It’s been a decent week for the S&P/ASX 200 Index (ASX: XJO). Since last Thursday, the ASX 200 has gained a healthy 1.05%. But that’s nothing compared to the gains of the Liontown Resources Ltd (ASX: LTR) share price.

Liontown shares have rocketed over the past five trading days. This ASX 200 lithium stock opened at $1.17 a share last Thursday. But today, Liontown is swapping hands for $1.34 a share at the time of writing, up a rosy 3.47% for the day thus far. This means that Liontown shares have gained an impressive 14.53% over the past week or so.

Even the mathematically challenged would recognise what a significant move this is for Liontown’s investors.

But how has this lithium stock pulled such an eye-watering gain out of its proverbial hat?

Unfortunately, it’s not immediately obvious why Liontown shares have exploded so dramatically in value over the past week. There have been no significant pieces of news or ASX announcements out of the company whatsoever over this period.

In fact, there hasn’t been a price-sensitive ASX filing from Liontown since 13 March last month.

How have Liontown shares put on 15% in just one week?

However, there is something we can point to that might have been influencing the Liontown share price of late.

Earlier this month, my Fool colleague James covered a very positive outlook on Liontown shares indeed, coming from ASX broker Bell Potter.

Bell Potter was so impressed with Liontown’s securement of a $550 million funding facility last month that it reaffirmed a ‘speculative buy’ rating on the company. That came with a drastically increased 12-month share price target of $1.90 for the Liontown share price.

If realised, this would see investors enjoy even more gains from Liontown shares – worth almost 42% over the coming year.

Bell Potter cited Liontown’s funding arrangement as the catalyst for its improved share price target. The broker stated that “the new facility provides funding headroom of around A$150m above [Liontown’s Kathleen Valley Lithium Project]’s remaining capex and working capital requirements”.

In addition, Bell Potter described the Kathleen Valley project as “highly strategic in terms of its stage of development, long mine life and location”. It also cited the significant involvement of Gina Rinehart’s Hancock Prospecting as a positive. Hancock currently has a 19.9% in Liontown.

However, the broker noted that its “speculative risk rating recognises this higher level of risk” involved in investing in an “asset development company” like Liontown.

Even so, this bullish outlook from one of the ASX’s major brokers could well be what has caused this notable uptick in the Liontown share price over the past week. Let’s see if this momentum continues.

The post How has the Liontown share price rocketed 15% in a week? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• The ASX 200 lithium stock this fundie is backing for the global lithium comeback
• These are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today
• Why Imugene, Liontown, Pointsbet, and Regis Resources shares are storming higher

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another gain. At the time of writing, the benchmark index is up 0.5% to 7,863.6 points.

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

Cardno Ltd (ASX: CDD)

The Cardno share price is down 46% to 33 cents. This has been driven by the professional infrastructure and environmental services company’s shares going ex-dividend this morning. Last week, the company announced plans to distribute an unfranked dividend of 27.6 cents per share to shareholders. This equates to a total return of $10.8 million. This reflects the repatriation of US$5.9 million of collections related to three positive legal claims and $1.5 million from the sale of Cardno International Development to DT Global Australia. This dividend will be paid to eligible shareholders later this month on 29 April.

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price is down 2.5% to 88.7 cents. This is despite there being no news from the allogeneic cellular medicines developer. However, it is worth noting that its shares have been on fire in recent weeks, so profit-taking could be happening today. For example, Mesoblast’s shares remain up approximately 175% since this time last month. This has been driven by excitement over recent correspondence from the US Food and Drug Administration. Investors appear optimistic that one of the company’s stem cell therapies could be approved at long last in the near future.

Perseus Mining Ltd (ASX: PRU)

The Perseus Mining share price is down 2.5% to $2.27. This morning, the gold miner announced that its takeover offer for Orecorp Ltd (ASX: ORR) has been given a boost. Perseus revealed that Silvercorp Metals has accepted the company’s offer. This is a big win as Silvercorp’s holding represents 15.61% of OreCorp shares on issue. This means that Perseus now has a relevant interest of 74.98% of OreCorp shares on issue. However, it seems that investors don’t appear overly keen on the proposed takeover.

Somnomed Ltd (ASX: SOM)

The Somnomed share price is down 47% to 20.5 cents. Investors have been hitting the sell button in response to an earnings downgrade and capital raising. Somnomed downgraded its revenue guidance to 6%-9% growth and EBITDA guidance to negative $1 million to $0 million. This compares to previous revenue guidance of 12%+ and EBITDA guidance of $3 million+ for FY 2024. Management blamed manufacturing constraints and delayed implementation of cost initiatives. It also raised approximately $5.8 million at a deep discount of 21 cents per new share.

