Category: Stock Market

The S&P/ASX 200 Index (ASX: XJO) has bounced back from a poor start and is pushing higher in late morning trade. At the time of writing the benchmark index is up 0.2% to 5,936.6 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Afterpay Ltd (ASX: APT) share price is down 3.5% to $75.47. Investors have been selling the payments company’s shares and other tech companies once again on Monday. This follows a further selloff on the tech-heavy Nasdaq index on Friday night. The S&P/ASX 200 Information Technology index is down 1.5% at the time of writing.

The ASX Ltd (ASX: ASX) share price has fallen almost 2.5% to $83.93. The catalyst for this decline is the stock exchange operator’s shares trading ex-dividend this morning for its final 122.5 cents per share fully franked dividend. Eligible investors can  now look forward to being paid this dividend at the end of the month on 30 September.

The Mesoblast limited (ASX: MSB) share price is down over 2.5% to $4.82. This is despite there being no news out of the biotechnology company today. I suspect this decline could be attributable to profit taking after some very impressive gains over the last few months. Even after today’s decline, the Mesoblast share price is up a staggering 135% since the start of the year.

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has fallen 2.5% to $5.72. Investors appear to be selling the airport operator’s shares after the Victorian government announced plans to extend its lockdowns. This is likely to mean that air travel between Melbourne and Sydney will continue to be subdued for some time to come. This extension could push back the airport’s recovery from the pandemic.

More reading

• Share price opportunities to buy this week
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• Where to invest $500 into ASX shares right now
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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There are some ASX shares that I’d happily invest in for my portfolio every month.

I think a regular investment strategy can be very effective. You just need to pick the right shares. Individual businesses like Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU) can see their share prices move significantly in a relatively short amount of time. This can change if they’re good value or not. 

However, there are some ASX shares that offer good diversification and I’d happily invest in them every month:

BetaShares Global Quality Leaders ETF (ASX: QLTY)

I think that quality businesses can deliver outperformance in both good times and bad times. To make it into the holdings of this exchange-traded fund (ETF) businesses have to rank well on four key metrics: return on equity (ROE), debt to capital, cash flow generation ability and earnings stability.

If companies rank well on all of these metrics then you can see why they’d probably generate solid shareholder returns.

This ETF comes at an annual cost of just 0.35% per annum. That’s pretty cheap considering what it does. It doesn’t invest in ASX shares, it provides exposure to global shares.

Some of the companies in its holdings are: Apple, Nvidia, Adobe, Facebook, Intuitive Surgical, Accenture, Intuit, Nike, Alphabet and Texas Instruments. I like that its holdings aren’t limited to just one country.

The returns have been strong since inception in November 2018, it has delivered returns of 18.8% per annum. That’s strong considering it includes the period of the COVID-19 crash.

Magellan High Conviction Trust (ASX: MHH)

This is a listed investment trust (LIT) which invests in the highest-quality businesses that it can find at a good price.

It maintains a portfolio of a limited number of names, around 10 or so, which it has strong conviction in. It also doesn’t invest in ASX shares, it picks businesses that are listed in other places like the US or Asia.

Some of its highest-conviction picks are: Alibaba, Alphabet, Microsoft, Tencent and Facebook. These are great businesses with strong operating models. They have been able to continue to generate good earnings through this hard COVID-19 period.

Over the long-term Magellan High Conviction Trust’s picks could be long-term winners.

At the current Magellan High Conviction Trust share price, it’s trading at 4% discount to its net asset value (NAV) per unit. Since inception in October 2019 it has returned 10.4% per annum after fees.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

Ethical investing is growing in popularity. But picking ‘ethical’ businesses doesn’t mean sacrificing returns. This ETF, which is all about picking sustainable businesses, has performed very strongly.

Since inception in January 2017, BetaShares Global Sustainability Leaders ETF has returned an average of 20.3% per annum.

The businesses in this ETF have been identified as climate leaders and also exclude ‘irresponsible’ companies that don’t match a wide set of ESG criteria. Its annual fee of 0.59% is very reasonable in my opinion.

This ETF also doesn’t invest in ASX shares, it just sticks to global names. Its top holdings include names like Apple, Nvidia, Mastercard, Visa, Home Depot, Adobe, Paypal, Tesla, Netflix and Toyota.

