policy, which Perenti stated was prudent. A long term issuer default rating is based on the perceived likelihood that an issuer will default on their outstanding financial obligations.

Perenti chief financial officer Peter Bryant said the BB rating demonstrated the group’s solid credit profile and robust outlook.

This was the company’s inaugural rating by Fitch. Perenti is also rated BB by Standard and Poors and Ba2 by Moody’s.

Also today, Perenti announced it would issue $350 million in guaranteed senior unsecured notes in the United States. The proceeds would be used to redeem $350 million of 6.625% senior secured notes due in May 2022.

Moody’s, which matched its existing Ba2 rating with a stable outlook for the notes issue with Perenti’s rating overall, commented:

Perenti’s credit profile reflects the company’s improved business profile with the increased scale and diversification following the acquisition of Barminco. Perenti has a strong position in providing integrated mining services in its target markets and and a demonstrated ability to execute contracts with a diversified range of counterparties.

About the Perenti share price

Perenti provides services for surface and underground mining in Australia and Africa. It also engages in equipment hire, parts sales, service exchange and maintenance services. It has been listed on the ASX since 1994.

In August, Perenti announced record revenue of $2.04 billion for the year to 30 June 2020, up 3.8%. Earnings before interest, tax, depreciation and amortisation (EBITDA) were $443.8 million, up 6.8%. Net profit after tax in the year to 30 June, 2020 was $27.6 million. 

 The Perenti share price is up 182.22% since its 52-week low of 45 cents. However, it is down 20.63% since the beginning of the year. The Perenti share price is down 44.05% since this time last year.

More reading

• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• These were the best performing ASX 200 shares last week
• ASX 200 falls slightly, miners surge higher
• Perenti (ASX:PRN) share price pushes higher as contract secured
• ASX 200 rises 1%, CSL (ASX:CSL) leads the way

Motley Fool contributor Chris Chitty 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 Atlas Arteria Group (ASX: ALX) share price has closed 3.98% lower today. The fall in the Atlas Arteria share prices comes after the company’s ASX announcement earlier today regarding its dividend payment for the 6 months ending 30 June.

The toll road company’s share price was savaged by the wider COVID-19 market selloff earlier this year, dropping 47% from 3 February to 23 March.

Since that low, the Atlas Arteria share price has rebounded nearly 45%. Despite that strong run higher, year to date the share price remains down more than 20%.

Atlas Arteria is part of the S&P/ASX 200 Index (ASX: XJO). By contrast the ASX 200 is down 13% for the year.

What does Atlas Arteria do?

Atlas Arteria Group (formerly Macquarie Atlas Roads) owns, operates and develops toll roads around the world. The company has four toll roads across the United States, France and Germany. Its APRR motorway network in France is Europe’s fourth-largest motorway group.

In 2010, Atlas Arteria was created through the splitting of Macquarie Infrastructure Group into two separate ASX-listed toll road companies: Macquarie Atlas Roads, now known as Atlas Arteria, and Intoll, which was subsequently acquired by a Canadian company.

Atlas Arteria has a market capitalisation of $6.2 billion.

What’s moving the Atlas Arteria share price?

The Atlas Arteria share price is today moving lower after the company announced an unfranked distribution of 11 cents per stapled security for the 6 months ending 30 June. Atlas Arteria estimates the payment will be made on 5 October. Shares begin to trade ex-entitlement this Friday 25 September.

Although the dividend payment is in line with the guidance the company provided on 27 August in its half year results, investors may be disappointed Atlas Arteria didn’t exceed that guidance. 11 cents per share is the lowest payout shareholders have received since 2017.

Investors are also still concerned with the ongoing impact that coronavirus is having on the company’s toll road revenues. A second wave of infections is building momentum in two of its core markets — Germany and France. Meanwhile, high infection levels in the United States continue to hinder travel there.

Those are valid short and even mid-term concerns. But with progress being made on the treatment and vaccine fronts, and global governments opening the purse strings to fund major road projects, the current Atlas Arteria share price could look like a bargain by this time next year.

More reading

• ASX 200 rises 1%, CSL (ASX:CSL) leads the way
• Atlas Arteria share price up 5% despite earnings hit

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 Blackmores Limited (ASX: BKL) share price is on form for once on Monday.

In afternoon trade the health supplements company’s shares are up 1.5% to $70.15.

Despite this gain, the Blackmores share price is still down 27% from its 52-week high.

