Category: Stock Market

Exchange traded funds (ETFs) can be a fantastic way to balance out your portfolio. This is because ETFs provide investors with easy access to a large and diverse group of shares that you wouldn’t normally have access to.

With that in mind, I have picked out two ETFs that are popular with investors right now. Here’s what you need to know about them:

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

The first ETF to consider is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to a portfolio of the largest companies involved in video game development, eSports, and gaming related hardware and software globally.

The fund manager points out that these companies are well-placed to benefit from the increasing popularity of video games and eSports.

In addition to this, VanEck believes this ETF would be a good option for investors that already have exposure to FAANG stocks or want alternative options in the tech sector.

Among the fund’s largest holdings are graphics processing units giant Nvidia and games developers Take-Two Interactive (GTA, Red Dead), Electronic Arts (FIFA, Sims, Apex Legends), and Activision Blizzard (Call of Duty).

Vanguard MSCI Index International Shares ETF (ASX: VGS)

If diversification is your aim, then you’ll find it hard to beat the Vanguard MSCI Index International Shares ETF.

This ETF gives investors a slice of over 1,500 of the world’s largest listed companies from major developed countries.

This means you’ll be buying global giants such as Amazon, Apple, Facebook, Home Depot, Johnson & Johnson, Nestle, Procter & Gamble, Tesla, and Visa.

Vanguard believes that this ETF would be suitable for buy and hold investors that are seeking long-term capital growth, international diversification, and some income. In respect to the latter, the fund currently offers a 1.6% dividend yield.

The post 2 quality ETFs that could give your portfolio a boost appeared first on The Motley Fool Australia.

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Legendary investor Jeremy Grantham is warning anyone who’ll listen that share markets have formed a big bubble about to burst.

The co-founder of GMO said it in January, then reiterated it again this week at an Australian investor conference.

“The Nasdaq Composite (INDEXNASDAQ: .IXIC) peaked quite a long time ago,” he said this week.

“Maybe in a few months the termites might get to the rest of the market.”

According to Grantham at the start of the year, the market was characterised by “extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior”.

“I believe this event will be recorded as one of the great bubbles of financial history – right along with the South Sea bubble, 1929, and 2000,” he said.

“Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives.”

Grantham is famous for predicting the dot-com bust and global financial crisis crash, so people listen when he speaks.

But one investment executive reckons the perma-bear deserves to be completely ignored.

If you’re always a bear, you’ll be right some of the time

The trouble with bears, according to Bell Potter director Richard Coppleson, is that they will be smug from inevitably being right some of the time.

If you keep saying every 6 months the market will crash, you are not actually predicting anything. You’ll merely be correct some of the time because the market naturally goes through ups and downs.

“In an article I read about 8 months ago, several well-known fund managers were warning that dark times were coming and that this rally had gone too far,” he posted on Livewire.

“But then I stopped and thought, ‘Hey wait a minute — I actually read the exact same stuff from most of these fund managers 11 months ago, 8 months ago, 5 months ago and again now.’”

And this behaviour is exactly what Coppleson accuses Grantham of doing.

“It’s worth realising he has been a bear for a very long time,” said Coppleson.

“Given we see these falls every decade or so (1987, 2000, 2008/2009, 2020), it’s only a matter of time until he is ‘proven right’ (and then the media will proclaim that ‘he picked it’).”

To demonstrate, he noted Grantham famously predicted doom for equities in 2010, 2011, 2012, 2013, 2014 and 2015.

“So if one day we see another market crash of say -25% or more, then he would be proven 100% correct and be able to claim he called it.”

Coppleson said that if an investor listened to Grantham and held back for the last 10 years, they would have missed a 265% return on the US market, not even including dividends.

“Right now many are ‘nervous’ after his big call – but it’s the same call we have heard now for at least 10 years.”

Pre-COVID forces will be back

Two Australian experts thought that the current ‘inflation fear’ conditions would not last.

Technology and automation is taking over human labour, and that will drive prices for consumers down in the long run.

“It is important for investors to remember the long-term narrative,” said Montgomery Investments chief investment officer Roger Montgomery.

“Inflation will bounce around in the short and even medium term but structurally it appears to be heading interminably down. Lower inflation appears to be a structural reality.”

Forager Funds chief investment officer Steve Johnson agreed that, while the market’s already seen “a violent sell-off” of growth stocks, they will not be in permanent decline.

In fact, it’s a nice time to buy.

“We’ve got a good list of probably 8 to 10 businesses that we’d love to own at the right price that are a lot closer to it today,” he told a Forager video.

“So if this goes on for a few more months, you can expect to see a few more new names in the Australian Fund portfolio.”

