Generating a high level of ASX passive income sounds like a wonderful thing. Imagine seeing $500 flow into your bank account every month, or even $1,000.

So how much are people willing to sacrifice to make that happen? The price could be as little as a daily coffee.

Find those savings

When it comes to money, everyone’s finances are different. Someone earning $1 million a year has more financial flexibility to allocate to investing each month than the average income earner.

It’s likely household budgets are tighter these days after all the inflation and interest rate hikes.

If someone has only a little money to invest each month after paying for the bare essentials, then it comes down to choices. It’d be easy to say, “get a better-paying job”, but sometimes that’s not an option.

Working longer and longer hours may not be the best choice either – we aren’t robots. Having a break, taking care of yourself, and spending time with family and friends are usually good things for life and enjoyment.

For me, I’d rather avoid spending a certain amount each month than give up my time doing something that I enjoy.

It’s about the dollar amount saved rather than the activity or product itself. Everyone spends on different stuff. If we want to make ASX passive income, we need to come up with some savings. It could be the $5 or $10 daily coffee, it could be subscriptions like Netflix and Foxtel, or something else.

The idea is to cut out spending that isn’t truly making a difference to our happiness.

How much ASX passive income could we make?

Let’s say we cut $40 a week out of spending and start investing that into ASX shares. That translates into $2,080 per year if we save every single week.

Saving $2,000 doesn’t make us an instant millionaire. Investing $2,000 with a 6% dividend yield would create $120 of annual ASX passive income. That’s not a bad start, and the $120 would hopefully grow with organic business dividend increases over time.

But, the power of compounding can help us make that $40 a week grow much bigger.

If we invested $40 a week for 10 years, and the share portfolio achieved total returns of 10% per year, that would grow to $33,150. With a 6% dividend yield, this would generate around $2,000 of annual ASX passive income.

Doing that same exercise but running it for 20 years, the portfolio could grow to be worth $119,132. With a 6% dividend yield, that’d turn into around $7,150 of annual dividends or almost $600 per month.

That’s a lot of extra cash flow, right? Investors just need to decide what they’re willing to do to save while still enjoying life.

The post Would you trade your daily coffee for ASX passive income? appeared first on The Motley Fool Australia.

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More reading

• Get an income boost with these ASX dividend shares: broker
• How I’d generate a $30,000 retirement income from the Vanguard Australian Shares Index ETF
• 2 highly-rated ASX growth shares to buy according to experts
• How do I cash in my Newcrest shares if US giant Newmont takes over?
• Forget term deposits! I’d listen to Warren Buffett and invest $250 a month to try to retire rich

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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Wanting a passive income boost? If you are, then you may want to consider the two dividend shares listed below.

Both are rated as buys by Morgans and tipped to provide investors with attractive dividend yields in the near term. Here’s what you need to know about them:

Coles Group Ltd (ASX: COL)

The first ASX dividend share that Morgans has tipped as a buy is Coles.

Its analysts are positive on the supermarket giant due to its defensive qualities, favourable changes in consumer shopping trends, and its solid balance sheet. It commented:

We continue to see COL as offering good value with the company’s solid balance sheet and defensive characteristics putting it in a good position to navigate through a weaker economic environment. The unwinding of local shopping should also help further market share gains.

Morgans has an add rating and $19.50 price target on its shares.

As for dividends, the broker is expecting fully franked dividends per share of 64 cents in FY 2023 and 66 cents in FY 2024. Based on the current Coles share price of $17.93, this implies yields of 3.55% and 3.7%, respectively.

Mineral Resources Ltd (ASX: MIN)

Another ASX dividend share that Morgans rates as a buy is Mineral Resources.

Its analysts like the mining and mining services company due to its exposure to lithium and iron ore. It believes they are an ideal combination to benefit from the China re-opening. The broker said:

We see MIN’s lithium / iron ore market exposures as an ideal combination to benefit from the China re-opening increase in demand during 1H’CY23. We also see MIN as well placed to grow into its valuation, even if we see unexpected metal price volatility, given the magnitude of organic growth in the pipeline.

Morgans currently has an add rating and $99.40 price target on its shares.