Is this a buying opportunity?

Although the Blackmores share price is trading notably lower this year, I wouldn’t be in a rush to invest just yet. This is due to its uncertain performance and the high multiples its shares are trading on.

This is a view that I share with analysts at Goldman Sachs. This morning the broker retained its neutral rating and cut its price target on Blackmores’ shares to $71.00.

It notes that the company is going through a major transformation at present.

Goldman explained: “BKL is progressing through a period of significant change as it vertically integrates production through its Braeside manufacturing facility, offloads underperforming assets (Global Therapeutics) and reestablishes its growth model into China and more broadly through Asia.”

This transformation is weighing on its earnings momentum and is expected to continue doing so in the near term.

However, based on the current Blackmores share price, Goldman suspects that the market is pricing in a much swifter turnaround.

It said: “Earnings momentum remains steadfastly negative, but growth expectations are strong and BKL’s PE remains elevated suggesting the market is pricing in a portion of a turnaround. We now forecast an underlying FY21 EBITDA of A$69.1mn and EPS of A$1.58.”

This means the Blackmores’ share price is trading at a lofty 44x FY 2021 earnings right now. And looking even further ahead, the broker is forecasting earnings per share of $2.21 in FY 2022. This equates to a multiple of 32x FY 2022 earnings for its shares.

In light of this, I would suggest investors either wait for a better entry point or for the company’s performance to improve.

In the meantime, I would sooner buy A2 Milk Company Ltd (ASX: A2M) shares. Goldman estimates that they are changing hands at 28x estimated FY 2021 earnings and 24x estimated FY 2022 earnings.

More reading

• ASX 200 Weekly Wrap: ASX 200 snaps 4 week losing streak… just
• These were the best performing ASX 200 shares last week
• Why I’m watching the Blackmores (ASX: BKL) share price this year
• Half of ASX 200 stocks at risk as China-Australia relations hit new low
• ASX 200 Weekly Wrap: Earnings drag ASX back to reality

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia owns shares of A2 Milk. 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 that there are aren’t too many S&P/ASX 200 Index (ASX: XJO) shares that can be classified as reliable because of what has happened during COVID-19. Some businesses have been hit hard. 

Quite a few shares like National Australia Bank Ltd (ASX: NAB) and Woodside Petroleum Limited (ASX: WPL) have sunk and not recovered (yet).

However, there have been other ASX 200 shares that have been reliable during this difficult period.

I’m not suggesting that my two reliable ideas are amazing value or likely to smash the market over the medium-term. However, I think they have proven themselves through both this COVID-19 period as well as before that in ‘normal’ times.

Here are my two reliable ASX 200 share ideas:

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a diversified business that has been around for many decades. It has proven its worth during this difficult COVID-19 period with the huge surge of people looking to buy home office equipment from Officeworks as well as home improvement project supplies from Bunnings.

In FY20 the company saw divisional earnings before tax (EBT), excluding significant items, rise by 1.3% to $2.89 billion. This was completely driven by the 13.9% EBT increase from Bunnings to $1.85 billion and the 13.8% increase to EBT by Officeworks. All the divisions saw declines in EBT, particularly Kmart Group and the industrial and safety division which saw EBT declines of 23.5% and 53.5% respectively.

Wesfarmers’ continuing net profit rose 8.2% after excluding significant items.

I really like the diversification offered by Wesfarmers and its various segments. The acquisition moves to buy lithium miner Kidman Resources and online retailer Catch could prove to be very sound investments.

The outlook for Wesfarmers in FY21 is uncertain due to COVID-19 and the Target restructuring. But over the long-term I think the ASX share can continue to generate good performance with a focus on shareholder returns (meaning dividends). It’s probably one of the best ASX dividend shares in the ASX 200.

At the current Wesfarmers share price it’s trading at 23x FY22’s estimated earnings.

CSL Limited (ASX: CSL)

CSL is currently the biggest business in the ASX 200. It has been a true success story over the past decade with the CSL share price rising 794%.

The healthcare biotech giant has done extremely well at expanding its product portfolio. Each product represents a defensive earnings stream. I think this difficult COVID-19 period has shown how important it is that a population takes healthcare seriously and how valuable CSL’s services are.

The ASX 200 share is actually going to be involved in manufacturing two of the most promising COVID-19 vaccines. One is the Oxford University candidate and the other one is the University of Queensland vaccine.