The post Why Jeremy Grantham is wrong about a share market bubble appeared first on The Motley Fool Australia.

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If you’re fed up with low interest rates, you’re not alone. But don’t worry, because the Australian share market is here to save the day with its countless dividend options.

Two ASX dividend shares that can help you beat low interest rates are listed below:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to consider is the Charter Hall Social Infrastructure REIT. It is a high quality real estate investment trust with a focus on properties with specialist use, limited competition, and low substitution risk.

Among its portfolio you will find bus depots, police and justice services facilities, and childcare centres. In respect to the latter, the Charter Hall Social Infrastructure REIT is actually the largest owner of early learning centres in Australia. At the last count, it actively partnered with 35 high quality childcare operators.

The Charter Hall Social Infrastructure REIT has been in strong form this year, reporting a 14.1% increase in operating earnings to $29.1 million during the first half. This allowed management to upgrade its FY 2021 distribution guidance to 15.7 cents per unit.

Based on the current Charter Hall Social Infrastructure share price, this represents a 4.6% yield.

Westpac Banking Corp (ASX: WBC)

Another dividend share to look at is Westpac. Australia’s oldest bank has had a tough few years, but looks well-placed for growth again. This is thanks to improving trading conditions, a booming housing market, cost cutting, and the relaxing of responsible lending rules.

It was thanks to these factors that the banking giant smashed expectations during the first half of FY 2021. For the six months ended 31 March, Westpac reported cash earnings of $3,537 million. This was a 256% increase over the prior corresponding period and a 119% lift over the second half of FY 2020.

Analysts at Citi are positive on Westpac and have recently retained their buy rating and $29.50 price target on the company’s shares. The broker is also forecasting fully franked dividends per share of $1.16 and $1.18 over the next two years.

Based on the latest Westpac share price of $26.50, this will mean yields of 4.5% and 4.7%, respectively.

The post 2 ASX dividend shares that could help you beat low interest rates appeared first on The Motley Fool Australia.

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On Thursday the S&P/ASX 200 Index (ASX: XJO) was on form again and charged to a new record high. The benchmark index rose 0.6% to 7,260.1 points.

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

ASX 200 expected to edge higher

The Australian share market looks set to end the week on a subdued note. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points higher this morning. This is despite it being a poor night of trade on Wall Street, which saw the Dow Jones fall 0.1%, the S&P 500 drop 0.35%, and the Nasdaq tumble 1% lower.

Oil prices rise

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) will be on watch after oil prices edged higher. According to Bloomberg, the WTI crude oil price is up 0.1% to US$68.88 a barrel and the Brent crude oil price is up slightly to US$71.36 a barrel. A mixed US inventory report held back oil prices.

Tech shares on watch

Australian tech shares such as Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) could come under pressure today after their US counterparts were sold off overnight. The tech-heavy Nasdaq index fell 1% after investors rotated into cyclical stocks. As the local tech sector has a tendency to follow the Nasdaq’s lead, it doesn’t bode well for Friday’s trade.

Wesfarmers given buy rating

The Wesfarmers Ltd (ASX: WES) share price is in the buy zone according to analysts at Goldman Sachs. In response to its strategy update on Thursday, the broker has retained its buy rating and $59.70 price target. Goldman notes that key priorities have been aligned towards developing a market leading data and digital ecosystem, investing in platforms, and accelerating the pace of continuous improvement.

Gold price sinks

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could end the week in the red after the gold price sank. According to CNBC, the spot gold price is down 1.9% to US$1,873.20 an ounce. A strong US dollar put pressure on the safe haven asset.

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

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The Australian Clinical Labs Ltd (ASX: ACL) share price climbed to a new high of $3.88 during trading today. This follows the pathology service provider’s announcement that it has upgraded its earnings forecast for the 2021 financial year.

At close of trading, the company’s shares had lowered slightly to $3.74, but were still up 5.35%.

What did Australian Clinical Labs announce?

Investors drove up the Australian Clinical Labs share price after the company provided an improved performance outlook.

In a statement to the ASX, the company stated it had exceeded its original projections in the prospectus released in late April.

The revised FY21 guidance is forecasting total revenue of between $657.7 million and $663.3 million. This is up to 3% higher than the $647 million projected in the prospectus.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is also expected to surge by between $217.4 million and $222.3 million. The adjusted result reflects a lift of up to 7% on the $207.7 million assumed in April.

And lastly, net profit after tax (NPAT) is predicted to jump by between $82 million and $85.4 million. In comparison to the $74.5 million stated in the prospectus, this is an increase of up to 15%.

