Qantas Airways Limited (ASX: QAN) shares could be an opportunity that may fly soon enough, according to one fund manager.

The Qantas share price has lost altitude over the last year, as we can see on the chart below.

Some investors think this decline has opened up a chance to buy Australia’s leading airline at a discounted price. Let’s look at why one fundie has boarded Qantas stock.

Strong demand continues

The fund manager L1 recently noted that Qantas continued to benefit from domestic demand remaining “robust” despite higher airfares.

The investment team believe Qantas is “extremely well placed” to compete strongly after its $1 billion cost-out program, the “exceptional” loyalty program and its leading domestic market position.

The strong demand can continue to be seen in the financials.

In its FY24 first-half result, Qantas reported underlying profit before tax of $1.25 billion and statutory net profit after tax (NPAT) of $869 million. With that large profit generation, the company announced an additional on-market share buyback of up to $400 million. The company reported a “significant improvement in customer satisfaction” though there was “more work to do”.

Profit generation is an important factor for Qantas shares.

Positive upcoming developments

L1 is expecting Qantas to outline its plans in April to improve its loyalty offer to enable easier access for frequent flyer members to use their points.

The investment team believes new CEO Vanessa Hudson is rapidly and methodically addressing customer “pain points”. These changes will “improve sentiment from both customers and potential investors”, according to the fund manager.

Another reason L1 thinks Qantas is positioned well for the next few years is that it will have Australia’s “best loyalty business”, which could see a doubling of earnings over the next five to seven years. It also has a number of new, more fuel-efficient aircraft.

‘Project Sunrise’, which will enable direct flights from Melbourne and Sydney to London and New York, is also expected to be positive for the airline.

Finally, Qantas shares could benefit from having sufficient balance sheet capacity to continue its share buyback and then recommence paying fully franked dividends next year.

Are Qantas shares trading at a cheap valuation?

L1 has estimated that Qantas shares are valued at a price/earnings (P/E) ratio of just 6x. That means the Qantas share price trades at a multiple of six times its earnings.

The fund manager thinks this is a very cheap valuation considering Qantas’s dominant industry position, exposure to the structural tailwinds of Asian inbound tourism to Australia, and a high-growth, light-light loyalty division that remains “incredibly underappreciated by the market”.

The post Why one fund manager thinks Qantas shares are cheap and ‘incredibly underappreciated’ appeared first on The Motley Fool Australia.

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More reading

• These ASX 200 shares could rise 20% to 50%
• What’s happened to ASX travel shares since COVID ended?
• 7 ASX All Ords shares elevated to ‘strong buy’ status in March
• Will Qantas shares pay a dividend in 2024?
• Is Qantas a bargain ASX 200 stock today?

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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There are plenty of ASX dividend stocks to choose from on the local market, but which ones could be buys in April?

Three shares that were recently identified as buys by analysts and tipped to rise strongly from where they currently trade are listed below. Here’s what its analysts are saying about them:

Dexus Convenience Retail REIT (ASX: DXC)

The first ASX dividend stock that could be a buy according to analysts is Dexus Convenience Retail REIT. It is a convenience retail and service station focused property company.

Morgans is positive on the company and believes its shares are good value. The broker currently has an add rating and $3.23 price target on them. This implies potential upside of 20% from current levels.

As for dividends, the broker is forecasting dividends per share of 21 cents in both FY 2024 and FY 2025. Based on its current share price of $2.69, this implies dividend yields of 7.8% in both years.

Rio Tinto Ltd (ASX: RIO)

Another ASX dividend stock that could be a buy right now is Rio Tinto. It is one of the largest miners in the world with a portfolio of high-quality assets and operations across multiple commodities. This includes iron ore, copper, and lithium.

The team at Goldman Sachs sees plenty of value in the miner’s shares at current levels. It recently put a buy rating and $140.20 price target on them. This suggests potential upside of 16% for investors.

In respect to income, the broker is expecting fully franked dividends per share of US$4.38 (A$6.66) in FY 2024 and then US$4.63 (A$7.04) in FY 2025. Based on the latest Rio Tinto share price of $120.55, this will mean yields of approximately 5.5% and 5.8%, respectively.