I really like that BetaShares Global Sustainability Leaders ETF’s portfolio has a 38% information technology allocation. This is the sector that’s likely to generate the most growth, so I’m glad that it has the biggest allocation. The next biggest exposure is healthcare with a 15.9% holding.

Over 70% of the ETF’s holdings are listed in the US – though many of them have global customer bases. It’s also invested in businesses located in Japan, Switzerland, the Netherlands, France, Hong Kong, the UK, Germany, Canada and so on.

Foolish takeaway

I like each of these ASX shares as an idea to get global diversification. I’d be happy to buy any of them at the current prices, particularly as the Australian dollar has strengthened against the US dollar. If I had to pick one it would be BetaShares Global Sustainability Leaders ETF for the larger number of holdings and strong focus on tech shares.

More reading

• 3 ASX shares to buy for international growth
• Where I’d invest $10,000 right now in ASX shares
• 2 ASX shares I’d invest $1,000 into EVERY month
• Where I’d invest $10,000 today into ASX shares
• Magellan’s top fundie Hamish Douglass names August share picks

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric-car maker Tesla Inc (NASDAQ: TSLA) soared 74.2% in August, according to data provided by S&P Global Market Intelligence. On the last day of the month, Tesla’s stock split five for one.

Tesla’s shares closed out the month at $498.32 per split-adjusted share. Pre-split, that would have been a share price of $2.491.60. On July 31, its shares closed at “just” $1,430.75. This continued Tesla’s 2020 winning streak: The company’s stock price appreciated nearly 500% between 1 January and 31 August. 

So what

August brought a mixed bag of news for Tesla the company. On the one hand, it was reported that Panasonic was increasing its investment in Tesla’s Gigafactory 1 by $100 million. On the other hand, the company encountered some setbacks in China. 

But who am I kidding? Tesla’s incredible share price jump was due almost entirely to its decision to split its stock. All of the stock’s gains occurred between the company’s 11 August announcement that it would split its shares five for one, and its first day of post-split trading, 31 August. 

A stock split doesn’t affect the value of individual investors’ holdings, and with many brokers offering fractional shares, a high share price isn’t the barrier to ownership that it once was. Still, many investors balk at plunking down four figures for a single share, so Tesla’s decision was seen as likely to entice a lot of new investment.

That may have been a self-fulfilling prophecy: Expecting a huge windfall on 31 August, investors began piling into the stock. That drove the price higher, which prompted more interest driven by fear of missing out. It all culminated in the first post-split day itself, when a record 118.4 million shares changed hands (about double Tesla’s previous volume record, set in February). 

Now what

Now investors are taking their profits: Tesla’s shares are down nearly 20% so far in September. It’s not really surprising. Investors bought the car maker’s stock at ridiculously high valuations expecting a big payday on 31 August. Once those bets paid off, all that was left was that ridiculously high valuation. Now that the stock price has started dropping, short-term investors are getting out to protect their gains. 

Honestly, now’s probably a decent time to take some profits from Tesla. Even with recent drops in share price, the stock is still up more than 350% year to date, and more than 700% over the last five years. Tesla’s price is so divorced from any traditional valuation metrics that it’s impossible to know where it’s likely to end up in a month, let alone a year or two. 

But nothing fundamental has changed about the company itself or its operations, so investors shouldn’t feel the need to follow the crowd to the exits if they’re still bullish on the stock.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 4 things learned from Apple and Tesla stock splits
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• After the crash, is it time to buy this Nasdaq ETF?
• NASDAQ plunges 5%. What next?
• Is the Nasdaq’s 600-Point Plunge the End of the Bull Market?

John Bromels owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Biotron Limited (ASX: BIT) share price has rocketed higher on Monday after the release of an update.

In early trade the clinical stage biotechnology company’s shares were up as much as 47% to 14 cents.

They have since given back much of these gains but are still up 18% to 11.3 cents at the time of writing.

What did Biotron announce?

This morning Biotron provided the market with an update on the screening of select compounds against SARS-CoV-2 – the coronavirus that causes COVID-19.