Australian Clinical Labs noted the boost in numbers was driven by revenue growth, with costs kept in line or below the prospectus forecasts. In addition, the prospectus contained just 7 months of actual result, with the 5 remaining months based on company projections.

Australian Clinical Labs CEO and executive director Melinda McGrath commented:

We are pleased with the positive momentum across the business despite the continued uncertainties arising from COVID-19. It is anticipated that the FY21 pro-forma NPAT will be 10% to 15% higher than the FY21 forecast disclosed in the prospectus.

Share price snapshot

Australian Clinical Labs is a leading provider of pathology services in Australia. The company has 86 laboratories accredited by the National Association of Testing Authorities and performs a comprehensive range of services for doctors, patients and corporate clients. 

Since listing on the ASX in mid-May at a price of $4 apiece, Australian Clinical Labs shares are slightly down.

Australian Clinical Labs has a market capitalisation of roughly $760 million, with more than 201 million shares outstanding.

The post Why the Australian Clinical Labs (ASX:ACL) share price soared 5% today appeared first on The Motley Fool Australia.

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The tech sector has been underperforming in recent months. While this is disappointing, it has potentially created a buying opportunity for patient and long term focused investors.

Two ASX tech shares that are trading notably lower than their 52-week highs are listed below. Here’s what you need to know about them:

Adore Beauty Group Limited (ASX: ABY)

The Adore Beauty share price is down 44% from its 52-week high. This could make it worth considering an investment in Australia’s leading online beauty retailer according to analysts at Morgan Stanley.

Late last month, the broker retained its overweight rating and $5.00 price target on its shares.

While Morgan Stanley suspects that Adore Beauty’s growth may slow materially in the near term as it cycles heightened sales during the pandemic, it remains positive on the long term. This is due to Adore Beauty being the leader in a structural growth market.

The Adore Beauty share price is currently trading at $4.14.

Appen Ltd (ASX: APX)

Another beaten down ASX tech share to look at is Appen. The artificial intelligence (AI) data annotation products and solutions provider’s shares are down 70% from their 52-week high.

This has been driven partly by concerns over demand for its services from some of its largest customers (due to COVID-19 headwinds) and its ability to achieve guidance in FY 2021.

While the near term could be tough, its long term outlook appears positive due to its leadership position in a growing market. Appen also has a strong position in the government sector thanks to its acquisition of Figure Eight. This is a big positive as governments across the world are investing billions into AI.

Late last month, analysts at Ord Minnett put a buy rating and $24.75 price target on the company’s shares. This compares to the latest Appen share price of $13.06.

The post 2 beaten down ASX tech shares that could be in the buy zone appeared first on The Motley Fool Australia.

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Betashares Asia Technology Tigers ETF (ASX: ASIA) could be one of the most interesting exchange-traded funds (ETFs) to think about right now.

It’s an ETF that’s offered by Betashares, one of the largest providers in Australia. As the name might suggest, it is focused on Asian technology businesses.

Here are a number of factors why it could be a useful consideration:

Asian exposure

As Betashares points out, this ETF gives exposure to 50 leading technology businesses in Asia. Technology is under-represented in Australia compared to other global share markets.

The ETF can be used to provide a complement for investors that already have an existing allocation to US-listed technology businesses.

This investment gets ASX investors access to different areas such as e-commerce, telecommunications, IT, software, data processing and computer communications industries in Asia, excluding Japan.

According to BetaShares, Asia has a younger and more tech-savvy population which means that its population is leading the way in terms of technological adoption. That’s why the Asian tech sector is expected to remain a growth sector.

China is expected to have over 1.1 billion internet users by 2025.

Strong businesses

The businesses in Betashares Asia Technology Tigers ETF’s portfolio are some of the strongest in the world at what they do.

Looking at the holdings of this ETF, its biggest 10 positions are: Tencent, Taiwan Semiconductor Manufacturing, Alibaba, Samsung Electronics, Meituan, Pinduoduo, JD.com, Sea, Infosys and Netease.

Alibaba is the world’s largest retailer, its online sales and profits reportedly surpassed all US retailers combined in 2015. Tencent is the owner of Wechat, the most popular social app in China. Samsung is one of the world’s biggest smartphone manufacturers. Baidu, another holding, is the number one search engine in China with a 55% market share. Taiwan Semiconductor Manufacturer is the world’s largest dedicated independent semiconductor foundry with customers like Nvidia and Qualcomm.

Historical returns

Past performance is not an indicator of future performance. But it can show the type of growth and investor excitement that an investment has seen over a given timeframe.

Since inception in September 2018 to 30 April 2021, the Betashares Asia Technology Tigers ETF had delivered a net return of 30.5% per annum. That’s including the annual management fee of 0.67% per annum.