Super Retail Group Ltd (ASX: SUL)

Finally, Goldman Sachs also believes that Super Retail could be an ASX dividend stock to buy. It is the retail giant behind the popular BCF, Macpac, Rebel, and Super Cheap Auto brands.

Goldman Sachs is very positive on the retailer and has a buy rating and $17.80 price target on its shares. This implies potential upside of 16% from current levels.

As for dividends, the broker is expecting some good yields from its shares over the next couple of years. Its analysts are forecasting fully franked dividends per share of 67 cents in FY 2024 and then 73 cents in FY 2025. Based on the latest Super Retail share price of $15.30, this will mean dividend yields of 4.4% and 4.8%, respectively.

The post These high-yield ASX dividend stocks can rise 15% to 20% appeared first on The Motley Fool Australia.

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More reading

• Top ASX dividend shares to buy in April 2024
• Rio Tinto share price slips amid an unrelenting ESG grilling
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices
• 5 things to watch on the ASX 200 on Friday
• $10,000 invested in these ASX 300 dividend shares would generate this much passive income

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 Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. 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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It looks set to be another great session for ASX 200 gold stocks on Monday after the price of the precious metal climbed to yet another record high.

According to CNBC, the spot gold price was up 1.6% to a record of US$2,345.4 an ounce.

This was gold’s third consecutive week of gains and was driven by U.S. interest rate cut bets, speculative buying, and central bank purchases.

In light of this, you may think that it is too late to invest in any ASX 200 gold miners. But you would be wrong, according to analysts at Goldman Sachs.

This morning, the broker has named three miners that it believes investors can pick up at current levels.

Which ASX 200 gold stocks are buys?

The first gold share to look at is De Grey Mining Limited (ASX: DEG). Goldman has a buy rating and $1.45 price target on its shares, which implies potential upside of 12% for investors from current levels.

It believes the gold developer could be a top option due to its tier one Hemi asset. The broker also sees the world class deposit as a potential takeover option for a larger player. It said:

While historically mining stocks tend to underperform through the execution and ramp-up phase of a project, we expect with Hemi positioned as a Tier 1 asset of global scale that post-DFS it remains an attractive potential strategic consolidation target.

Another ASX 200 gold stock that could be a buy according to the broker is Evolution Mining Ltd (ASX: EVN).

However, with a buy rating and $4.00 price target on the miner’s shares, this implies only modest upside for investors from current levels. It said:

Of the larger cap names EVN (Buy) remains our preference to NST (Neutral) on near-term FCF, and with exposure to further increases in copper pricing (~30% of EVN’s revenue over FY24-26E).

A third ASX 200 gold stock that could be worth a closer look according to Goldman Sachs is Gold Road Resources Ltd (ASX: GOR).

The broker currently has a buy rating and $2.00 price target on the miner’s shares. This suggests potential upside of approximately 20% for investors over the next 12 months. It recently said:

[W]e retain our Buy rating with GOR the only gold stock in our coverage without major growth spend, supporting cash generation (near-term FCF yields of c. 5-10% in CY24-27E remain attractive vs. peers and support upside to the outlook for capital returns), while trading at a significant discount to peers at ~0.9x NAV / ~4x NTM EV/EBITDA / pricing a LT gold price of US$1,575/oz (peer average ~1.1x NAV / 5-6x EV/EBITDA / ~US$1,930/oz LT gold).

The post 3 ASX 200 gold stocks to buy now appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• ASX 200 gold shares surging as gold price hits new records. Now what?

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 Goldman Sachs Group. 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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On Friday, the S&P/ASX 200 Index (ASX: XJO) ended the week deep in the red. The benchmark index fell 0.55% to 7,773.3 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market looks set to push higher on Monday following a strong finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 38 points or 0.5% higher. On Friday on Wall Street, the Dow Jones was up 0.8%, the S&P 500 rose 1.1%, and the Nasdaq climbed 1.25%.