The post Why Cardno, Mesoblast, Perseus, and Somnomed shares are dropping today appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to buy next week
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• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is on form again on Wednesday and on course to record another decent gain. In afternoon trade, the benchmark index is up 0.55% to 7,866.3 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are climbing:

Electro Optic Systems Holdings Ltd (ASX: EOS)

The Electro Optic Systems share price is up over 3% to $1.69. This morning, this defence and space company announced that it has completed a debt repayment of $20.5 million on schedule. This follows the repayment of $26.9 million in September 2023 under a separate 12 month working capital facility. As a result, this means that Electro Optic Systems has now repaid 50% of the principal amounts originally due to Washington H. Soul Pattinson (ASX: SOL) and 100% of the working capital facility amounts. The only outstanding amount now relates to a term loan facility.

Novonix Ltd (ASX: NVX)

The Novonix share price is up 8% to $1.08. A number of battery materials shares are having a strong session today following a solid night on Wall Street for lithium miners. In addition, this morning Novonix revealed that members of its executive team are scheduled to participate in a number of investor events in April. Investors may believe that these events could increase interest in the battery materials and technology company and be supportive of its share price.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is up 14% to 26.2 cents. As well as getting a boost from another rise from the gold price, the release of drilling results from its Simberi Operations in Papua New Guinea has got investors excited. Commenting on the drilling, the gold miner’s managing director and CEO, Andrew Strelein, said: “We are getting positive results by applying more than 10 years of improvement in geological knowledge and targeting insufficiently drilled areas from drill pad locations now available because of more than 10 years of oxide mining.”

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price is up 4% to $7.67. This appears to have been driven by a broker note out of UBS this morning. According to the note, the broker has upgraded this coal miner’s shares to a buy rating with an improved price target of $8.70. It believes the company is well-positioned for the future thanks to a positive outlook for metallurgical coal. Particularly given the recent acquisition of Blackwater and Daunia. UBS’s price target implies potential upside of 13% from current levels.

The post Why EOS, Novonix, St Barbara, and Whitehaven Coal shares are storming higher appeared first on The Motley Fool Australia.

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• Guess which ASX mining stock is rocketing 15% on a new gold discovery
• Here are the top 10 ASX 200 shares today
• ‘Share price looks cheap’: Fortescue & 1 other beaten-up ASX 200 share to buy now
• Brokers name 3 ASX shares to buy now
• Why is this tiny ASX gold share soaring 10% on Friday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. 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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S&P/ASX 200 Index (ASX: XJO) gold stocks have been enjoying a fantastic run amid a fast-rising gold price.

It was only on 28 February that the yellow metal was trading for US$2,030 per ounce. (It was already near historic highs.)

But since then, the price of gold has shot 16% higher, fuelled by a range of factors, including expectations of lower interest rates and its safe-haven status in times of geopolitical turmoil.

Earlier today bullion was fetching all-time highs north of US$2,355 per ounce, having since retraced a touch to US$2,348 per ounce.

As you’d expect, that’s been a boon to ASX 200 gold stocks.

Since 28 February, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller miners outside of the ASX 200 – has rocketed 26%, smashing the 3% gains posted by the benchmark index over this same period.

And ASX 200 gold stock Ramelius Resources Ltd (ASX: RMS) has handed investors even greater returns. The Ramelius Resources share price is up more than 39% since the closing bell on 28 February. And this is a miner with a market cap of $2.2 billion, no less.

Despite those juicy gains, there could be more to come.

A ‘cheap’ ASX 200 gold stock

Simon Brown, co-portfolio manager of Tribeca’s Smaller Companies Strategy, singled out Ramelius Resources as the most undervalued stock in the fund’s portfolio (courtesy of The Australian Financial Review).

“Management at gold producer Ramelius Resources have done a great job curating a strategy that leverages their existing mill infrastructure by adding nearby deposits through bolt-on mergers and acquisitions,” Brown said of the ASX 200 gold stock.

“The stock is cheap on traditional miner metrics,” he added.

According to Brown:

It has a price to net present value of 0.75 times and, with the recent multi-year breakout in gold prices, it provides further tailwinds to valuation. We see material upside from current share price levels.

What’s been happening with Ramelius Resources?

