Category: Stock Market

The Transurban Group (ASX: TCL) share price is one to watch in early trade after a quarterly update from the Aussie toll road operator.

Why is the Transurban share price on watch?

Transurban’s March 2021 quarter was headlined by average daily traffic (ADT) increasing 1.1% in 2020 while falling 3.8% compared to 2019 numbers.

Notably, traffic in Sydney recovered to pre-COVID-19 levels as restrictions were broadly lifted for the duration of the quarter. Sydney ADT increased by 21.8% to 936,000 trips with average workday traffic up 20.1%. Average weekend/public holiday traffic increased by 28.1% for the quarter. Both car and large vehicle traffic increased overall traffic numbers across Sydney’s major roads.

Brisbane was another strong market for Transurban during the quarter. Quarterly ADT volumes in Brisbane climbed 3.3% to 403,000 trips with average workday traffic up 2.8%.

The Transurban share price will be worth watching after the company reported a mixed set of numbers across its portfolio. While Sydney and Brisbane performed strongly amid weakened restrictions, Melbourne and North America struggled. Traffic numbers were down across both regions as restrictions and reduced movement persisted.

Melbourne ADT was down 15.2% to 675,000 transactions with average workday traffic down 15.3%. Transurban cited periods of lockdown as a key factor in the softer numbers.

North America ADT fell 26.9% to 101,000 trips during the period with lower numbers in Washington, Virginia and Montreal.

The Transurban share price has climbed 7.3% higher in the last 12 months and boasts a $37.8 billion market capitalisation. Shares in the Aussie toll road operator were smashed in the March 2020 bear market as investors tried to price in the impacts of coronavirus restrictions and widespread work from home orders.

Foolish takeaway

The Transurban share price will be in focus today after a mixed set of traffic numbers in this morning’s update. Stronger Sydney and Brisbane numbers were offset by lower figures across Melbourne and North American markets for the quarter.

More reading

• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
• 2 ASX dividend shares to buy
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• 2 outstanding ASX shares for your retirement portfolio
• Why the Transurban (ASX:TCL) share price is on watch

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part 1 of our interview, SG Hiscock High Conviction Fund portfolio manager Hamish Tadgell reveals which bank makes his mouth water for fat dividends and how he still has a soft spot for a small-cap fibre optics telco.

Transition from hope to growth

The Motley Fool: When you spoke to us in January, you felt like share markets were in a transition from ‘hope’ to ‘growth’. Do you still think that’s the case, or has it moved on to something else?

Hamish Tadgell: I think it is still the case. The growth recovery continues to play out on the back of the [COVID] vaccine rollout, the easing monetary and fiscal policy and the economy’s continuing to reopen. Also, everyone’s learning to live with the virus a little bit better, I think. In terms of not just the social distancing, but just managing that.

The February reporting season was a bit of a litmus test for that growth recovery. That really affirmed that the growth recovery is in train. Sixty per cent of companies beat consensus EPS forecasts. 

Having said that, the other thing which is clearly in play at the moment is rising inflation expectations and views around rising bond [yields]. With that hope to growth, there’s been a pick up in economic growth, and that’s now also fed into questions about ‘Will that deliver rising inflation?’.

This is going to consume a lot of the market’s focus for the next 12 months or so. There doesn’t seem to be a clear consensus on the inflation outlook at the moment. 

The question is: Is it cyclical and related to the reopening and recovery? Or is it more structural in nature? 

I think if you step back, the risk is that inflation expectations have increased, and that’s reflected in building rising bond yields. And shifting expectations actually matter because, at the end of the day, it’s that that really moves markets. 

Great expectations for banks and telcos

MF: What are your two biggest holdings currently?

HT: First of the biggest holdings, in an active sense, is Uniti Wireless, or Uniti Group Ltd (ASX: UWL), as it’s now called. I think we spoke about that last time.

We’ll see it very much as a COVID beneficiary. I think COVID shone the light on the fact that fibre and fibre networks are critical social infrastructure. 

The other thing that is working in Uniti’s favour, at the moment, is the recovery we’re seeing in the housing market – because Uniti basically rolls out fibre to greenfield residential development and high rise apartments. 

Clearly, the high rise has been impacted, but we are seeing continued strong indications and I think the first homeowner initiatives the government’s put in place and the like are clearly driving the resurgence in demand for housing, and we’re seeing that also in house prices as well.

