Author: therawinformant

The minutes from the Reserve Bank of Australia’s (RBA) 1 September meeting provide some revealing insights into the outlook for ASX shares in the mining sector. Particularly those digging up iron ore.

Atop keeping the official cash rate at the historic current low 0.25% and indicating the RBA is prepared to purchase additional Australian Government Securities (AGS) to maintain the central bank’s 3-year yield target of 0.25%, the RBA dug into China’s rebound from the COVID-19 economic slowdown.

The RBA board concluded that unlike most nations’ recovery paths, China is seeing production rebound much faster than its consumption. The bank points to China’s government policies focusing more support on reviving business investment with less financial support for households.

While this means consumption in China is still below its pre-pandemic levels, Chinese industrial production is back to where it was before the virus shut down many of the nation’s factories.

What does this mean for Australia’s commodities?

According to the RBA, a big change in the demand and supply of commodities has been occurring. The bank noted that iron ore prices have been near multi-year highs. It said that atop the iron ore supply issues hindering output in Brazil, steel-intensive activities in China, like construction, have rebounded quickly, driving strong demand from China.

Despite some wider trade frictions and the viral slowdown in other sectors, the RBA board noted that “Australian exports of iron ore to China had remained resilient in recent months.”

Which ASX shares look to benefit?

With iron ore prices still near record levels (around US$130 per tonne), Australia’s big miners stand to make some outsized profits.

The BHP Group Ltd (ASX: BHP) share price, up 0.7% today, is still down 3.8% for the year. It has, however, come roaring back from its March lows, up 49% from 16 March.

The Rio Tinto Limited (ASX: RIO) share price, down 1.5% today, is up a slender 1.0% for the year. Rio’s share price has also gained strongly since 16 March, up 32%.

Finally, there’s this year’s star player in the big ASX miners’ club, Fortescue Metals Group Limited (ASX: FMG). The Fortescue share price closed almost flat today, but it’s up an impressive 65% so far in 2020.

Now a lot of other factors come into play which will determine these big miners’ future share prices. But Chinese demand driving high iron ore prices is certainly a welcome tailwind for their shareholders.

More reading

• Here’s why Goldman Sachs just upgraded BHP (ASX:BHP) shares to a buy rating
• KGL Resources (ASX:KGL) share price surges on big upgrade
• 3 ASX shares with high-flying dividend yields
• ASX 200 rises by 0.7%, Cleanaway (ASX:CWY) shares dumped
• Leading brokers name 3 ASX shares to buy today

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.

The post Why the RBA’s latest minutes spell good news for these 3 ASX shares appeared first on Motley Fool Australia.

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There has been a lot of talk in the investing town of late as to the probability of another 2020 market crash. That’s what tends to happen when share markets go for a run. And that’s exactly what global markets have been doing for the past six months or so. Since 23 March, the S&P/ASX 200 Index (ASX: XJO) has risen close to 30%.

Over in the United States, things are even hotter. The flagship US index – the S&P 500 Index (SP: .INX) – is up more than 51% since 23 March. And the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) is even higher, up 61% over the same period. With so many investors sitting on some solid gains from these run-ups, there are no doubt some investors growing nervous about their new gotten gains.

And on one level, this is fair enough. Uncertainty still abounds. The pandemic is still with us. Economies around the world are still struggling with some of the worst economic conditions in a century. And we have a highly-watched and consequential US presidential election in less than two months’ time, which is bound to move markets whichever way the chips fall.

But I’ll be staying mostly invested in both ASX and international shares regardless, apart from a small cash position. Why? Well, firstly I think ASX shares are one of the best ways we can build wealth under any circumstances. Over the past 120 years, the ASX has continually moved higher and paid dividends and in doing so, has rewarded long-term investors with inflation-smoking returns. And that’s through the Great Depression, a multitude of wars, the global financial crisis as well as periods of both high inflation and low inflation. Because of this, I will always have at least some of my wealth tied to shares.

But secondly, it’s also because interest rates are at virtually zero. And that makes investing in shares more important and potentially more lucrative than ever.