Ramelius Resources released its quarterly production update last Wednesday, with shares closing up 5.3% on the day.

Among the highlights, the ASX 200 gold stock achieved record quarterly gold production of 86,928 ounces. The prior record production for a three-month period was achieved in the June 2020 quarter, when Ramelius produced 86,516 ounces of gold.

The gold miner also reported an all-time high quarterly free cash flow of $125.3 million, which saw Ramelius Resources holding net cash and gold of $407.1 million at the end of the reporting period.

The post 1 ASX 200 gold stock with ‘material upside’ appeared first on The Motley Fool Australia.

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• Buying ASX 200 gold stocks? Here’s why the record gold price could keep charging higher
• COVID’s lasting impacts for shares vs. property: AMP economist
• Here are the top 10 ASX 200 shares today
• Why 29Metals, Boss Energy, Cooper Energy, and Ramelius shares are pushing higher
• Guess which ASX 200 gold stock is rocketing 12% on record production

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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ASX copper stocks are getting the kind of attention the lithium miners were back in 2022.

That’s because, like lithium a few years back, copper prices are running higher as booming demand outpaces new supplies.

At US$9,418 per tonne, the copper price has already gained more than 10% in 2024. And many analysts are forecasting that the red metal will continue to run higher for some time yet.

Which would be welcome news to shareholders in Aeris Resources Ltd (ASX: AIS) and S&P/ASX 200 Index (ASX: XJO) copper stock Sandfire Resources Ltd (ASX: SFR).

We’ll get back to those two miners in a tick.

But first…

What’s driving the copper price back towards new highs?

ASX copper stocks have already been benefiting from improving sentiment on the outlook for the red metal.

Atop its broader industrial uses, copper’s conductive nature makes it a crucial element in the world’s ongoing move towards electrification. And the nascent booming growth in artificial intelligence (AI) and the data centres that support the industry is adding more fuel to that fire.

“We’re adding even more sources of demand. First it was the energy transition, now also data centres and AI. That growth has suddenly exploded.” Saad Rahim, chief economist at Trafigura said about the copper market (quoted by The Australian).

That demand explosion could push prices far higher, offering some potential ongoing tailwinds for ASX copper stocks.

According to Citi global head of commodities, Max Layton, “We think the stars are aligning for the copper bull story.”

Layton’s base case scenario (courtesy of The Australian) sees the copper price reaching US$12,000 per tonne by 2026.

But he said copper prices could run above US$15,000 per tonne, or some 60% above current levels if cyclical demand increases at a higher pace.

“Explosive price upside is possible over the next two-to-three years too, if a strong cyclical recovery occurs at any time,” Layton said.

Two ASX copper stocks to ride the boom

Which brings us back to ASX copper stocks Sandfire Resources and Aeris Resources.

Aeris is a small-cap miner with a market cap of $198 million. It’s in a turnaround phase, with the share price down 60% since this time last year but up a whopping 95% over the past month.

Investor enthusiasm was most recently spurred when Aeris reported on significant copper resource growth potential at its joint venture Canbelego copper project, located in New South Wales.

ASX 200 copper stock Sandfire Resources is considerably larger and more established, with a market cap of $4.2 billion.

The Sandfire share price is up 35% over 12 months, with shares having gained 45% in the past six months.

While the ASX 200 miner also digs up zinc, lead, gold and silver, 74% of its H1 FY 2024 earnings were derived from copper.

And if the red metal continues to charge higher as Citi expects, Sandfire shares could continue to offer some outsized gains in 2024.

The post 2 ASX copper stocks to buy now for this ‘explosive price upside’ appeared first on The Motley Fool Australia.

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• 2 ASX mining stocks smashing the market on Tuesday
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices
• Why hot ASX copper shares could have further to run
• Why this ASX small cap stock could rocket 60%
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The Vicinity Centres (ASX: VCX) share price is still 25% lower than its pre-COVID high, as we can see on the chart below. Could the ASX dividend stock be an undervalued investment opportunity?

The real estate investment trust (REIT) owns a portfolio of property centres across Australia, with a stated $23 billion of retail assets under management (AUM) across 59 shopping centres.

Its assets include local shopping centres and DFOs across the country and 50% of Australia’s largest mall, the Chadstone Shopping Centre in Melbourne, Victoria.

There are two key reasons why I like this business.

Solid passive income yield

One vital financial metric for a REIT is the adjusted funds from operations (AFFO), which is essentially the net rental profit.