Oil prices rise

ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a decent start to the week after oil prices rose again on Friday night. According to Bloomberg, the WTI crude oil price was up 0.4% to US$88.91 a barrel and the Brent crude oil price was up 0.6% to US$91.17 a barrel. Rising tensions in the Middle East gave oil prices another boost.

Buy Life360 shares

Life360 Inc (ASX: 360) shares could be great value following recent weakness in the tech sector according to analysts at Goldman Sachs. This morning, the broker has reiterated its buy rating and $14.20 price target on the location technology company’s shares. Commenting on its advertising plans, the broker said: “In our view little value is being imputed for ads given that the core subscription business remains undervalued, therefore we see valuation upside on successful execution.”

Gold price jumps

ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a great start to the week after the gold price jumped again on Friday. According to CNBC, the spot gold price was up 1.6% to US$2,345.4 an ounce. The precious metal hit a new record high and its third consecutive week of gains. This was driven by U.S. interest rate cut bets, speculative buying, and central bank purchases.

Magellan rated neutral

Goldman Sachs has been looking at the latest funds under management (FUM) update from Magellan Financial Group Ltd (ASX: MFG). In response, the broker has retained its neutral rating with an improved price target of $9.10. It said: “We note that FUM is tracking ahead of GSe primarily as a result of markets with flows broadly in line with expectations for the quarter. While flows were generally tracking better over Jan/Feb, March saw an increase in institutional outflows at $0.5bn for the month.”

The post 5 things to watch no the ASX 200 on Monday appeared first on The Motley Fool Australia.

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More reading

• Here’s how the ASX 200 market sectors stacked up last week
• 1 ASX 200 stock I’m buying hand over fist despite the market’s pessimism
• Here are the top 10 ASX 200 shares today
• Uh oh! Are Woodside shares facing a ‘dividend cliff’?
• 3 ASX 200 tech shares to buy now with less than $2,000

Motley Fool contributor James Mickleboro has positions in Life360 and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Life360. 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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If you are on the lookout for some new additions to your portfolio, then the ASX 200 shares listed below could be worth considering.

They have both been named as favoured shares by Bell Potter for the month of April. These are the shares that the broker believes “offer attractive risk-adjusted returns over the long term.”

Bell Potter also notes that when choosing its picks it considers the current macro-economic backdrop and investment environment, focusing on quality companies with proven track records, capable management, and competitive advantages.

You can read about the first two ASX 200 shares on the list here. Let’s now take a look at two more of the broker’s top picks:

Mineral Resources Ltd (ASX: MIN)

Bell Potter is a big fan of this mining and mining services company.

It likes Mineral Resources due to the earnings diversification it has from its focus on lithium, energy, and iron ore, as well as mining services. It explains:

In contrast to its peers, MIN completes everything from engineering, to construction, to all aspects of operations in-house. Our Buy view is underpinned by MIN’s earnings diversification, strong insider ownership, clearly articulated strategies, expertise in contracting and internal growth options at Onslow as well as potential lithium expansions including into downstream. All up, MIN offers diversified exposure to steady income streams from the contracting business and market-driven commodity exposure coupled with earnings derived from both lithium and iron ore.

Bell Potter currently has a buy rating and $75.00 price target on the company’s shares.

ResMed Inc. (ASX: RMD)

Another ASX 200 share that Bell Potter is feeling very bullish about is sleep disorder treatment company ResMed.

It believes ResMed has a long runway for growth thanks to its under penetrated market, increasing demand, and a major product recall from its main rival. Bell Potter explains:

The market for OSA and chronic obstructive pulmonary disease (COPD) remains under penetrated, and we expect industry volume growth to continue in the 6-8% range for the foreseeable future. In this regard, the competitive dynamics are very much in favour of RMD due to the Philips recall and improving semiconductor availability. […] Furthermore, ResMed is well-positioned to build on its dominant share even after Philips returns to the global market, with the launch of its latest continuous positive airway pressure (CPAP) device, the Air Sense 11.

The broker currently has a buy rating and $34.00 price target on ResMed’s shares.