According to the release, the company has concluded the first stage of its screenings and found that several compounds have been shown in laboratory cell-culture studies to have antiviral activity against SARSCoV-2.

These assays were run in Melbourne under contract by an Australian NATA accredited clinical trial speciality laboratory, 360biolabs.

A total of 47 Biotron compounds were screened in an industry standard cytopathic effect (CPE) cell-culture assay. The compounds which demonstrated promising activity in the first assay then underwent confirmatory testing in a second anti-SARS-CoV-2 assay.

This led to a subset of 15 compounds that had activity against SARS-CoV-2 being successfully identified.

Biotron’s Managing Director, Michelle Miller, commented: “The results to date are encouraging. There is a need for new ways to treat this disease, and Biotron believes that these results open up a promising new therapeutic pathway. The results underscore the versatility of Biotron’s approach to designing and developing drugs to target serious virus infections.”

What now?

The company advised that its focus will now be on building on this preliminary stage screening program to include a new series of recently designed and synthesised compounds.

Screening of these additional new compounds is expected to conclude before the end of 2020.

Management hopes that within these new compounds there will be potent, druggable compound that can be progressed to testing in animal models of COVID-19 disease and ultimately clinical trials.

Also pushing higher this morning following a COVID-19 related update is the CSL Limited (ASX: CSL) share price. It has signed an agreement to supply Australia with vaccines next year.

More reading

• How to invest in coronavirus vaccine stocks
• Why Afterpay, ASX, Mesoblast, & Sydney Airport shares are dropping lower
• 3 ASX shares I’d happily buy every month
• Why Tesla shares skyrocketed in August
• 4 of the best ASX shares to buy before 2021

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 has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you have any spare cash sitting in your account, now would be the time to invest in these quality ASX shares. As the S&P/ASX 200 Index (ASX: XJO) fell heavily last Friday and is down again today, I don’t believe these ASX shares will be trading at bargain prices for long.

Below, I have carefully selected what are I think are the best 4 ASX shares to own before the end of the year.

Altium Limited (ASX: ALU)

The Altium share price hasn’t fared too well since the coronavirus pandemic swept the world. The 3D printed circuit board maker revealed it missed its full-year 2020 target of revenue above US$200 million. Altium recorded US$189.1 million in revenue for FY20, a rise of 10% on the prior year. Net profit after tax dived 42% to US$30.9 million.

The company reaffirmed its commitment to a 2025 target for market dominance of US$500 million in revenue and 100,000 subscribers. However, that achievement may be delayed 6-12 months due to COVID-19 impacts.

The Altium share price is trading at $34.05, 20% down from its all-time high of $42.76 in February.

CSL Limited (ASX: CSL)

This global biotech leader in developing and delivering life-saving medicines has been hit from the latest market sell-off. Just last month on the back of its positive FY20 results, the CSL share price topped at $317.99. It’s now trading at $286.96.

CSL recently reassured investors that its 5% plasma collection drop was only short-term and the company had taken measures to address this. Further, CSL’s ongoing partnership with the University of Queensland (UQ) and the Coalition for Epidemic Preparedness Innovations (CEPI) for the development of a COVID-19 vaccine is expected to be 12-18 months away.

Northern Star Resources Ltd (ASX: NST)

Every portfolio should have at least one established gold company, and Northern Star or Newcrest Mining Limited (ASX: NCM) should be on your list.

The rising spot price of gold has led to Northern Star rewarding shareholders with a special dividend thanks to its bumper FY20 results. The Northern Star share price is up 16.6% since the start of the year to $13.18 and it could go much higher due to the economic uncertainty in global markets.

Furthermore, the gold mining and exploration company has invested US$800 million to acquire 50% of Kalgoorlie Consolidated Gold Mines (KCGM). The recent acquisition will undoubtedly underpin future growth through its Fimiston Super Pit, said to be the biggest open pit gold mine in Australia.

Pointsbet Holdings Ltd (ASX: PBH)

Pointsbet has been creating huge tailwinds in the past month. The corporate bookmaker reported an unexpected strong FY20 result and more specifically, a new 5-year exclusive partnership with major United States media company NBC Sports.