Vicinity Centres’ distribution payout ratio target range is between 95% and 100% of AFFO, which can create a good distribution yield.

The business expects its AFFO per security to be at the top end of its guidance range between 11.8 cents and 12.2 cents per security. In the FY24 first-half result, it paid a distribution of 5.85 cents.

According to Commsec, the ASX dividend stock is predicted to pay a distribution of 11.7 cents per security in FY24. This translates into a forward distribution yield of around 6%. By FY26, it’s predicted to pay a distribution per security of 12.5 cents, which would be a yield of 6.25%.

The payout could increase in FY25 and FY26 — and growing passive income is one of the main things I look for when choosing ASX dividend shares.

Limited real estate

Australia’s cities continue to grow, and the number of shoppers keeps increasing, but there isn’t any more space in suburban locations for large shopping centres to be built.

Of course, there’s a danger that e-commerce could challenge the relevance of physical retail stores.

In its FY24 half-year update, Vicinity Centres said that its occupancy rate increased to 99.1%, with a leasing spread (rental increase) of 3.3%, so the lease metrics are still attractive.

I think many retailers will still want a physical presence in the future, even if e-commerce plays a bigger role. Shopping centre spaces could be used for purposes beyond retail, such as education, entertainment, and so on. The underlying land also has a lot of value.

Vicinity Centres reported its net tangible assets (NTA) was $2.29 at December 2023, so the Vicinity share price is at a 13% discount to this.

In addition, the ASX dividend stock is spending hundreds of millions of dollars in the next few years to improve and expand some of its existing assets, which will lead to a boost in rental profits once those projects are finished.

Foolish takeaway

If the rental income can keep growing, then I think Vicinity Centres could be a compelling pick for the long-term with the ASX dividend stock’s irreplaceable shopping centres, including the excellent Chadstone Shopping Centre asset.

The post 1 ASX dividend stock down 25% to buy right now appeared first on The Motley Fool Australia.

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• Here’s how the ASX 200 market sectors stacked up last week
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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Westpac Banking Corp (ASX: WBC) shares have been on form so far in 2024.

Since the start of the year, the banking giant’s shares have rallied 15% and now trade at $26.39.

This means that a $20,000 investment on the final trading day of 2023 would now be worth approximately $23,000 today.

The good news for shareholders is that one leading broker believes that the shares of Australia’s oldest bank could still be undervalued.

This could mean that there’s still room for them to climb from where they trade today.

Broker says Westpac shares are undervalued

According to a recent note out of Ord Minnett, its analysts think the market is being too negative on Westpac.

The broker believes that rational competition in home loans and customer deposits is on the way and that Westpac stands to benefit more than most.

In light of this, its analysts feel that investors should be focusing less on the near term and more on the medium when it comes to Westpac and its shares. They explain:

As margins shrink and bad debts creep higher, earnings growth will be challenging for the Australian banks in the short term, but the current share price paints too bleak a picture on the medium-term earnings power of Westpac, in our view. Over the next five years, we assume rational competition returns for pricing loans and customer deposits.

This should be good news for Westpac. The broker explains:

As the second-largest lender and deposit holder, Westpac should be a willing participant as it stands to benefit materially. Most Australian banks, excluding Commonwealth Bank, face single digit return on equity in FY24, compared with our assumed 9% cost of equity, supporting our view that current loan and deposit price competition is unlikely to persist indefinitely.

As a result, Ord Minnett feels that the bank’s shares are undervalued at current levels. It adds:

Shares in Westpac are undervalued compared with our unchanged $28 fair value estimate.

Double-digits returns to come

With that in mind, based on its current share price of $26.39, Ord Minnett’s valuation represents potential upside of 6.1% before dividends.

As for dividends, the broker is forecasting fully franked dividends of $1.45 per share in FY 2024 and then $1.50 per share in FY 2025. This equates to dividend yields of 5.5% and 5.7%, respectively, for investors over the next couple of years.

In total, this means that the broker sees scope for a total return of approximately 11.6% for investors between now and this time next year.

The post Are Westpac shares undervalued by the market? appeared first on The Motley Fool Australia.

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More reading

• Do Westpac dividends still beat money in a term deposit?
• Here are the top five ASX 200 stocks in Macquarie’s model income portfolio
• After leaping to 52-week highs in March, what’s next for the Westpac share price?
• I’d spend $8k on these ASX 200 shares today to target a $6,102 annual passive income
• Are Westpac shares a buy following the bank’s big tech update?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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BHP Group Ltd (ASX: BHP) stock is best known for its iron ore operations.