Implications of a zero interest rate world

Interest rates aren’t just about low rates on your savings account alongside a cheaper mortgage. To explain this, I’ll draw on the wisdom of Warren Buffett, here provided by a Magellan Financial Group Ltd (ASX: MFG) website. Buffett here describes interest rates as ‘gravity’ on all other financial assets:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are, the less that present value is going to be. So every business by its nature … its intrinsic valuation is 100% sensitive to interest rates.

So with interest rates virtually zero around the world (0.25% here in Australia), there is almost no theoretical limit on how much of a premium investors can place today for income in the future (when interest rates might be higher than today).

And that means that investors are likely to continue to pay high prices for shares until rates rise, regardless of the normal ebbs and flows, ups and downs, of the share market. It doesn’t hurt that there are few other real options for yield in a low-rate world either. That means I’ll be investing in shares at full-throttle until rates start going up again. Perhaps you should too!

More reading

• ASX 200 falls slightly, miners surge higher
• Rhinomed (ASX:RNO) share price tries following Starpharma’s path to COVID glory
• The Mesoblast (ASX:MSB) share price surges on award win
• Why the Ramelius (ASX:RMS) share price is at a new all-time high
• Magellan (ASX:MFG) reveals best share buys for September

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.

The post Why you should always invest in ASX shares when interest rates are low appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) dropped slightly by 0.08% to 5,895 points.

ASX miners were the strongest performers today in the ASX 200.

ASX mining industry soars

It was a strong performance by the mining community today.

Gold miners were the top performers with the Silver Lake Resources Limited. (ASX: SLR) share price going up by 8.2%. The Northern Star Resources Ltd (ASX: NST) share price rose by 7.4% and the Perseus Mining Limited (ASX: PRU) share price went up 6.2%.

Other commodity businesses were also top performers. Coal miner New Hope Corporation Limited (ASX: NHC) saw its share price grow by 5.8%. The share price of Perenti Global Ltd (ASX: PRN) went up 5.5%.

However, at the other end of the ASX 200 was the SKYCITY Entertainment Group Limited (ASX: SKC) share price falling by 5%. Other large declines belonged to the Cleanaway Waste Management Ltd (ASX: CWY) share price which fell 4.3% and the Oil Search Limited (ASX: OSH) share price declined 3.4%.

Award win for Mesoblast Limited (ASX: MSB)

ASX 200 biotech business Mesoblast saw its share price rise 3.5% after winning an award.

Mesoblast announced today that its lead product candidate remestemcel-L has been selected as the winner of the Fierce Innovation Awards – Life Sciences Edition 2020.

This award is given to companies that demonstrate innovative solutions, technologies and services that have the potential to make the biggest impact for biotech and pharma companies. The applications were reviewed by a panel of executives from a variety of major biotech and pharma companies including Astellas, Accenture, AstraZeneca, Angiocrine Bioscience, Biotech Research Group, NIHR Clinicals Research Network, Medidata Solutions and PPD.

Mesoblast chief executive Dr Silviu Itescu said: “This important award is recognition of Mesoblast’s leadership as an innovator in the cell therapy industry, and of the potential for remestemcel-L to profoundly impact the lives of children suffering with steroid-refractory acute graft versus host disease.”

Electro Optic Systems Hldg Ltd (ASX: EOS)

The Electro Optic Systems share price went up almost 9% today after announcing a contract win.

It has secured two contracts totalling AU$4.25 million for the supply of R400 remote weapon systems to a European NATO country.

A number of these systems are optimised for integration onto remotely operated combat vehicles and include the remote control units to operate the systems. Both contracts will be delivered this calendar year.

Electro Optic Systems remote weapon systems products are well suited to the emerging market for remotely operated combat vehicles because of their market leading accuracy, reliability and light weight.

The company said it’s participating in a number of tender opportunities for remotely operated combat vehicles capabilities across multiple countries with a sales pipeline in excess of $1 billion. Management said that major awards are possible in the next 12 months.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel Pharmaceuticals share price went up 4% today after announcing that the first patient has been dosed with Scenesse DNA repair program. The company is running to clinical program focusing initially on xeroderma pigmentosum (XP).