The Pointsbet share price has gone from its March lows of $1.10 to $13.69. That is an increase of more than 1200% in the space of 6 months! At the moment, the Pointsbet share price is in a trading halt pending a capital raising to eligible shareholders following its completed $200 million institutional placement. The funds will be used to support marketing costs across the United States, and further client acquisition and retention.

Pointsbet shares are expected to resume normal trading on 9 September.

More reading

• CSL share price higher on COVID-19 vaccine news
• New to investing? More ASX growth shares to buy now
• More radical action from RBA likely after Victoria’s extends harsh lockdown
• Share price opportunities to buy this week
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points

Aaron Teboneras owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When you are building a portfolio of ASX shares, I believe there are some companies you should consider never selling. To paraphrase Warren Buffett, the best holding period is forever. That’s because time is your greatest advantage as a retail investor. When left to work its magic, the snowball that is compound interest has the potential to grow your ASX share portfolio wealth exponentially.

Careful consideration must be given to ASX shares you plan to hold forever. In my opinion, these need to possess some crucial characteristics:

• A wide moat – This is basically a competitive advantage such as a network effect, first-mover advantage, high switching costs or high barriers to entry.
• Optionality – The ability to diversify and pivot the business to growth markets.
• Financial fortitude – Having a strong balance sheet with lots of cash and little debt.

On that note, here are five ASX shares in my own portfolio that I plan on holding on to forever.

5 ASX shares I plan on never selling 

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

ASIA is on my list because it provides market capitalisation weighted exposure to a geographic location that will be an economic powerhouse long into the future. This diversification helps to balance my portfolio, whilst giving me access to fast growing innovative stocks such as Alibaba and Tencent.

Mercadolibre Inc (NASDAQ: MELI)

Mercadolibre isn’t technically an ASX share. However, it is one of my highest conviction holdings. Often referred to as the eBay Inc (NASDAQ: EBAY) of Latin America, the stock has grown far beyond that. The eCommerce company now has a massive payment processing network called Mercado Pago, that provides another huge growth driver for the stock.

This optionality, when combined with the share’s top dog status, should provide market beating returns well into the future.

Nanosonics Ltd (ASX: NAN)

Nanosonics is a leader in the disinfection of ultrasound probes. This ASX share has been a long-term market beater and I think this will continue. Operating with the ‘razor and blade’ business model, Nanosonics is successfully growing its installed base of trophon® and trophon® 2 machines. Nanosonics can then sell more high margin consumables products and boost profitability.

ResMed Inc (ASX: RMD)

ResMed is a leader in the treatment of sleep apnea. Sleep apnea is a hugely underdiagnosed condition that can have significant impacts on a sufferer’s quality of life and health. As the company and physicians continue to further education regarding the condition, I can see a greater adoption of ResMed’s products.

Furthermore, the company’s move into data and internet connected devices should provide optionality in the future.

Xero Limited (ASX: XRO)

If you run a small or medium sized business, you’ve probably heard of Xero. Xero provides its customers with a best-in-class cloud accounting solution. Its customers have primarily been in Australia and New Zealand, however the business is also expanding into the United Kingdom and the United States. 

I believe the digitisation of tax and accounting reporting across the globe is a nice tailwind that Xero can ride to significantly increase profitability. Another reason I love this ASX share is that it has a third-party marketplace for products that work with Xero. Apple, Inc (NASDAQ: AAPL) and Atlassian Corporation PLC (NASDAQ: TEAM) are great examples of this high margin revenue.

More reading

• New to investing? More ASX growth shares to buy now
• New to investing? ASX growth shares to buy now
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• Why I would invest $100,000 across these fantastic ASX shares
• ASX All Technology Index swells with new additions

Lloyd Prout owns shares of BetaShares Asia Technology Tigers ETF, MercadoLibre, Nanosonics Limited, and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Atlassian, and MercadoLibre. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends eBay and recommends the following options: long January 2021 $18 calls on eBay and short January 2021 $37 calls on eBay. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF and Nanosonics Limited. The Motley Fool Australia has recommended Apple and 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.

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Selling gold to buy dirt-cheap stocks may not seem to be a sound move at first glance. Economic risks are high, and gold’s defensive status may help to protect investors from further volatility in the stock market.