We continue to see Uniti very well-positioned, and it’s a smaller cap stock that’s fast becoming a mid-cap stock. And it’s really being driven by consolidation… it bought OptiComm Ltd, it also bought Telstra Corporation Ltd (ASX: TLS)’s Velocity business. 

Fibre is now seen as social infrastructure, and that’s reflected also in Macquarie Group Ltd (ASX: MQG)’s recent bid for Vodafone. Also, super funds [are] taking a much more active interest in this area.

Our other second largest active position is National Australia Bank Ltd (ASX: NAB). That’s really just a more constructive view on the banks probably since about September, October last year. 

That is reflective of the fact that we’ve come through the pandemic probably better than most would have expected 12 months ago. Loss rates and provisions look like they’ll be lower. The banks have taken significant provisions last year, and we think that some of those will be unwound over the course of the next 12 months. 

Not to say that there won’t be losses and clearly, the JobKeeper unwinding is a risk that you will see more business failures.

But overall, we think that there’s the potential for the banks to release capital [and] increase dividends. And in an environment where rates are rising, albeit modestly, net interest margin [could move] to more neutral – maybe even slightly positive – for the banks.

So we continue to see upside in the banks, particularly on the dividend side.

Tomorrow in part 2 of our interview, Tadgell reveals two ASX stocks that were paralysed in 2020 but are raring to go this year.

More reading

• ASX 200 rises above 7,000, Resolute Mining soars, Galaxy jumps
• 2 fantastic blue chip ASX shares to buy in April
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• 4 reliable ASX dividend shares to buy for income
• ASX 200 rises, Zip (ASX:Z1P) flies, bank ratings upgraded

Motley Fool contributor Tony Yoo owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bank of Queensland Limited (ASX: BOQ) share price will be one to watch on Thursday.

This follows the release of the regional bank’s half year results this morning.

How did Bank of Queensland perform in the first half?

During the first half of FY 2021, Bank of Queensland achieved a 9% increase in cash earnings after tax to $165 million. This was driven by balance sheet growth, improved net interest margin (NIM), disciplined expense management, and lower loan impairment expense.

In respect to its NIM, the bank’s NIM increased by 3 basis points during the half to 1.95%. This improvement was largely due to lower funding costs from reduced deposit rates and lower wholesale funding costs. This was partially offset by asset pricing and mix, and the ongoing impact of the low cash rate.

Other metrics of note include a CET1 ratio of 10.03% (up 12 basis points) and its housing loan growth of 1.6x system.

This solid performance led to the Bank of Queensland board declaring a 17 cents per share interim dividend. This was up 11 cents per share from the prior corresponding period.

The bank’s CEO and Managing Director, George Frazis, said: “In the first half of our 2021 financial year, the BOQ Group has produced another strong performance and is building momentum, demonstrated by an uplift in statutory profit and cash earnings. This has been driven by above system asset growth, NIM improvement, cost discipline, and a strong capital position. These results reflect the Group’s sharp focus on our strategic priorities and the disciplined operational execution of our transformation plan.”

How does this compare to expectations?

The good news for shareholders and the Bank of Queensland share price, is that this result appears to be in line with expectations.

According to a note out of Goldman Sachs, its analysts were expecting a 9% increase in cash earnings to $164 million and a fully franked interim dividend of 17 cents per share.

Outlook

Also potentially giving the Bank of Queensland share price a lift today was its positive outlook commentary. Management appears optimistic on its future and notes that the economic outlook appears more positive and is showing encouraging signs of improvement. In light of this, the bank is guiding to a solid second half performance.

It commented: “We expect to deliver positive jaws of around 1% in FY21, driven by above system growth in lending, NIM positive in FY21 and broadly flat half on half, and cost growth of approximately 3%. BOQ Group remains prudently provisioned for any potential losses arising from the outcomes of COVID-19. We remain committed to sustainable profitable growth, supporting returns to shareholders and a dividend payout ratio target range of 60 – 75% of cash earnings.”

More reading

• 5 things to watch on the ASX 200 on Thursday
• Is the Bank of Queensland (ASX:BOQ) share price in the buy zone ahead of its results?
• This broker expects great things from Bank of Queensland’s (ASX:BOQ) results next week
• Is CBA (ASX:CBA) the best bank for dividends in 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re looking to gain exposure to the small side of the market, then you might want to take a look at the ASX shares listed below. 