Clinuvel clinical operations manager Dr Pilar Bilbao said: “We seek to provide meaningful benefit to XP patients, and these results will serve a wider population of fair-skinned individuals at risk of developing skin cancers. The next 12 months will be exciting for many patients, their families, the clinical experts and our own teams.”

More reading

• Why you should always invest in ASX shares when interest rates are low
• Rhinomed (ASX:RNO) share price tries following Starpharma’s path to COVID glory
• The Mesoblast (ASX:MSB) share price surges on award win
• Why the Ramelius (ASX:RMS) share price is at a new all-time high
• Brokers upgrade Macquarie (ASX:MQG) share price targets despite profit warning

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 Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited and Sky City Entertainment Group 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.

The post ASX 200 falls slightly, miners surge higher appeared first on Motley Fool Australia.

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The ASX banking sector has been one of the worst casualties of the coronavirus pandemic and associated economic damage. The share prices of the big four ASX banks have been a disaster zone in 2020. The best performer has been the Commonwealth Bank of Australia (ASX: CBA) share price, which is ‘only’ down 18.59% year to date. As for National Australia Bank Ltd. (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Limited (ASX: ANZ), the picture is far bleaker. Each of these three ASX bank shares is down roughly 30% year to date.

For any shareholders that bought in this time last year expecting a 6% to 7% fully franked dividend yield, the reality has no doubt been a sobering experience.

Not only have these four ASX giants had their market capitalisations slashed in 2020, the prospects of investors receiving dividend income is also far lower  – for both 2020 and beyond.

A dearth of banking dividends

Once again, shareholders of Commonwealth Bank have faired the best in 2020. CBA was lucky enough to have its interim dividend payment scheduled for February (right before the proverbial hit the fan in March). Shareholders received a $2.31 per share dividend back then and will be fortunate enough to be treated with a final dividend of 98 cents per share later this month on 30 September. That’s a 23.6% haircut form 2019’s dividends, but it doesn’t look too bad when we look at the other three bank shares.

Right off the bat, let’s get this out of the way. Westpac shareholders will not be receiving an interim dividend in 2020 at all. The bank cancelled its interim payout that was due in May. It’s unclear what sort of final dividend shareholders will receive in December.

NAB did pay an interim dividend of 30 cents per share back in July. But this was partly funded by a capital raising and is still a long way from the 83 cents per share the bank paid out in 2019’s interim dividend.

It’s a similar story with ANZ, which will pay a deferred interim dividend of 25 cents per share on 30 September (down from 2019’s 80 cents). Again, it’s unclear what kind of final dividend ANZ and NAB will pay in 2020, but it probably won’t be anything to write home about. It makes ‘dearth’ seem like a good collective noun for ASX bank shares right now.

No growth, no dividends… what do we buy ASX banks for?

Unfortunately, I don’t think there are any good reasons to buy the ASX bank shares right now. I don’t see any meaningful growth avenues over the next few years as our economy struggles with the virus-induced recession. People don’t tend to borrow too much money in a recession, after all. Therefore, I think credit growth will be almost nonexistent for at least a few years.

Interest rates also seem likely to remain at near-zero for a number of years too, if the Reserve Bank of Australia’s minutes are anything to go by. Yes, the bank shares are cheap right now, but they are cheap for a reason. A buy today might pay off handsomely in a decade’s time. But I think that’s a big bet to make, and not one I’m interested in placing.

More reading

• CBA (ASX:CBA) employees angry at ‘disrespect’
• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• Borrowers on loan holidays are ignoring ASX bank communications
• Have we reached “peak” Afterpay (ASX:APT) as its US website growth stalls?
• NAB (ASX:NAB) penalised $57.5 million for ripping off customers

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank 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.

The post With dividends slashed, is there any reason to buy ASX bank shares? appeared first on Motley Fool Australia.

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The Senetas Corporation Limited (ASX: SEN) share price has risen 15.52% today after announcing winning its biggest order to date. By the market’s close, the Senetas share price was trading at 6.7 cents after closing yesterday’s session at 5.8 cents.