The post Bell Potter names more of the best ASX 200 shares to buy appeared first on The Motley Fool Australia.

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More reading

• 5 ASX 200 shares for trying to build wealth after 50
• Are your big ASX 200 mining dividends in for a chop?
• Got $5,000? 5 ASX shares to buy for lasting wealth
• Why Cettire, Harvey Norman, Orora, and ResMed shares are sinking today
• Here’s why I think the Resmed share price should be 18% higher

Motley Fool contributor James Mickleboro has positions in ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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 200 utilities shares led the market sectors last week, with a 1.74% gain over the four trading days.

The S&P/ASX 200 Index (ASX: XJO) lost 1.62% over the week to finish at 7,773.3 points on Friday.

The benchmark index once again reset its all-time high last week, touching 7,910.5 points on Tuesday.

As my colleague Seb explained, investors were feeling optimistic given that inflation is moderating without a significant uptick in unemployment, opening the door to the possibility of lower interest rates later this year.

Only two of the 11 market sectors finished the week in the green.

Let’s review.

Utilities shares led the ASX sectors last week

Among the largest of the 22 ASX 200 utilities companies listed on the market, the stand-out for share price growth this week was AGL Energy Limited (ASX: AGL).

AGL shares rose by 2.51% to finish at $8.56 on Friday.

APA Group (ASX: APA) shares rose 1.67% over the four trading days to finish at $8.53.

The Origin Energy Ltd (ASX: ORG) share price lifted 1.41% to $9.28.

None of these companies had any official news out last week.

ASX utilities stocks outshone energy shares by only 0.24% this week, so let’s take a look at how the big energy players did as well.

Ampol Ltd (ASX: ALD) shares led the ASX 200 energy large-caps with a 4.01% lift to $41.28 on Friday.

Santos Ltd (ASX: STO) shares also had a good week, up 2.52% to $7.93 apiece.

The Woodside Energy Group Ltd (ASX: WDS) share price gained 0.59% to close at $30.60 on Friday, and investors were paid their dividends on Thursday.

It was quiet on the news front for these energy stocks as well.

There was no official news from any of them. However, here at the Fool, my colleague Bernd was pondering whether now is the time to invest in ASX 200 energy shares.

We also got a look at the Federal Government’s new 5-year commodity price forecasts for oil and gas.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the four trading days:

S&P/ASX 200 market sector	Change last week
Utilities (ASX: XUJ)	1.74%
Energy (ASX: XEJ)	1.5%
Materials (ASX: XMJ)	(0.53%)
Industrials (ASX: XNJ)	(1.37%)
Financials (ASX: XFJ)	(1.45%)
Consumer Staples (ASX: XSJ)	(2.03%)
Communication (ASX: XTJ)	(2.15%)
Healthcare (ASX: XHJ)	(2.82%)
Consumer Discretionary (ASX: XDJ)	(2.94%)
A-REIT (ASX: XPJ)	(4%)
Information Technology (ASX: XIJ)	(4.73%)

The post Here’s how the ASX 200 market sectors stacked up last week appeared first on The Motley Fool Australia.

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More reading

• 1 ASX 200 stock I’m buying hand over fist despite the market’s pessimism
• Does a 6.5% yield with relative stability sound good? Consider this ASX energy giant
• Here are the top 10 ASX 200 shares today
• Uh oh! Are Woodside shares facing a ‘dividend cliff’?
• Why is the ASX 200 ending the week with a whimper?

Motley Fool contributor Bronwyn Allen has positions in Woodside Energy Group. 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 positions in and has recommended Apa Group. 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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Are you on the lookout for some ASX dividend shares to buy when the market reopens? If you are, read on because there are three quality options listed below that have recently been named as buys and tipped to offer attractive dividend yields.

Here’s what analysts are saying about these income options:

Coles Group Ltd (ASX: COL)

Analysts at Morgans think that Coles would be a top ASX dividend share to buy when the market reopens. It is of course one of Australia’s largest supermarket operators. In addition, it has a large liquor store network under brands including Vintage Cellars and Liquorland.