The index that the ETF tracks has been around for longer than three years – over the last five years that index has returned an average of 27.2% per annum.

The post 3 reasons the Betashares Asia Technology Tigers ETF (ASX:ASIA) could be a compelling buy appeared first on The Motley Fool Australia.

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Woodside Petroleum Limited (ASX: WPL) shares finished up today despite the Conservation Council of Western Australia (CCWA) releasing its findings on the company’s Scarborough project.

By today’s market close, the Woodside share price was trading at $23.85 – up by 3.11% for the day.

Scarborough is a joint project between Woodside Petroleum and BHP Group Ltd (ASX: BHP). It’s set to target a liquified natural gas (LNG) resource off the coast of Western Australia. Woodside Petroleum is seeking a final investment decision on the project in the second half of 2021.

The CCWA states the project will have major impacts on WA’s environment and World Heritage sites. It has begun WA Supreme Court action to overturn the approvals given to the companies to build the project.

Let’s look at the CCWA’s report into the project’s impacts.

The Scarborough project’s potential impacts

According to the CCWA, the Scarborough project will produce as much greenhouse gas as 15 new coal fired power stations. It will also increase WA’s carbon emissions by almost 5%.

The Scarborough project has received approvals from both the Western Australian Environmental Protection Authority and the Commonwealth Department of Agriculture, Water and the Environment.

Woodside Petroleum has previously stated LNG has an important role in minimising Australia’s future greenhouse gas emissions. The company has also set up a carbon offset project which it says has already created more than 850,000 tonnes of carbon offsets.

The CCWA found these offsets only target a portion of the project’s future carbon emissions and aren’t as effective as the company had hoped.

Additionally, the CCWA stated WA’s LNG industry is producing damaging acids within the globally significant Indigenous heritage site, the petroglyphs of Murujuga on the Burrup Peninsula.

Through freedom of information, the CCWA retrieved Department of Environment and Energy notes stating the department recognised that noxious emissions from LNG production may impact the petroglyphs by speeding up their weathering.

But according to the Woodside Petroleum website, there is no peer-reviewed evidence finding LNG production has any effect on rock art on the Burrup Peninsula.

Finally, the CCWA reported the Scarborough project’s dredging needs, dumping operations, and shipping channels will negatively impact WA’s marine diversity.

Woodside Petroleum is yet to respond to the CCWA’s report.

Woodside Petroleum share price snapshot

Today’s gains have helped boost the year-to-date gains for the Woodside share price. Currently, the company’s shares are trading 4.88% higher than they were at the start of 2021. They’ve also gained 1.49% since this time last year.

The company has a market capitalisation of around $23 billion, with approximately 963 million shares outstanding.

The post Woodside (ASX:WPL) share price climbs despite damning conservation report appeared first on The Motley Fool Australia.

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The Bega Cheese Ltd (ASX: BGA) share price has closed higher today after the company provided an update on its legal proceedings with US food and beverage giant Kraft Heinz Co (NASDAQ: KHC).

The dairy and food manufacturer’s share price finished the day up by 0.86% at $5.85.

Going nuts over labelling

It’s been a long road for Bega but it appears to be the end of Kraft’s tantrum. It all began when ASX-listed Bega Cheese acquired the peanut butter business from Mondelez Australia in 2017.

While the acquisition itself posed no issues, the labelling of the peanut butter jars did – well, Kraft Heinz thought so. See, branding is everything and the iconic yellow label and lid of Kraft looked very similar to what Bega acquired.

Four years seems to have been enough for Kraft to concede. Judgements handed down during the past twelve months have all ruled in Bega’s favour. These judgements confirmed the Aussie company had the right to use the current packaging for its smooth and crunchy peanut butter.

However, today’s announcement says Kraft has entered a confidential settlement regarding the issues of monetary relief and legal costs payable in respect of the proceedings. As part of the settlement, the US giant will pay $9.25 million.

Furthermore, all legal proceedings will be discontinued once Bega receives the payment. Kraft shouldn’t have any problems with coughing up $9.25 million. Over the last 12 months, the company has made US$541 million in earnings.

How has the Bega share price been doing?

Unfortunately for Bega shareholders, the cheesemaker has underperformed the S&P/ASX 200 Index (ASX: XJO) in the last year. While the benchmark returned a mighty 22.2%, Bega climbed 16.17%. Still, that’s not a bad return, especially when dividends are factored in — taking it to around 18%.

However, the dairy food producer has had a rough couple of months. The Bega share price is down more than 10% since 21 April 2021. That’s when the company disclosed that an agreement had been terminated, removing access to a spray dryer and finishing plant it had sold in 2017.

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