What does Senetas do?

Senetas is a developer of high-performance encryption security solutions. The company’s hardware network encryptors aim to protect business and government agencies from damaging security breaches and cyber attacks.

In addition, Senetas’ services segment offers its customers absolute control over file sharing and data sovereignty through its platform ‘SureDrop’.

What did Senetas announce?

Senetas advised it has secured its largest ever single order for its ultra-high speed, 100Gbps ethernet encryptors through its global distributor, Thales. The CN9000 series product will be deployed to secure a Middle Eastern Government agency’s data in transit. 

The gross value of the new order is approximately $2 million. However, after allowing cost of goods and margin to Thales, net revenue to Senetas will be a lesser amount which the company did not disclose.

Unsurprisingly, Senetas CEO, Andrew Wilson, was pleased with the size of the order. He pointed to the realisation of a considerable opportunity that has been building over the past 12 months, and is now delivering. He commented:

With our increased presence in this market, and the potential for new opportunities via the pending European certification and custom algorithm encryptors for Eastern Europe, we continue to see exciting opportunities to further expand the market for Senetas products and expect good growth from these regions over the medium term.

About the Senetas share price

The Senetas share price is down almost 10% from a trailing 12 months. Although the Senetas share price has recovered from its March low of 3.8 cents, it has been a bumpy ride of late for shareholders with fluid gains and falls greater than 15%. With today’s increase in the Senetas share price, the company has a market capitalisation of around $72 million.

More reading

• Why you should always invest in ASX shares when interest rates are low
• ASX 200 falls slightly, miners surge higher
• With dividends slashed, is there any reason to buy ASX bank shares?
• Just how much is a franked dividend worth?
• The best ASX blue chip shares to buy after the market selloff

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.

The post Senetas (ASX:SEN) share price soars 16% on new order appeared first on Motley Fool Australia.

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One of the first questions you will probably be asked right after telling a fellow investor about the yield of an ASX dividend share will be: ‘is it fully franked?’

Australia has an almost unique system of treating dividends for tax purposes known as ‘imputation’ or franking. Franking can be difficult to wrap your head around, but it is also enormously advantageous for a dividend investor.

Therefore, if you invest for dividend income or even just happen to own dividend-paying shares, an understanding of how franking works is essential.

An introduction to fully franked dividends

Unlike most other advanced economies, the Australian Taxation Office (ATO) recognises that dividends are post-tax income.

Let me explain. Most forms of income you can receive are treated as fully taxable by the ATO. That’s everything from wages and salaries to rent from property and interest from savings and loans. But dividends are a little different, and in Australia, they are treated as such.

See, when a company pays a dividend, the money that funds those dividends comes from the company’s profit. In Australia, when a company makes a profit, it must first pay tax (corporate tax) on that money before anything else (including paying a dividend).

As such, the dividends you receive have technically already been taxed once at the corporate level. In other countries (such as the United States), this isn’t recognised. Thus, the recipient of a dividend will have to treat the said dividend as ordinary income for tax purposes and the dividend will effectively be taxed twice.

A uniquely Australian system

But here in Australia, we have the franking system to counter this perceived injustice. Thus, if a company pays a dividend from a taxed profit pool, the dividends will come with a receipt of the tax paid. This receipt is known as an imputation or franking credit. This credit allows the receiver of the dividend to deduct the tax already paid from their own taxable income. This ensures the dividends are only ‘taxed once’.

Not all dividends come with franking though. If a company makes money from overseas (and pays tax overseas), it cannot attach franking credits to any dividends coming from these profits. Likewise if the company pays no tax in the first place. Companies can legally use tax credits from previous losses to avoid paying tax in a given year. If this situation arises, there is no tax paid and therefore no franking available. And some ASX shares don’t even have to pay corporate tax under special arrangements. These include ASX REITs (real estate investment trusts), for example. Thus, any dividend that these companies pay also don’t come franked.

How much is a franked dividend worth?