Morgans was impressed with its performance in the first half, noting that its earnings came in ahead of expectations. It also highlights that its sales growth early in the second half has been stronger than its arch rival.

In light of this, it is now forecasting fully franked dividends of 66 cents per share in FY 2024 and 69 cents per share in FY 2025. Based on the current Coles share price of $16.39, this implies yields of approximately 4% and 4.2%, respectively.

Morgans has an add rating and $18.70 price target on its shares.

Orora Ltd (ASX: ORA)

Goldman Sachs continues to believe that this packaging company could be an ASX dividend share to buy despite its bleak update last week.

While its disappointing update has led to earnings estimates downgrades and a trimmed valuation, the broker still expects some big (and growing) dividend yields in the coming years.

Goldman is forecasting dividends per share of 12 cents in FY 2024, 13 cents in FY 2025, and 15 cents in FY 2026. Based on the current Orora share price of $2.21, this will mean yields of 5.4%, 5.9%, and 6.8%, respectively.

The broker has a buy rating and $3.00 price target on its shares.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share that Goldman Sachs is a fan of is Australia’s largest telco, Telstra.

It likes the company due to its low risk earnings and dividend growth over the coming years.

The broker expects this to underpin fully franked dividends of 18 cents per share in FY 2024 and 19 cents per share in FY 2025. Based on the current Telstra share price of $3.83, this equates to yields of 4.7% and 5%, respectively.

Goldman has a buy rating and $4.55 price target on Telstra’s shares.

The post Buy Telstra and these ASX dividend shares next week appeared first on The Motley Fool Australia.

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More reading

• 3 ‘forever’ ASX dividend shares to build your wealth
• These ASX 200 shares could rise 20% to 50%
• 2 ASX dividend shares to beat inflation
• Own Telstra shares? Here’s why the ASX 200 telco just backed this AI startup
• Bell Potter names the best ASX 200 shares to buy in April

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 Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool Australia has recommended Orora. 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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It has been another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

BHP Group Ltd (ASX: BHP)

According to a note out of Goldman Sachs, its analysts have retained their buy rating on this mining giant’s shares with a slightly reduced price target of $49.20. Goldman Sachs has been running the rule over the mining sector ahead of the release of quarterly updates this month. It believes BHP will deliver a reasonably solid quarterly update. For example, the broker expects copper and metallurgical coal production to increase quarter on quarter. But the main reasons the broker is positive are BHP’s attractive valuation, its optionality with a +US$20 billion copper pipeline and strong production growth, and its robust free cash flow generation. The BHP share price was trading at $44.35 on Friday.

Mesoblast Ltd (ASX: MSB)

A note out of Bell Potter reveals that its analysts have retained their speculative buy rating on this cellular medicines developer’s shares with an increased price target of $1.40. Bell Potter points out that the FDA has informed Mesoblast that available clinical data from a Phase 3 study for children with steroid refractory acute graft versus host disease appears sufficient to support a resubmission of the Biological Licence Application for its Remestemcel product. It believes the timing of the correspondence is no coincidence. The broker highlights that there is refreshed leadership at the newly formed Office of Therapeutic Products at the FDA. In light of this, its analysts have renewed confidence for a prospective approval of Remestemcel later this year. It also feels that a first approval may represent a gateway to a series of label expansions in the ensuing period. The Mesoblast share price was fetching 86.5 cents at the end of the week.

Treasury Wine Estates Ltd (ASX: TWE)

Analysts at UBS have retained their buy rating on this wine giant’s shares with an improved price target of $15.25. This follows confirmation that the Chinese Ministry of Commerce (MOFCOM) is removing tariffs from Australian wine imports into China. According to the note, UBS was pleased with the news and believes that Treasury Wine’s shares now deserve to trade on higher earnings multiples. Especially given that this news increases its addressable market. Its analysts have also lifted their earnings estimates to reflect the news and higher margin assumptions for its premium wine. The Treasury Wine share price ended the week at $12.86.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Why is everyone talking about Mesoblast shares?
• Why the Mesoblast share price can rise another 60%
• Brokers name 3 ASX shares to buy now
• 2 ASX 200 retirement shares to buy now
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Treasury Wine Estates. 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 Vanguard Australian Shares Index ETF (ASX: VAS) is a popular investment on the ASX. How popular? Well, it’s only the largest index fund by funds under management, with more than $14.7 billion invested as of 29 February.