However, the precious metal’s high price and low valuations on offer across the stock market could mean that equities provide a more attractive long-term capital return outlook.

The recovery potential for dirt-cheap stocks

While there are a wide range of dirt-cheap stocks on offer at the present time, history suggests that this situation will not last in perpetuity. No period of economic weakness or stock market decline has ever remained in place over the long run. Eventually, global GDP growth has always returned to positive figures and the operating environment for stocks has improved. This has always led to rising stock prices, and a shift towards a sustained bull market.

Therefore, investors who are able to buy undervalued shares today may be able to generate strong returns in the coming years. Certainly, in the coming months, equity prices may disappoint. There could even be a second stock market crash. However, on a long-term basis, stocks seem to offer greater scope for capital gains than other assets, such as gold.

Gold’s high price

Dirt-cheap stocks may also be more attractive because of gold’s high price. It has reached a new record high in 2020 due partly to factors such as continued low interest rates and an increasingly risk-off sentiment among investors.

While this has helped to push the gold price higher, buying any asset when it is trading at a record high may not be a sound move. It means there may be less scope for capital gains, since investors may already have priced in favourable conditions. For example, in gold’s case, investors may have accounted for a period of weak global economic growth by sending the precious metal’s price to a record level.

Changing investor sentiment

Although dirt-cheap stocks may have attracted some investors to equity markets earlier this year, thereby causing a rebound, many investors continue to be relatively risk averse at the present time. As such, gold’s price may yet move higher in the short run, while stock prices could continue to be volatile.

However, investor sentiment is very likely to change over the long run in response to an improving economic outlook. This may shift the focus of investors away from defensive assets, such as gold, towards riskier assets with greater growth potential, such as stocks. The end result could be a disappointing performance from gold, and a return to a sustained bull market in equities.

As such, now could be the right time to sell gold and buy dirt-cheap stocks. They appear to offer greater scope for capital returns ahead of a likely recovery.

More reading

• 4 of the best ASX shares to buy before 2021
• 5 ASX shares I will never sell
• CSL share price higher on COVID-19 vaccine news
• New to investing? Here are 5 ASX dividend shares to buy now
• How long can capitalism be paused before it kills us all?

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The CSL Limited (ASX: CSL) share price is pushing higher on Monday after making a major COVID-19 announcement.

At the time of writing the biotherapeutics company’s shares are up 1% to $281.56.

What did CSL announce?

This morning CSL announced that it has signed a heads of agreement with the Australian Government to supply 51 million doses of University of Queensland’s potential UQ-CSL V451 COVID-19 vaccine to Australia. The first doses are scheduled for release from mid-2021 following successful clinical trials.

A separate heads of agreement has been signed between CSL and AstraZeneca for the expected manufacture of approximately 30 million doses of the Oxford University vaccine candidate AZD1222 for supply to Australia. The first doses of this alternative vaccine are scheduled for release early 2021, following successful clinical trials.

In addition to this, the company has signed a funding deed with the Australian Government in order to ready its facilities for the manufacture of the AZD1222 vaccine candidate, and provide an additional COVID-19 vaccine option for Australians.

CSL’s CEO & Managing Director, Paul Perreault, commented: “The social and economic impact of the COVID-19 pandemic has brought a high level of urgency to the task of developing a vaccine against the SARS-CoV-2 virus, and to manufacture a successful vaccine at high quality and in sufficient quantities.”

“CSL has been working at pace to respond to the pandemic and has invested significant resources in the rapid development and large-scale manufacture of UQ-CSL V451, along with a number of other therapeutic programs.”

“Together with partners including the University of Queensland and Coalition for Epidemic Preparedness (CEPI), our development and manufacturing teams have been working extremely hard to advance this program to ensure the availability of a safe and effective vaccine should clinical studies prove successful,” he added.

The company’s influenza vaccines business, Seqirus, will hold regulatory responsibility as the marketing authorisation holder. Production of the vaccine to support late stage clinical trials has commenced at CSL’s biotech manufacturing facilities in Broadmeadows, Melbourne.

Will these vaccines work?