A franked dividend comes with 2 benefits for a recipient: the cash itself and the franking tax credit. Say an income investor owns a share priced at $100 and giving out an annual dividend of $5 per share. That would give said shares a yield of 5% if the dividends are unfranked. But if the share comes fully franked, the investor is given $5 per share along with a franking credit. If it’s fully franked (coming from a fully-taxed pool of profits), then the investor will receive a $5 per share dividend, along with a franking credit of $2.14. That gives the shares a total (or grossed-up) yield of 7.14%.

The $2.14 franking credit comes from the company paying the full 30% corporate tax rate on $5. This involves the company paying $2.14 in tax for every $5 dividend paid out. You can then take that $2.14 and reduce your own income for tax purposes by the same amount.

And if you’re a person who doesn’t pay tax (like a retiree with a superannuation fund in pension mode), then you get the franking credits back as a cash refund.

Foolish takeaway

In these ways, franking credits are very useful component of our taxation system for income investors and anyone who holds dividend-paying shares. Franking credits aren’t the be-all-and-end-all. But they are certainly something that you should aim to get your head around if you want to get the most out of your ASX dividend shares.

More reading

• Why you should always invest in ASX shares when interest rates are low
• ASX 200 falls slightly, miners surge higher
• With dividends slashed, is there any reason to buy ASX bank shares?
• Senetas (ASX:SEN) share price soars 16% on new order
• The best ASX blue chip shares to buy after the market selloff

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.

The post Just how much is a franked dividend worth? appeared first on Motley Fool Australia.

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The Australian share market has been reasonably volatile over the last few weeks. However, I’m confident this volatility will soon pass and the market will start its ascent again.

In light of this, I think now would be a good time for investors to take advantage of recent market weakness to make some investments.

If you’re looking for ASX blue chip shares, then I think the three listed below would be worth considering:

CSL Limited (ASX: CSL)

The first blue chip to consider buying is CSL. I think the biotherapeutics giant is a great option for investors and well-placed for growth over the coming years.  This is because the majority of its therapies are used for conditions which have no real alternative treatments. In light of this, I expect demand for its therapies to remain strong during the pandemic. This should be supported by increasing flu vaccine sales in the northern hemisphere’s winter. Combined, I’m optimistic they will offset any margin pressure from tough plasma collection conditions. Outside this, I believe its lucrative research and development pipeline and growing plasma collection network will support its growth over the next decade and beyond.

ResMed Inc. (ASX: RMD)

Another blue chip ASX share to consider buying is ResMed. I think the sleep treatment-focused medical device company is exceptionally well-positioned for growth in the 2020s. This is thanks to its industry-leading products, growing ecosystem of connected devices, and its sizeable market opportunity. In respect to the latter, ResMed estimates that there are 936 million people with sleep apnoea globally. It also notes that there are 380 million people suffering from chronic obstructive pulmonary disease (COPD) globally. This gives it a significant runway for growth over the next decade.

Telstra Corporation Ltd (ASX: TLS)

A final blue chip share to buy is Telstra. I’ve been very impressed with the way it has turned around its fortunes over the last 18 months and feel confident a return to growth isn’t too far away. Especially given the arrival of 5G internet, its rampant cost cutting, and the easing NBN headwind. So with its shares trading close to their 52-week low, I think now could be an opportune time to make a patient investment.

More reading

• Rhinomed (ASX:RNO) share price tries following Starpharma’s path to COVID glory
• BrainChip (ASX:BRN) and Zip (ASX:Z1P) were among the most traded shares on the ASX last week
• Are telco shares winners now that everyone’s staying home?
• 3 ASX dividend shares to buy in a downturn
• Top ASX dividend shares to buy in September 2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended ResMed Inc. 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 The best ASX blue chip shares to buy after the market selloff appeared first on Motley Fool Australia.

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The offices of Commonwealth Bank of Australia (ASX: CBA) are not happy places at the moment, with staff angry at their post-COVID-19 pay offer.

CBA has offered a scale of a 2% rise for employees below $75,000 a year and 1.5% for those between $75,000 and $110,000. Those earning more than $110,000 face a wage freeze for at least 12 months.