But while many ASX investors own VAS units as at least a part of their ASX portfolio, many others shun this exchange-traded fund (ETF). One of the most oft-cited reasons why is its perceived weight towards bank shares and mining stocks. You’ll often hear things like ‘VAS is just a banks and miners fund’ from this ETF’s detractors.

So today, let’s investigate whether this popular index fund is just a big bet on banks and miners.

To start with, let’s go over how the Vanguard Australian Shares ETF works. It is an index fund that mirrors the S&P/ASX 300 Index (ASX: XKO), so it’s exposed to the 300 largest shares on the ASX by market capitalisation.

How does the Vanguard Australian Shares ETF work?

This might make the ETF sound inherently diversified already. After all, the largest 300 shares on the ASX include companies ranging from Coles Group Ltd (ASX: COL) and Telstra Group Ltd (ASX: TLS) to JB Hi-Fi Ltd (ASX: JBH) and Xero Ltd (ASX: XRO). It’s not all banks and miners.

But there’s a catch. Although VAS’s ASX portfolio does include 300 different companies, not all of them are treated equally. In fact, none of them are.

Each one is assigned a weighting (a percentage of VAS’s overall portfolio) based on its size, or market cap. This means that the largest shares have a heavier weight (and thus more influence on the ETF’s returns) than the smaller ones in the Vanguard Australian Shares ETF’s portfolio.

As it happens, the big banks and miners are some of the largest companies in Australia. Because of this, they do have more influence on VAS’s ASX performance than other sectors. How much more?

Well, let’s look at the numbers.

As of 29 February, the 15 largest shares in VAS’ portfolio were as follows:

1. BHP Group Ltd (ASX: BHP)
2. Commonwealth Bank of Australia (ASX: CBA)
3. CSL Ltd (ASX: CSL)
4. National Australia Bank Ltd (ASX: NAB)
5. Westpac Banking Corp (ASX: WBC)
6. ANZ Group Holdings Ltd (ASX: ANZ)
7. Wesfarmers Ltd (ASX: WES)
8. Macquarie Group Ltd (ASX: MQG)
9. Woodside Energy Group Ltd (ASX: WDS)
10. Goodman Group (ASX: GMG)
11. Rio Tinto Ltd (ASX: RIO)
12. Telstra Group Ltd (ASX: TLS)
13. Fortescue Ltd (ASX: FMG)
14. Transurban Group (ASX: TCL)
15. Woolworths Group Ltd (ASX: WOW)

If you see what I see, you’d agree that there are a lot of banks and miners there.

Is VAS just a big ASX bet on banks and miners?

In fact, the big four banks make up four of the six largest companies on the ASX. And the largest – BHP – is a miner.

Amongst these 15 stocks, I count five banks (including Macquarie, which is at least partially a bank) and four miners (including oil and gas stock Woodside).

But it gets worse for fans of diversification. BHP alone takes up a whopping 9.44% of VAS’s entire portfolio, while CBA is at 8.27%. This means for every $100 you invest in VAS units on the ASX, $9.44 will end up in BHP shares and another $8.27 in CBA stock.

Putting those five banks together, we get to a total weighted portfolio position of approximately 23.28%. So almost a quarter of a VAS investment is going into five ASX banks.

What about the miners? Well, adding up BHP, Rio, Fortescue and Woodside’s weightings, we get to an approximate 15.69%.

All up, out of a $100 VAS investment, $38.97 will go to BHP, CBA, NAB, Westpac, ANZ, Macquarie, Woodside, Rio Tinto, or Fortescue shares.

Out of the entire VAS portfolio, 29.7% of its weighted holdings are in financial shares, with another 22.4% in materials (mining) stocks. That’s a combined weighting of 52.1% to banks and miners.