Although the results from the pre-clinical and early clinical studies for UQ-CSL V451 are very promising, management warned that it is impossible to predict the level of success the candidate will have in late stage clinical trials.

“CSL’s focus is to produce a safe and effective vaccine. It is important that on completion of clinical trials, the public has confidence in UQ-CSL V451, which makes use of the well-established recombinant protein technology platform, and Seqirus’ proprietary adjuvant MF59, which has an extensive safety track record in humans,” Mr Perreault said.

The same applies for AZD1222. Its early trials have been very promising, but it is not a guarantee of future success.

Will CSL’s other businesses be disrupted?

Despite taking on the mammoth task of manufacturing tens of millions of doses of the AZD1222 vaccine, CSL’s manufacturing of its current product portfolio will not be disrupted.

Mr Perreault explained: “We are pleased that we can produce the AZD11222 without compromising the production of our core products – influenza vaccines and plasma and recombinant protein therapies – and provide a second option for a COVID-19 vaccine candidate to Australia.”

“Acknowledging that CSL is the only company in Australia with manufacturing facilities capable of producing this vaccine, we thank the Australian Government for their support, ensuring Australia has access to onshore COVID-19 vaccine production and supply. Our facilities will require modifications in order to fulfil the compliance requirements for working with vector-based vaccines, as well as the addition of skilled personnel and further capital investment.,” he concluded.

More reading

• 4 of the best ASX shares to buy before 2021
• New to investing? More ASX growth shares to buy now
• ASX 200 Weekly Wrap: Friday crash pulls ASX back below 6,000 points
• Here’s how to make a $1 million portfolio by investing $1,000 a month
• How to earn a passive income of $50,000 with ASX dividend shares

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 has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The final third of my 15 ASX share starter portfolio is allocated to dividend shares. Historically, ASX dividend shares have been strong performers as a group. Furthermore, a significant portion of the S&P/ASX 200 Index (ASX: XJO) return is made up of dividends and franking credits.

Here are 5 great ASX dividend shares that pay solid yields:

Jumbo Interactive Ltd (ASX: JIN)

Jumbo recently signed an extension to its resale agreement with gambling giant Tabcorp until 2030. This provides the online lottery ticket seller with strong visibility in the medium term. A growing lottery-as-a-service business also provides the stock with great optionality. Jumbo currently pays a 2.6% dividend yield, or 3.7% grossed up for franking credits. 

Macquarie Group Ltd (ASX: MQG)

Macquarie is the only bank that I would buy on the ASX. Why? Because the “millionaire maker” doesn’t just apply to the bank’s rich clients, but also to investors. Macquarie has more international exposure, as well as an investment banking arm which provides greater optionality than the other major banks. It currently pays a partially franked 3.4% dividend yield.

Rural Funds Group (ASX: RFF)

Rural Funds must be one of the most stable businesses on the ASX. The business owns and leases agricultural properties to strong tenants such as Treasury Wine Estates Ltd (ASX: TWE). A benefit of dealing in a required field like agriculture, is that Rural Funds can implement long-term contracts, with inbuilt growth. Rural Funds currently yields a generous 4.76%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is a Fool favourite. The diversified investment house has been a great ASX dividend share for long-term investment. Soul Patts has never failed to pay a dividend to shareholders since listing on the ASX. What’s more, this dividend has increased every year since 2000. Soul Patts currently pays a 2.77% dividend yield, or 3.95% grossed up for franking credits. 

Wesfarmers Ltd (ASX: WES)

Wesfarmers is another mature and diversified business with a long track record of success. Wesfarmers has done so well by effectively allocating capital over long periods of time. A great example of this is its investment and sale of the Coles Group. With a significant amount of cash from that sale, I expect some exciting announcements in the future. In the meantime, Wesfarmers has a number of strong brands like Bunnings and Kmart that allow it to pay a 3.13% dividend yield, or 4.47% grossed up for franking credits. 

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Lloyd Prout owns shares of Jumbo Interactive Limited and Macquarie Group Limited and expresses his own opinions. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Jumbo Interactive 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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Capitalism is effectively on hold in the year of the COVID-19 pandemic.

Most developed nations, including Australia, have had to hand out massive public assistance to their citizens and businesses to save them from going broke.