CSL continues to invest heavily in its research and development of new products. If you exclude that large R&D spending then the CSL share price valuation doesn’t look as high as it seems. That expenditure will hopefully open up new exciting treatments to help people and unlock more earnings growth.

In FY20 the ASX 200 share generated net profit after tax (NPAT) of US$2.1 billion. It also grew its full year dividend. In FY21 management has provided net profit guidance of US$2.1 billion to $2.265 billion. Further profit growth would be a good result considering all of the COVID-19 impacts, particularly when it comes to plasma collection centres.

At the current CSL share price it’s trading at 38x FY22’s estimated earnings.

Foolish takeaway

Both CSL and Wesfarmers are quality ASX 200 shares and overall have shown they can generate reliable profit growth even during a global pandemic. FY21 may be volatile over the coming months, but I’d feel content to own these businesses for many years to come at today’s valuations.

More reading

• ASX 200 drops another 0.8%, Magellan (ASX:MFG) reveals a large investment
• Is it time to buy Telstra and these high quality ASX 200 shares?
• Latest ASX 200 stocks hit by broker downgrades today
• Two ASX infrastructure shares to buy before the October budget
• What you need to know about Tyro’s share price roller coaster today

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 CSL Ltd. The Motley Fool Australia owns shares of Wesfarmers 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 Advance NanoTek Ltd (ASX: ANO) share price is crashing lower on Monday afternoon after the release of a sales update.

At the time of writing the advanced materials company’s shares are down 11% to $3.35.

This leaves the Advance NanoTek share price trading 52% lower than its 52-week high and within sight of its 52-week low of $3.20.

What was in Advance NanoTek’s update?

Today’s update revealed that the company’s poor performance has continued in FY 2021 due to negative impacts from the pandemic.

According to the release, based on current distributor forecasts for the second quarter, the company expects its first half sales to be lower than the prior corresponding period.

Management explained that travel restrictions are reducing demand for sunscreen, which is having a knock-on effect on sales of its zinc oxide product. In addition to this, it believes its shortened delivery times are having a negative impact on near term demand.

The company explained: “ANO understands the delay in sales orders is due to the significant travel restrictions caused by the second and third waves of COVID-19 in Europe and the US.”

“We are also seeing distributors destocking due to us offering much shorter delivery times. Distributors prepared to comment, have indicated that Q3 sales should improve as customers are gearing up for the next season and continue to improve over foreseeable future,” it added.

What now?

In light of this sales uncertainty, the company advised that it can longer say that its first half result will be stronger year on year. Nor can it accurately predict its full year results because of the uncertainty.

Though, it has advised that the Board is working on a number of initiatives in an effort to diversify its product offerings. It is also looking to increase its distribution network and prepare the company for a potential significant increase in demand for zinc oxide over the next three years.

More reading

• Latest ASX 200 stocks hit by broker downgrades today
• 3 ASX shares moving higher today
• Where I’d invest $500 into ASX shares
• Brainchip (ASX:BRN) share price shoots 9% higher on software development centre
• Afterpay (ASX:APT) one of top 10 lockdown winners

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 Advance NanoTek Limited. 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 (Index:^AXJO) started the week on a negative footing. But some ASX stocks have suffered bigger losses after being downgraded by top brokers.

The top 200 stock benchmark fell 0.5% in after lunch trade as negative overseas leads weighed on sentiment.

But the fall is nothing compared to the 6.5% tumble by the Virgin Money UK CDI (ASX: VUK) share price. The UK bank lender is the second worst performer on the ASX 200 at the time of writing with the Unibail-Rodamco-Westfield CDI (ASX: URW) share price taking the wooden spoon.

Negative rates trigger downgrade

Virgin Money is underperforming after Bell Potter downgraded the stock to “hold” from “buy” as the broker warned that storm clouds are gathering.

The Bank of England is likely to use negative interest rate to support the country’s sagging economy. The outlook for the UK darkened significantly as it struggles to contain a new COVID-19 outbreak.

Negative rates could render mortgages unprofitable and that poses a big risk to Virgin Money as these account for 82% of its loan book.

Virgin Money more exposed than peers

What’s more, the lenders more at risks are smaller institutions and those that have greater dependency on retail deposits for funding. Virgin Money fits into both categories!

“While VUK continues to expect a FY20 [net interest margin] of 155-160bp, we feel the overall outlook will be more challenging in FY21 given reduced flexibility to reprice liabilities among other things,” said Bell Potter.