And for good reason.

For the half year through to 31 December, the S&P/ASX 200 Index (ASX: XJO) mining giant reported producing 129 million tonnes of the industrial metal, selling this for an average realised price of US$103.70 per wet metric tonne.

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) from BHP’s iron ore division for the six months came in at US$9.7 billion.

But with copper prices surging in 2024, BHP stock’s copper operations have been drawing increasing interest.

For its half-year results (achieved at significantly lower copper prices than today), BHP reported producing 894,000 tonnes of copper and selling it for an average realised price of US$3.66 per pound.

That saw copper deliver underlying EBITDA for the six months of US$3.5 billion.

Copper adding shine to BHP stock outlook

BHP has been upping its copper production, with its Escondida mine in Chile increasing half-year output by 3% to 528,000 tonnes of copper.

And according to Bloomberg Intelligence analyst Grant Sporre, this ramp-up could see BHP stock unseat Chilean state-owned copper mining company Codelco as the world’s number one copper producer.

That forecast is subject to ongoing production ramp-up at Escondida.

Sporre expects the ASX 200 miner will produce 1.44 million tonnes of copper for the year, outpacing his expectations of 1.41 million tonnes of the red metal from Codelco.

And this could come at an opportune time for BHP stockholders, who’ve watched the share price struggle amid a slumping iron ore price this year.

Unlike iron ore, the price of copper has increased more than 10% so far in 2024. It is currently trading for US $9,418 per tonne.

And the red metal could continue to run hot.

Demand for copper on the up

According to Citi analysts, demand is only set to grow, fuelled by copper’s critical role in the global electrification push atop new demand growth from the booming AI industry, which requires support from massive copper-hungry data centres.

Citi’s Global Head of Commodities Max Layton’s base case scenario (courtesy of The Australian) sees the copper price averaging US$10,000 per tonne in the December quarter and rising to US$12,000 per tonne by 2026.

However, he notes there could be a significantly higher increase in cyclical demand than assumed in his base case, which would offer some welcome tailwinds for BHP stock.

“Explosive price upside is possible over the next two-to-three years too, if a strong cyclical recovery occurs at any time,” Layton said.

In this case, the copper price could blow past US$15,000 per tonne or almost 60% above current levels.

The post How BHP stock could unseat the world’s top copper producer appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The Australian Securities Exchange (ASX) is welcoming an AI exchange-traded fund (ETF) today.

Artificial intelligence has captured the hearts and minds of investors with the popularisation of chatbots and AI-generated imagery. The promise of a more productive, creative, and innovative future is taking the world by storm — boosting the fortunes of AI-relevant companies while doing so.

Today’s launch of the Global X Artificial Intelligence ETF (ASX: GXAI) gives Aussies another way to tap into the hot sector. So, let’s take a tour of the latest ETF to hit the ASX while the iron is hot.

What’s inside the ASX AI ETF?

The Artificial Intelligence ETF is the 36th exchange-traded fund in the New York-based provider’s lineup in Australia.

According to its website, this ASX AI ETF aims to invest in companies that “potentially stand to benefit from the further development and utilisation of artificial intelligence technology in their products and services, as well as in companies that provide hardware facilitating the use of AI for the analysis of big data”.

Furthermore, the fund’s goalpost is the Indxx Artificial Intelligence & Big Data Index. The aim is to give investors a return in line with this index. The thematic index that Global X will be tracking has increased 41.9% over the past year.

The all-important question: What will investors buy in a slice of the Global X Artificial Intelligence ETF?

Company	Net Assets (%)
Nvidia Corp (NASDAQ: NVDA)	3.96%
Meta Platforms Inc (NASDAQ: META)	3.62%
Netflix Inc (NASDAQ: NFLX)	3.43%
Amazon.com Inc (NASDAQ: AMZN)	3.20%
Qualcomm Inc (NASDAQ: QCOM)	3.05%
Tencent Holdings Ltd	3.03%
Oracle Corp (NYSE: ORCL)	2.99%
Samsung Electronics Co Ltd	2.96%
IBM Common Stock (NYSE: IBM)	2.93%
Salesforce Inc (NYSE: CRM)	2.93%

AI superstar Nvidia takes pole position in the ETF. The company, which has risen 77% in 2024 alone, is the largest by market capitalisation inside the fund. However, the weighting of positions is not based on market cap.