Here’s why these three small cap ASX shares could be ones to watch:

Carbon Revolution Ltd (ASX: CBR)

Carbon Revolution is an advanced manufacturing company. It designs, manufactures, and markets single piece carbon fibre wheels for motor vehicles. By manufacturing wheels this way, the company is able to reduce their weight materially. Management estimates that these weight savings can result in up to 40% reductions in inertia, which is a very big deal for car companies that are always looking for ways to make their vehicles more efficient. Among its customers are car giants such as Ford and Ferrari.

Damstra Holdings Ltd (ASX: DTC)

Damstra is a growing integrated workplace management solutions provider. Its cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets. Damstra has been a solid performer over the last couple of years and has continued this strong form in FY 2021. During the first half of FY 2021, the company delivered a 29.6% increase in revenue to $13.3 million. Given that management estimates that its total addressable market will be worth US$20 billion by 2022, this gives it a very long runway for growth. 

Pointerra Ltd (ASX: 3DP)

A final small cap to watch is Pointerra. It is a technology company focused on the global commercialisation of its unique 3D geospatial data technology. Pointerra provides a powerful cloud based solution for managing, visualising, analysing, and sharing massive 3D point clouds and datasets. This solves entrenched problems associated with digital asset management workflows and allows very large 3D datasets to be managed and analysed without the need for expensive and time-consuming high-performance computing. Management estimates that its market opportunity is currently worth an enormous $500 billion annually.

More reading

• 2 highly rated ASX tech shares to buy this month
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• 3 exciting small cap ASX shares that could be destined for big things
• The FINEOS (ASX:FCL) share price is now 30% off its August highs
• What’s happening with the Damstra (ASX:DTC) share price?

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Carbon Revolution Limited and Damstra Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointerra Limited. The Motley Fool Australia has recommended Carbon Revolution Limited, Damstra Holdings Ltd, and Pointerra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Australian real estate prices are skyrocketing, thanks to near-zero interest rates and record household savings built up from the COVID-19 downturn.

Residential housing, especially, is soaring at a speed not seen since the late 1980s.

But if you’re an ASX investor, how do you take advantage of this?

Shaw and Partners portfolio manager James Gerrish last week picked out 3 ASX shares involved in the property market that he sees bright prospects for.

This is what he told his Market Matters (MM) newsletter subscribers:

DEXUS Property Group (ASX: DXS)

Dexus owns and rents out commercial real estate, which obviously took a heavy hit when many Australians started working from home last year.

While there’s uncertainty about what demand for office space will be like in the post-COVID world, Gerrish believes this anxiety is already priced in.

“DXS is trading at a 12% discount to the value of its underlying assets versus an average 8% premium,” he told his subscribers.

“Couple this with a 5.5% projected yield over the coming 12 months and it’s easy to see why we added it to the MM income portfolio last month.”

The stock is currently trading at $10.09, with Gerrish backing it to break $11.

“MM believes that office demand will taper — but not by the magnitude that many think — and there is a natural offset through growth in employment,” he said.

“For most businesses, the office will remain the primary place of work, of course with more flexibility around the edges.”

Goodman Group (ASX: GMG)

A giant of the industrial real estate space, Goodman Group has been a major beneficiary of Australia’s shift to online shopping.

“Goodman is now the largest property company on the ASX with a market capitalisation of around $34 billion — about the same size as Afterpay Ltd (ASX: APT)!” said Gerrish.

The company enjoys a supplier relationship with e-commerce behemoth Amazon.com Inc (NASDAQ: AMZN), providing warehouse space for its Australian operations.

“They are currently building Amazon’s first Australian robotics fulfilment centre in western Sydney — a building the size of 22 football fields manned by around 2,000 robots,” Gerrish told his subscribers.

Unlike many other ASX real estate shares, Goodman does not provide a massive yield. But Gerrish likes its growth prospects.

“MM is bullish GMG targeting a move above $20.”

Goodman shares are currently trading at $18.65.

National Storage REIT (ASX: NSR)

This real estate investment trust is a landlord to a network of about 200 self-storage locations around the country.

Gerrish explained that just over a year ago, there was a 3-way battle to acquire National Storage. Two bidders offered $2.20 per share and a third bid $2.40.

“The deal looked like getting done, however along came COVID and the extreme market volatility saw the bid pulled,” he said.

“Now there’s talk of a revitalised bid and private equity firm Blackstone is also being thrown into the mix.”

The National Storage share price is currently trading at $2.17, offering a 3.41% yield.