The broker’s 12-month price target on the stock was cut to $1.80 from $2 a share.

Dust yet to settle

Another underperformer today is the DEXUS Property Group (ASX: DXS) share price. Shares in the office property group retreated 3.2% to $8.73 at the time of writing.

The fall coincides with Morgan Stanley’s decision to downgrade the stock by two full notches to “underweight” (or “sell”) from “overweight”.

The broker believes the outlook for the Australian office property market is tougher than it originally thought.

“Office is going through a societal shift, where longer-term decisions are being postponed, as exemplified by tenants requesting shorter-term deals on recent expiries,” said the broker.

“DXS may look good value today, but as we think tenants have yet to work out where they stand on Work-from-Home, a bounce back is unlikely in the next 12 months.”

Cheap but not yet cheap enough

Dexus may be trading at around a 15% discount to net tangible assets, but the stock traded at a 60% discount during the GFC.

Sure, the GFC isn’t quite the same as the COVID carnage, but that experience shows equity valuations can overshoot the physical market in a down- and upcycle, noted Morgan Stanley.

The broker also cut its 12-month price target on Dexus to $8.15 from $10.20 a share.

More reading

• Two ASX infrastructure shares to buy before the October budget
• What you need to know about Tyro’s share price roller coaster 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
• Why I like Saracen (ASX:SAR) and these ASX mining shares today

Motley Fool contributor Brendon Lau 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) is sitting low today, with the index having fallen 0.77% at the time of writing. However, a few ASX shares moving higher today are swimming against the tide. Here are three of them:

3 ASX shares rising today

Sonic Healthcare Limited (ASX: SHL) 

The Sonic Healthcare share price is up 2.43% today after jumping from a closing price on Friday last week of $32.50 to currently trade at $33.29. Sonic Healthcare is a global healthcare company. It specialises in a number of niches including medicine/pathology, radiology/diagnostic imaging and primary care services. Sonic is based in Sydney.

Recently, Sonic announced a final dividend of 51 cents per share, bringing the total dividend to 85 cents per share for the year. In recent reporting, Sonic provided some solid numbers, with earnings before interest, tax, depreciation and amortisation (EBITDA) coming in higher than anticipated. The Sonic Healthcare share price recently slumped, however now looks set to chase its 52-week high of $38 if it maintains this new bullish course.

Frontier Digital Ventures Ltd (ASX: FDV)

The Frontier Digital Ventures share price continues to enjoy the bullish action it has seen over the last 3 trading sessions. On Thursday last week, Frontier shares moved up more than 8%. On Friday, the price rose 4.2% and today it has moved as much as 11.4% in intraday trade. A heavy pullback around lunchtime has seen much of today’s gains reversed, however we normally see some volatility after a few days of bullish action.

Frontier is a private equity firm specialising in developing and investing in online classified advertising businesses. Investing in the automobile and property advertising niches are some of Frontier’s top choices. Frontier has offices in both Australia and Malaysia.

Recently in early September, Frontier announced that it had partnered with Brazilian digital real estate brokerage platform AoCubo, through its investee business InfoCasas. This is a significant opportunity for Frontier to expand interests into the Brazil market.

This industry has proven to be very lucrative for bigger players such as REA Group Limited (ASX: REA), Domain Holdings Australia Ltd (ASX: DHG) and Carsales.Com Ltd (ASX: CAR).

Whitehaven Coal Ltd (ASX: WHC) 

The Whitehaven Coal share price has surged as much as 8.5% in intraday trade today. Coming off the back of a few stagnant and down days in the back half of last week, this is a welcome change for investors.

Whitehaven operates coal mines in New South Wales and Queensland. It is headquartered in Sydney and sells its product (coal) to many international markets. These include buyers located in Japan, Taiwan, Korea, India, China, Malaysia and many others.

The company has had a bad run recently. The Whitehaven share price has been on a downward slope with falling coal prices and and increased regulation from foreign governments. I don’t think Whitehaven has quite hit a turning point yet, but it’s great to see a green day on the market for the company.

Foolish takeaway

It’s always a good idea to pay attention to the shares moving higher today, as it can give you an indication of what the rest of the week might bring. These companies are running out of the gate, so hopefully we will see continued momentum.