Now, to be clear, the ASX’s banks and miners are world-class. Some investors may not have a problem with this allocation (and the high levels of dividend income it can facilitate). But it’s hard to argue that an ASX investment in VAS units is anything other than a big bet on the banks and mining stocks.

Take that how you will.

The post Is the Vanguard Australian Shares ETF (VAS) just a big ASX bet on banks and miners? appeared first on The Motley Fool Australia.

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• 3 excellent ASX ETFs for smart investors in April
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Motley Fool contributor Sebastian Bowen has positions in CSL, National Australia Bank, Telstra Group, Wesfarmers and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, Macquarie Group, Transurban Group, Wesfarmers, and Xero. The Motley Fool Australia has positions in and has recommended Coles Group, Macquarie Group, Telstra Group, Wesfarmers, and Xero. The Motley Fool Australia has recommended CSL, Goodman Group, and Jb Hi-Fi. 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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Why else would an investor buy an ASX growth stock if not for market-beating potential? After all, it’s all in the name. Since most growth stocks either pay insignificant dividends or none at all, the returns you get from them typically come in the form of share price growth – hence the name.

I don’t own too many ASX shares you could classify as ‘growth stocks’ in my own ASX portfolio. But I do own one that I think has the potential to beat the S&P/ASX 200 Index (ASX: XJO) handily over the next few years and even decades.

It’s the BetaShares Nasdaq 100 ETF (ASX: NDQ). Now this investment isn’t technically an ASX share. Rather it is an exchange-traded fund (ETF) and index fund that holds 100 of the largest shares on the Nasdaq stock exchange.

Why do I think this ASX growth stock will beat the ASX 200?

The Nasdaq is one of the two major stock exchanges in the United States, the other being the New York Stock Exchange. It is known for being the ‘cooler’ of the two, housing almost all of the major US tech stocks.

Its top holdings are the ‘magnificent seven’ stocks we’ve all become increasingly familiar with over the past decade – the likes of Apple, Microsoft, Amazon, Alphabet, NVIDIA, Meta Platforms and Tesla.

But NDQ also houses many other famous growth stocks, including PayPal, Netflix, Adobe, Costco, Booking Holdings, Starbucks and Airbnb.

These names are obviously some of the highest-quality and most dominant companies (and growth stocks) in the world.

But this ETF that holds them has a long track record of delivering performances that shred those that the ASX has delivered.

Over the past five years (as of 29 February), NDQ units have returned an average of 22.98% per annum (including dividends). The index that this fund tracks has averaged a return of 21.82% per annum over the past ten years.

In contrast, an ASX 200 index fund in the iShares Core S&P/ASX 200 ETF (ASX: IOZ) has returned an average of 8.52% per annum over the past five years, and 7.79% over the past ten.

Now past performances are never a guarantee of future returns. But given the innovative and disruptive nature of the world-class growth stocks in the Nasdaq 100 ETF compared to the ASX, I’d be willing to bet that this outperformance continues well into the future.

The post I think this ASX growth stock has market-beating potential appeared first on The Motley Fool Australia.

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• Which ASX ETFs give Aussie investors access to US stocks?
• How much would I have now if I’d invested $10,000 in the BetaShares Nasdaq 100 ETF (NDQ) a year ago?
• Buy and hold these ASX ETFs until 2034
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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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Adobe, Airbnb, Alphabet, Amazon, Apple, Betashares Nasdaq 100 ETF – Currency Hedged, Costco Wholesale, Meta Platforms, Microsoft, Starbucks, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Airbnb, Alphabet, Amazon, Apple, BetaShares Nasdaq 100 ETF, Booking Holdings, Costco Wholesale, Meta Platforms, Microsoft, Netflix, Nvidia, PayPal, Starbucks, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short March 2024 $67.50 calls on PayPal. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Adobe, Airbnb, Alphabet, Amazon, Apple, Betashares Nasdaq 100 ETF – Currency Hedged, Booking Holdings, Meta Platforms, Netflix, Nvidia, PayPal, and Starbucks. 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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