More reading

• 2 fantastic blue chip ASX shares to buy in April
• This beaten-down ASX sector could soon be turning the corner
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• The National Storage (ASX:NSR) share price is at a 52-week high. Here’s why

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of AFTERPAY T FPO and Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Earlier this week, buy now, pay later (BNPL) payment provider Klarna Australia announced it has partnered with Flybuys in what the company is calling a “revolutionary” arrangement. But, what does this mean for ASX-listed BNPL shares?

Flybuys, a subsidiary of Coles Group (ASX: COL) and Wesfarmers Ltd (ASX: WES), has agreed to provide Australian Klarna users 3 Flybuys points for each Klarna ‘vibe’ point they transfer into their Flybuys account.

The deal is the first of its kind for an Australia-based BNPL company. Let’s take a closer look at the agreement between Klarna and Flybuys.

What is Klarna?

Klarna Bank is a Sweden-based FinTech company with its headquarters in Stockholm. It made headlines in Australia last year when it teamed up with Commonwealth Bank of Australia (ASX: CBA).

As previously reported by The Motley Fool Australia, Klarna is worth around US$31 billion to US$40 billion.

Every Klarna user gets a trophy

Klarna was the first of its kind to implement its own rewards system, and now it’s the first to implement someone else’s.

Klarna launched its ‘vibe’ rewards club in Australia in October 2020, offering users one vibe for every dollar spent through the BNPL platform. Now, the company has partnered with Flybuys, offering users the option to trade 1 vibe for 3 Flybuys points, though minimum transfer amounts apply.

According to Klarna, the concept encourages responsible spending since customers will only be rewarded for completed payments.

New Australia-based Klarna users who link their Flybuys account with the platform will receive 1500 Flybuys points upon the final payment of their first purchase.

Following the initial bonus, for their first 4 transactions, users must convert 250 vibes into 750 Flybuys points. After that, the next 4 transactions must convert at least 500 vibes into 1500 Flybuys points. Each conversion thereafter must consist of at least 750 vibes, with users receiving upwards of 2250 Flybuys points in return.

Klarna Australia country head Fran Ereira said the partnership is revolutionary:

Our partnership has been proudly designed for modern consumers. Shoppers want more flexibility in payment options so they can get what they want now, but they also want to be rewarded for taking this option. Klarna’s partnership with Flybuys will reward our customers by tripling their points collection and rewards potential.

Flybuys CEO John Merakovsky commented on the partnership, saying:

This partnership with Klarna opens up new opportunities for our members to collect points, and even more ways to be savvy with their shopping and be rewarded for it. We’re incredibly proud to welcome Klarna into the fold as our first buy now, pay later partner.

The partnership is set to take off in May, and all eyes will be on ASX-listed BNPL providers to see if they attempt to follow suit.

Will ASX BNPL companies follow Klarna’s lead?

Some BNPL providers already have their own, internally managed customer reward systems in place.

The largest listed on the ASX is Afterpay Ltd (ASX: APT), which offers top customers access to its Pulse rewards program. Pulse isn’t a points-based system. Rather, after completing 30 purchases through Afterpay and incurring no more than 3 late fees over 6 months, customers are invited to join the program. Pulse provides users with the benefits of more time to make payments, greater buying options and increased flexibility of payment.

The second-largest ASX BNPL provider, Zip Co Ltd (ASX: Z1P), doesn’t currently have a rewards system in place. However, it did offer its users 3% cashback from completed purchases between 16 November 2020 and 8 January 2021.

IOUPay Limited (ASX: IOU), the sixth-largest ASX listed BNPL provider by market capitalisation, has a typical rewards program. Within it, users earn points by shopping with the platform and can redeem them on future purchases through IOUPay.

Only time will tell whether competition among ASX-listed BNPL providers will heat up as a result of Klarna’s partnership with Flybuys, encouraging other big players in the space to seek out similar deals. 

More reading

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in its portfolio.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Capital Limited (ASX: WAM) which targets “the most compelling undervalued growth opportunities in the Australian market.”

The WAM Capital portfolio has delivered an investment return of 16.4% per annum since inception in August 1999, before fees, expenses and taxes. This gross return outperformed the S&P/ASX All Ordinaries Accumulation Index return of 8.4% per annum over the same timeframe.

These are the two ASX shares that WAM Capital outlined in its most recent monthly update:

Link Administration Holdings Ltd (ASX: LNK)

The fund manager explained that Link provides technology-enabled outsourced services for superannuation funds administration and corporation markets, including shareholder management, analytics and share registry services across 11 countries.