According to the Finance Sector Union (FSU), Westpac Banking Corp (ASX: WBC) staff are receiving a 3.25% rise, while workers at National Australia Bank Ltd (ASX: NAB) and Bendigo and Adelaide Bank Ltd (ASX: BEN) will enjoy 3%.

‘Disrespectful’ offer rejected

FSU national secretary Julia Angrisano said it was a bitter pill to swallow, considering chief executive Matt Comyn will enjoy a 14% pay rise.

“CBA’s offer is disrespectful to all who have worked harder this year than ever, and staff believe they deserve at least a three per cent pay rise,” she said.

“CBA staff produced the largest banking profits for shareholders and have worked hard to maintain services to customers this year as Covid-19 hit and yet the CBA is short-changing them on pay.”

It’s understood about 30,000 staff members are covered under the FSU enterprise agreement. They collectively rejected the offer after a union briefing this week.

CBA declined to comment to The Motley Fool, citing confidentiality.

How is CBA going?

The bank last month announced a $9.6 billion statutory net profit after tax including discontinued operations, which was up 12.4% year-on-year.

Angrisano was amazed the low-balling could happen at an employer that admitted underpaying staff $57 million.

“When it comes to investors, they can. When it comes to executives, they can. But when it comes to staff, they just won’t,” she said.

“CBA is a leader in the industry, they can absolutely afford to match the competition’s pay increases in recognition of the extraordinary efforts that their staff have put in this year to keep them number one.”

More reading

• With dividends slashed, is there any reason to buy ASX bank shares?
• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• Borrowers on loan holidays are ignoring ASX bank communications
• Have we reached “peak” Afterpay (ASX:APT) as its US website growth stalls?
• Top ASX dividend shares to buy in September 2020

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.

The post CBA (ASX:CBA) employees angry at ‘disrespect’ appeared first on Motley Fool Australia.

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I believe that exchange-traded funds (ETFs) are a great way to generate good returns through easy investing.

With ETFs it’s quite easy just to invest a regular amount like $1,000 a month without needing to do too much thinking about valuations. Most index-based ETFs have lower management fees than active managers too.

There are some ETFs that I’m not a big fan of because they offer low growth potential such as the ASX focused ones like Vanguard Australian Shares Index ETF (ASX: VAS).

Instead, I think there are other ETFs with much better growth potential such as these two:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The world is getting increasingly technological. Think of all of the data that’s stored on databases which are accessible through the internet. Lots of information (and money) is stored by banks, governments, tech giants and so on. That information needs to be completely secure against hackers and criminals.

It’s important that intellectual property remains guarded. Infrastructure such as electrical networks need to be protected. And so on. I think the demand for cybersecurity services will keep rising as cybercrime continues to increase, unfortunately.

BetaShares Global Cybersecurity ETF offers investors exposure to many of the world’s leading cybersecurity companies. It gives exposure to existing global cybersecurity giants as well as emerging players from across the world, though around 87% of the ETF is invested in the US.

Its top holdings include Crowdstrike, Broadcom, Okta, Splunk, Cisco Systems, Zscaler, Cloudflare, BAE Systems, Checkpoint Software Technologies and Booz Allen Hamilton.

The ETF comes with an annual management fee of 0.67% per annum. That’s a high fee compared to some ETFs, but it’s reasonable for what it offers.

Its net returns has been strong since inception in August 2016, with average returns per annum of 18.6%. Over the past year it has returned 18.8% and over the past three years it has returned 22.6% per annum.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

Many of the world’s strongest technology businesses are listed in the US. However, others are listed in Asia. It’s a great region for e-commerce businesses to operate because the Asian population is huge (and growing), the citizens are fairly wealthy and have a high level of technology adoption.

This ETF can give Aussie investors exposure to Asian businesses like Taiwan Semiconductor Manufacturing, Meituan Dianping, Alibaba, Tencent, Samsung, JD.com, Netease, Infosys, Pinduoduo and Xiaomi.