For instance, social media giant Meta (owner of Facebook and Instagram) has the second largest allocation. Yet, Jeff Bezos’ Amazon is roughly US$600 billion larger than Meta and is fourth on the list.

The ETF is actively managed and incurs a 0.57% management fee for being such. As a comparison, the ASX 300 tracking Vanguard Australian Shares Index ETF (ASX: VAS) charges a 0.07% management fee.

Shares in the ASX AI ETF are trading at $10.07 on the open.

The post What’s under the hood of the new AI ETF on the ASX? appeared first on The Motley Fool Australia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler has positions in Meta Platforms. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Meta Platforms, Netflix, Nvidia, Oracle, Qualcomm, and Salesforce. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended International Business Machines. The Motley Fool Australia has recommended Amazon, Meta Platforms, Netflix, Nvidia, and Salesforce. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I love the idea of living off passive income from ASX dividend shares.

Some ASX-listed companies aim to pay good dividends to shareholders each year, making them appealing cash flow prospects.

Below are three stocks I’d want in my portfolio if I were starting out with $20,000 and aiming to generate $5000 in annual dividends.

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

Soul Patts is a diversified investment house that owns a variety of investments across a number of different industries. These include building products, property, credit, financial services, agriculture, swimming schools, healthcare and so on.

It has paid a dividend every year since listing in 1903. And it has grown its annual ordinary dividend each year since 2000 — the longest streak on the ASX. That’s not guaranteed to continue, but it shows the leadership’s desire to keep paying dividends.

Each year, Soul Patts harvests the investment cash flow its portfolio receives and sends some of the money to shareholders in the form of a larger dividend. With the retained cash flow, the ASX dividend share makes new investments to hopefully drive future dividend growth.

It currently has a grossed-up dividend yield of 3.8%.

GQG Partners Inc (ASX: GQG)

GQG is a fund manager headquartered in the United States. It aims for additional growth by expanding into other countries and using different investment strategies, such as dividend stocks.

The company charges minimal (if any) performance fees on most of its funds. Most of its revenue comes from management fees, so its funds under management (FUM) growth is essential.

In the latest update for March, GQG’s FUM rose from US$137.5 billion to US$143.4 billion, a strong rise in one month that makes it more likely the company’s dividend can grow in the short term.

In the three months to 31 March 2024, the ASX dividend share experienced net inflows of US$4.6 billion, meaning households and institutions gave GQG more money to manage.

If GQG keeps making good net returns within its investment funds and continues seeing net inflows, I think the dividend income will be strong. It targets a dividend payout ratio of 90% of distributable earnings.  

According to Commsec, it could pay a dividend yield of 7.6% in FY24.

Telstra Group Ltd (ASX: TLS)

Telstra is the leading telecommunications business in Australia, with the strongest market position and the largest network coverage.

The ASX dividend share’s huge subscriber base allows it to invest more in infrastructure than its rivals, enabling it to stay ahead of the competition. The more users, the more the infrastructure is being utilised, which can help improve the company’s efficiencies and margins.

Telstra’s lead in 5G could be important if it unlocks high-margin offerings like 5G-powered broadband to compete with the NBN (and take much of the broadband margin). 5G may also lead to new data connections/devices that haven’t been invented yet.

The Telstra board is using the company’s growing profit to pay bigger dividends. In FY24, it’s projected to pay a grossed-up dividend yield of 6.8%, according to Commsec.

Foolish takeaway

If we evenly split $20,000 between those three names, the average grossed-up yield would be just over 6%, creating $1,200 of annual income.

Then, a combination of company-initiated dividend increases, re-investment of dividends into more (ASX dividend) shares, and the introduction of new, saved money into my portfolio could help me grow it to $5,000 over time.  

If the portfolio grew at 10% per annum and kept a 6% dividend yield (and we allocated no new money), it would take 15 years to reach a $83,333 portfolio value and pay $5,000 of dividends per year.

If we added $500 per month to the portfolio, it could take less than seven years to reach $83,333.

The post How I’d invest my first $20k to target $5,000 a year from ASX dividend shares appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 insider has bought $17 million of company shares before the ex-dividend date
• The best ASX buys I’d grab to beat the market without a tonne of risk
• 2 excellent ASX 200 retirement shares to buy now
• Better ASX stock: Woodside vs Telstra
• In this bull market, where are the bargain buys to be found?

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Telstra Group and Washington H. Soul Pattinson and Company Limited. 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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