It has an underlying stakeholder base of approximately 10 million superannuation account holders and over 30 million individual shareholders globally.

WAM thinks there’s good upside in its 44% stake in Property Exchange Australia Limited (PEXA), it’s Australia’s leading electronic property settlement provider.

The fund manager noted that it has previously announced its intention to maximise value for its shareholders by divesting its holding PEXA.

In the recent half year FY21 result, investors learned that PEXA transaction volumes grew 28% on the previous corresponding period and contributed $18.7 million to the ASX share’s operating net profit after tax and amortisation. PEXA has a market share of over 75% in conveyancing in Australia.

The LIC’s investment team believe that PEXA can expand its technology globally.  

Airtasker Ltd (ASX: ART)

Airtasker isn’t even 10 years old yet, but it listed on the ASX last month and has become Australia’s leading online marketplace for local services with more than 4.3 million registered users according to WAM.

How it works is that the online marketplace connects customers who require a particular task to be completed with those willing to complete a task for payment. There have been approximately 950,000 customers having purchased services on the company’s end to end e-commerce platform from inception to December 2020.

WAM pointed out that Airtasker reported that its unique paying customers had grown from approximately 18,000 in FY15 to approximately 367,000 in FY20, with the average task value increasing from $97 to $159 over that same timeframe.

Thanks to the initial public offering (IPO), the ASX share raised $83.7 million with shares issued at $0.65 per share.

Due to a high level of demand, where the IPO was oversubscribed by five times, the Airtasker share price increased significantly to $1.43 in the first week of trading. However, it has since fallen back to $1.28.

More reading

• Wilson Asset Management to launch new LIC
• 5 things to watch on the ASX 200 on Friday
• 88 Energy and Airtasker were among the most traded ASX shares last week
• Is Canva coming to the ASX?
• The Airtasker (ASX:ART) share price finished 77% higher in March

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 Link Administration Holdings Ltd. The Motley Fool Australia has recommended Link Administration Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re wanting to add a few dividend shares to your portfolio, then you may want to check out the ones listed below.

Here’s why these ASX dividend shares come be worth a closer look:

BWP Trust (ASX: BWP)

BWP is a real estate investment trust with a focus on commercial properties. These properties are predominantly warehouses that are leased to hardware giant Bunnings Warehouse. In fact, BWP is the largest owner of Bunnings Warehouse properties, with a total of 68 properties in its portfolio.

This focus has proven to be highly successful for BWP during the pandemic. Thanks to the strong performance of Bunnings, BWP has been able to collect rent largely as normal. This led to BWP reporting a decent 6% increase in first half profit to $144 million.

In light of its solid form, BWP intends to pay a full year distribution of ~18.3 cents per share. Based on the current BWP share price, this represents a generous 4.5% dividend yield for income investors.

Wesfarmers Ltd (ASX: WES)

Another quality option for income investors to consider is Wesfarmers. It is of course the owner of the aforementioned Bunnings business. It also owns a sizeable stake in BWP.

While Bunnings was the star performer for Wesfarmers during the first half of FY 2021, its other businesses also performed very positively. Combined, this underpinned a 16.6% increase in revenue to $17,774 million and a 25.5% increase in net profit after tax to $1,414 million.

One broker that believes Wesfarmers is well-placed to continue its positive form is Goldman Sachs. It currently has a buy rating and $59.70 price target on its shares.

The broker is also forecasting a fully franked dividend of $1.88 per share in FY 2021 . Based on the latest Wesfarmers share price, this equates to an attractive 3.4% yield.

More reading

• Is Wesfarmers (ASX:WBC) a great blue chip share buy?
• ASX 200 Weekly Wrap: ASX sees 7,000 points once more
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• 2 ASX dividend shares with generous yields to buy now
• How are these ASX 200 retail shares tracking after JobKeeper’s end?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Can Vanguard MSCI Index International Shares ETF (ASX: VGS) be a really great investment idea for diversification purposes?

Firstly, let’s look at why Vanguard is an attractive fund provider. Its aim is to provide leading, low-cost investment products. Vanguard’s ownership structure aligns its interests with investors. The investors are the owners of the business, profits are ‘shared’ in the shape of lower management fees. It’s why Vanguard has some of the lowest management fees in the world.

What’s the Vanguard MSCI Index International Shares ETF?

In Vanguard’s words, the exchange-traded fund (ETF) seeks to track the return of the MSCI World Ex-Australia Index. It provides exposure to many of the world’s largest companies listed in major developed countries.