The effectiveness of those schemes have varied from country to country.

Nucleus Wealth head of investments Damien Klassen said the government was forced into such intervention to fight a specific macroeconomic effect.

“We don’t want bankruptcies to snowball into more job losses, into a housing market crash, into more defaults and so on,” he wrote on the Nucleus blog.

“So, by delaying the start, it creates a calm spot, the eye of the storm.”

However, it has had to be careful to not damage the economy with a second subsequent effect.

“We don’t want the lack of bankruptcies to mean that the over-indebted who aren’t paying their bills start bringing down people who weren’t over-indebted. This is the second half of the storm.”

Governments were hoping for a short and sharp shutdown of the economy before a V-shaped recovery followed.

But an effective treatment, cure or vaccine hasn’t come along quickly. And most countries are now dealing with a prolonged recession and even a second wave of the virus.

Everyone agrees we have to get back to capitalism

Klassen said governments would now be tempted to push out more assistance, but questioned whether that would be wise.

“The issue is that the second [effect] grows bigger every day. By pulling the first lever again, if we don’t get a cure or vaccine, then there is now a much larger problem.”

It’s a dilemma with no easy answers.

S&P Global Ratings predicts prolonged negative pressure on corporate results as government support eventually runs out.

“We believe more pain is likely in companies’ earnings amid the weakest macroeconomic environments in decades,” said S&P Global Rating credit analyst Richard Timbs.

“The fallout from the pandemic has yet to fully play out across the Australian and New Zealand corporate landscape.”

The ratings agency stated government stimulus would “remain a key swing factor” in any recovery.

The Business Council of Australia (BCA) is a group that represents, among others, Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Limited (ASX: ANZ), Macquarie Group Ltd (ASX: MQG), AGL Energy Limited (ASX: AGL), BHP Group Ltd (ASX: BHP), Coca-Cola Amatil Ltd (ASX: CCL), Coles Group Ltd (ASX: COL), Wesfarmers Ltd (ASX: WES), Telstra Corporation Ltd (ASX: TLS), Scentre Group (ASX: SCG), Qantas Airways Limited (ASX: QAN), and ASX Ltd (ASX: ASX) itself.

BCA chief Jennifer Westacott admitted on television last week that the current situation of heavy subsidies is artificially inflating corporate results.

“We always knew that JobKeeper was sort of like a blunt but necessary instrument. But it has had this weird effect,” she told Sunrise.

“[Companies] are on a bit of a sugar hit. We’ve got to stay on the timetable to move off JobKeeper and get things back to normal because it is having that distortionary effect.”

According to Westacott, “real-world data” suggests Australian businesses have lost $30 billion from their bottom line.

But how do we return to capitalism?

Westacott said next month’s federal budget would have a bearing.

“Part of the job, I think, of the October budget is to get the confidence back in the community and in business so that people start spending money again,” she said.

“You’ve got to carefully reopen things so you can get activity going again.”

According to Klassen, given the choice between “short term pain for a large amount of economic gain” and “short term gain for a large amount of economic pain”, governments inevitably choose the latter.

“The rules are rolling off around the globe — my expectation is that this will create at least some sense of normalcy,” he said.

“But there are already countries extending provisions until the end of the year or beyond. [This] makes it difficult to assess when the eye of the storm will pass, and the second half will begin.”

And what if we don’t return to capitalism?

There is an alternative: Things never return to the way they were.

That COVID-19 has changed the economic and market fundamentals forever.

“We have a checklist of a dozen decisions that governments and central banks can make that will eventually suspend capitalism,” Klassen said.

“A few of the items have already been checked off the list. The more that get implemented, the closer we get to a genuinely new paradigm.”

But a complete reworking is unlikely. Klassen said capitalism will be permanently suspended only if government actions “become increasingly radical”. 

“Effectively central banks and governments bailing out and propping up most failing businesses, turning the world’s capital markets into a herd of state-owned entities that will ‘kill the village in order to save it’.”

More reading

• 4 of the best ASX shares to buy before 2021
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• CSL share price higher on COVID-19 vaccine news
• New to investing? Here are 5 ASX dividend shares to buy now

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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