It has 50 holdings which is invested in a variety of different industries including internet and direct marketing retail, semiconductors, interactive media and services and so on.

This is a China-heavy ETF with 54.4% of the investments listed in China at 31 July 2020. Another 22.7% of the ETF is invested in Taiwan. Other places with notable allocations include South Korea, India and Hong Kong.

It has an annual management fee of 0.67% per annum.

The ETF has been a strong performer. Over the three months to 31 August 2020 it generated a net return of 23%, over six months it returned 28.5%, over a year it returned 58.7% and since inception in September 2018 it has returned 28% per annum. Those are very strong returns and highlight the power of China’s e-commerce sector. It has recovered strongly from the COVID-19 impacts.

There are risks when it comes to Chinese investments. Investors need to be aware of the variable interest entity (VIE) structure, but I think it’s worth a small-ish spot within a portfolio.

Foolish takeaway

I really like both of these ETFs. They offer diversification to businesses that many popular ETFs don’t give a meaningful investment into. Both ETFs have performed strongly and could keep going higher. The Asian ETF probably has better growth potential, but the cybersecurity one doesn’t come with the Chinese risks, so I’d probably go for that one first.

More reading

• Where to invest $20,000 into ASX shares right now
• 3 exotic ASX tech ETFs you might want to add to your portfolio today
• 3 ASX high-growth ETFs growth investors can’t ignore
• 5 ASX shares I will never sell
• New to investing? ASX growth shares to buy now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia owns shares of BETA CYBER 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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The Rhinomed Ltd (ASX: RNO) share price surged to a six-month high as it takes a leaf out of the Starpharma Holdings Limited (ASX: SPL) playbook.

The Rhinomed share price rallied 84% ahead of the market close to $0.14 after management said it was developing a COVID-19 nasal swab.

In contrast, the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) are flip flopping on both sides of breakeven.

Rhinomed share price charges higher on COVID test

Any company involved in a coronavirus test or treatment have seen their share price rocket. The Starpharama share price has also been on a tear after it revealed plans for a nasal spray that works against the virus that causes COVID-19.

Rhinomed’s “high yielding” swab that can collect samples from the nose to test for the presence of upper respiratory tract diseases, including influenza and coronavirus strains.

While there are plenty of swabs that are currently available on the market, Rhinomed believes its expertise in making anti-snoring and sleep improvement nasal devices will help it create a superior product.

A better mousetrap?

The company is designing a swab that will be more comfortable to use than standard swabs and can be self-administered.

The new swab will also collect samples from both nostrils at the same time and over a greater surface area.

“The vast majority of existing nasal swabs require a healthcare worker to collect the sample, which places the healthcare worker at a real risk of infection,” said the company in its ASX statement.

“The use of healthcare workers and the requisite personal protection equipment (PPE) also comes with significant cost.”

Next steps

Rhinomed is exploring manufacturing options. This could include 3D printing solutions, existing offshore manufacturing resources and local manufacturing alternatives.

The swab will be registered in Australia, US and in the European Union as a Class 1 medical device. The company has begun defining the protocol for a clinical trial to be carried out at a leading Melbourne hospital.

RNO share price up investors’ nose

But even with the big gain in the stock today, the stock is still nursing a 40% loss in value over the past year.

In contrast, other medical device stocks have performed much better. The RESMED/IDR UNRESTR (ASX:RMD) share price gained 23% while the Somnomed Limited (ASX: SOM) and Nanosonics Ltd. (ASX: NAN) share price dipped around 8% each.

More reading

• The Mesoblast (ASX:MSB) share price surges on award win
• Why the Ramelius (ASX:RMS) share price is at a new all-time high
• Brokers upgrade Macquarie (ASX:MQG) share price targets despite profit warning
• ASX 200 flat: Afterpay (ASX:APT) rebounds, Cleanaway (ASX:CWY) sinks, big four banks lower
• KGL Resources (ASX:KGL) share price surges on big upgrade

Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited and Starpharma Holdings Limited. The Motley Fool Australia has recommended Nanosonics Limited, ResMed Inc., and Starpharma Holdings 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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