More reading

• ASX 200 down 0.5%: Harvey Norman (ASX:HVN) update, Magellan (ASX:MFG) makes Barrenjoey investment
• ASX 200 down 0.1%: Tech shares push higher, AMP (ASX:AMP) sinks lower
• ASX 200 drops 1.2%, Mineral Resources (ASX:MIN) fell 9%
• Why Northern Star, SeaLink, THC Global, & Whitehaven Coal shares are dropping lower
• ASX 200 up 0.7%: Afterpay (ASX:APT) higher, QBE Insurance (ASX:QBE) lower on UK update

glennleese 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 Frontier Digital Ventures Ltd. The Motley Fool Australia has recommended carsales.com Limited, Frontier Digital Ventures Ltd, REA Group Limited, and Sonic Healthcare 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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I think that there are a few different ASX share options that would be good ideas for a $500 investment.

It can be hard to know where to start investing when there are so many different options. I think there are a few good places to start like exchange-traded funds (ETFs) and listed investment companies (LICs).

Both ETFs and LICs give investors the ability to invest in a large group of shares through a single investment. Most ETFs are index-based and LICs are run by an investor or an investment team.

I think an ETF or a LIC is a good start for a $500 ASX share investment because it creates instant diversification and you can’t go too wrong with most of them (as long as you pick a decent one – there are some very left-field ETFs out there).

Here are two ASX share ideas, one being an ETF and one LIC:  

Betashares Global Quality Leaders ETF (ASX: QLTY)

This ETF is invested in quality global businesses which rank well on return on equity (ROE), have low debt levels and display earnings stability.

Betashares Global Quality Leaders ETF is invested in 150 of these global names right across the world. Whilst around two thirds of the ETF is allocated to US businesses, the other third is spread across Japan, Switzerland, France, Denmark, Hong Kong, the UK and so on.

The ETF doesn’t invest in ASX shares – it specifically excludes Australia from the potential investment list.

Betashares Global Quality Leaders ETF is heavily invested in IT and healthcare. These two sectors offer secular growth with many high quality names. The IT sector had a 32.4% allocation at 31 August 2020 whilst healthcare had a 25.7% allocation. The other sectors that make up more than 5% of this ETF’s holdings are communication services, consumer discretionary and financials.

So what businesses actually display these quality credentials? At the end of last month its biggest positions were: Nvidia, Apple, Adobe, Facebook, Intuit, Accenture, Intuitive Surgical, Nike, Alphabet and Texas Instruments.

BetaShares only launched the ETF in November 2018. Over the past year it delivered a net return of 17.6% and since inception it has delivered net returns per annum of 19.6%.

WAM Microcap Limited (ASX: WMI)

WAM Microcap invests in ASX shares with market capitalisations under $300 million.

It’s run by the investment team at Wilson Asset Management. The idea of picking small caps is that they can deliver strong outperformance if you can find an idea whilst it’s still relatively undiscovered or undervalued before its growth story is picked up by the wider market.

WAM Microcap has performed very strongly since inception in June 2017. The WAM Microcap gross portfolio return (before fees, expenses and taxes) over the past year has been 25.4%. Since inception the gross portfolio return has been 21.7% per annum, outperforming the S&P/ASX Small Ordinaries Accumulation Index by 13.3% per annum.

The LIC has been very effective at finding small cap growth opportunities like Citadel Group Ltd (ASX: CGL), Redbubble Ltd (ASX: RBL), City Chic Collective Ltd (ASX: CCX) and FINEOS Corporation Holdings PLC (ASX: FCL).

It would be unwise to expect that WAM Microcap’s long-term performance will continue to be more than 20% per annum. But it shows the level of returns that the WAM team can generate over good periods for the overall ASX share market. It’s quite hard for small caps to outperform when the market crashes.

At the current WAM Microcap share price it’s probably trading at close to its net tangible assets (NTA) per share. It also offers an grossed-up ordinary dividend yield of 5.6%.

Foolish takeaway

Both of these ASX shares seem like good investments to me. WAM Microcap was one of my main buying targets earlier this year. I’d definitely be happy to buy more if there was another market dip.

More reading

• Where I’d invest $20,000 into ASX shares right now
• How to generate $1,000 a month in dividends
• Why Mineral Resources, Redbubble, Saracen, & Temple & Webster shares are pushing higher
• Is the Redbubble (ASX:RBL) share price on a path to $10.75?
• Why I’m more excited about WAM Microcap shares

Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends FINEOS Holdings plc. The Motley Fool Australia has recommended Citadel Group Ltd and FINEOS Holdings plc. 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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