Strong diversification

There are few investments on the ASX that offer the level of global diversification that this ETF does.

It gives more than 1% exposure to ten countries. As you might expect, the largest country weightings are the US (67.6%), Japan (7.9%), the UK (4.4%), France (3.5%), Canada (3.2%), Switzerland (2.9%) and Germany (2.9%).

But that’s just where the business is listed. Apple and Microsoft might be classified as US businesses, however they generate revenue from most of the world. You can make that point about most of the top ten holdings in the ETF’s portfolio:

Apple, Microsoft, Amazon.com, Alphabet, Facebook, Tesla, JPMorgan Chase, Johnson & Johnson, Visa and Walt Disney. Those positions amount to 17.3% of the total portfolio.

But there’s more to the portfolio than just those 10 names. It actually had 1,530 holdings spread across those major developed countries. There are plenty of large non-US shares in there such as Nestle, ASML, Roche, Novartis, LVMH, Toyota, AIA, SoftBank and Shopify.

Looking at the sector allocations, information technology has the largest position with a 22.3% weighting. Financials (13.1%), health care (12.6%), consumer discretionary (12.2%) and industrials (10.6%) are the other sectors with weightings of more than 10%.

Low fees

The Vanguard MSCI Index International Shares ETF has a low management fee of 0.18%, which is a lot cheaper than most active fund managers that you’d find based in Australia, particularly ones that invest in global shares.

Returns

The ETF’s inception date was November 2014. Since then it has delivered a net return of 11.9% per annum. Its other long-term performance returns have also been double digits. Over the last three years it has delivered an average return of 11.2% per annum and over the last five years it has delivered an average return of 12.4% per annum.

Investment statistics

Vanguard MSCI Index International Shares ETF had a price/earnings ratio of 25.6x at 28 February 2021, with a earnings growth rate of 11.8%. The dividend yield had reduced to 1.8%.

However, it also had a return on equity (ROE) ratio of 15.9%.

More reading

• 3 high quality ETFs for ASX investors to buy
• Is Vanguard International Shares ETF (ASX:VGS) the best on the ASX?
• 2 of the top ETFs for diversification
• 2 quality international ETFs for ASX investors to buy
• 2 excellent ETFs for ASX investors to buy now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was on form and charged higher. The benchmark index rose 0.65% to 7,023.1 points.

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

ASX 200 futures pointing lower

The Australian share market looks set to give back a lot of yesterday’s gain this morning. According to the latest SPI futures, the ASX 200 is poised to open the day 40 points or 0.6% lower. This follows a disappointing night of trade on Wall Street, which saw the Dow Jones rise 0.15%, but the S&P 500 drop 0.4% and the Nasdaq tumble 1% lower.

Zip capital raising

The Zip Co Ltd (ASX: Z1P) share price could return from its trading halt today after announcing the details of its capital raising. The buy now pay later provider is aiming to raise A$400 million via senior unsecured convertible notes due in 2028. The additional capital from the offering will be used to support the active pursuit of both core and international growth opportunities.

Oil prices jump

Energy producers Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a strong day today after oil prices jumped. According to Bloomberg, the WTI crude oil price is up 4.6% to US$62.94 a barrel and the Brent crude oil price has stormed 4.3% higher to US$66.41 a barrel. Increasing demand and a decline in inventories helped drive prices higher.

Gold price falls

Gold miners Newcrest Mining Ltd (ASX: NCM) and Resolute Mining Limited (ASX: RSG) could trade lower today after the gold price softened. According to CNBC, the spot gold price is down 0.6% to US$1,736.90 an ounce. Firmer bond yields have been weighing on the safe haven asset.

Bank of Queensland half year results

The Bank of Queensland Limited (ASX: BOQ) share price will be on watch today when it hands in its half year results. According to a note out of Goldman Sachs, its analysts are expecting the bank to report cash earnings of $164 million. This will be an increase of 9% over the prior corresponding period. The broker expects this to allow the Bank of Queensland board to declare a fully franked interim dividend of 17 cents per share.

More reading

• ASX 200 rises above 7,000, Resolute Mining soars, Galaxy jumps
• 2 outstanding ASX growth shares to buy now
• Could the Galaxy (ASX:GXY) share price be next to raise capital after Zip (ASX:Z1P)?
• Why the Zip (ASX:Z1P) share price is in a trading halt
• 3 latest ASX shares that top brokers have upgraded to “buy” today

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 ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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