In respect to dividends, Morgans is forecasting fully franked dividends of $4.04 per share in FY 2023 and $6.21 per share in FY 2024. Based on the current Mineral Resources share price of $89.65, this will mean 4.5% and 6.9% dividend yields, respectively.

The post Get an income boost with these ASX dividend shares: broker appeared first on The Motley Fool Australia.

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More reading

• Why Morgans just added these ASX 200 shares to its best ideas list
• These ASX 200 shares are top picks in Macquarie’s growth portfolio
• With interest rates heading higher again, the risk is to the downside for these popular blue chip ASX shares
• 2 ASX stocks I’d buy in February for lifelong passive income
• Does the Coles dividend forecast make it a great buy for 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles 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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As we covered here earlier today, there are plenty of exchange traded funds (ETFs) for investors to choose from on the Australian share market.

One of the most popular options out there is the Vanguard Australian Shares Index ETF (ASX: VAS).

It seeks to track the return of the S&P/ASX 300 Index before taking into account fees, expenses, and tax.

This index might not be as closely followed as the illustrious S&P/ASX 200 Index (ASX: XJO), but it isn’t short of quality.

It provides investors with quick and easy access to 300 of the largest companies on the Australian share market.

This means you’ll be buying a diverse group of shares such as mining giant BHP Group Ltd (ASX: BHP), banks like Commonwealth Bank of Australia (ASX: CBA), and retailers including Woolworths Group Ltd (ASX: WOW).

Another positive with the ETF is that it pays investors a quarterly dividend, with an annual yield currently sitting at 4.5%.

Overall, this could make it a great option for a retirement portfolio.

What would it take to generate $30,000 of retirement income?

If you’re in retirement and already have a large lump sum to invest, it would take a rather devilish investment of $666,666 into the ETF to yield $30,000 in dividend income each year at present.

But if you don’t have this level of money available to invest, then you could look at making it a long-term quest.

While past performance is no guarantee of future performance, the share market has historically provided investors with an average total return of 10% per annum.

If it were to do the same over the next 20 years, this ETF followed suit, and you reinvested your dividends, then a $10,000 annual investment would grow into the desired amount a few months after the end of the second decade.

At that point, you can sit back and reap the rewards of your investments. You will also be left with a portfolio that still has the potential to grow at a decent rate even after cashing out your dividends.

The post How I’d generate a $30,000 retirement income from the Vanguard Australian Shares Index ETF appeared first on The Motley Fool Australia.

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More reading

• 2 ASX stocks I’d buy in February for lifelong passive income
• How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year
• ASX shares: Is this my once-in-a-lifetime chance for mega returns?
• How to create a million-dollar ASX share portfolio in two decades
• Buying ASX shares as a beginner? Here are 3 things I wish I’d known

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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Are you a growth investor looking for new investments? Well, the good news is that the ASX growth shares listed below have been tipped as buys.

Here’s why experts rate them highly right now:

Allkem Ltd (ASX: AKE)

If you’re not averse to investing in the resources sector and have a higher than average tolerance for risk, then it could be worth considering Allkem.

It became one of the world’s largest lithium miners after Galaxy Resources and Orocobre merged in 2021. It has assets in Australia, South America, and North America.

And from these projects, Allkem has significant production capacity. In fact, management believes it can increase its production in a manner that allows it to maintain a 10% share of global lithium supply over the long term.

It is partly for this production growth, as well as its downstream optionality, that Goldman Sachs is bullish on Allkem at the same time it is bearish on the lithium industry.

Goldman has a buy rating and $15.50 price target on Allkem’s shares. This implies potential upside of 23% for investors from current levels.

WiseTech Global Ltd (ASX: WTC)

Another ASX growth share that has been tipped as a buy is WiseTech.

It is the technology company behind the industry-leading logistics solutions platform, CargoWise One. This platform allows users to execute complex logistics transactions and manage freight operations.

WiseTech has been growing at a strong rate for years and appears well-placed to continue this trend in the near term. For example, management is guiding to “20%-23% revenue growth and 21%-30% EBITDA growth.”

Morgan Stanley is confident on the company’s outlook. As a result, it has put an overweight rating and $64.00 price target on its shares. This suggests potential upside of almost 18% for investors.

The post 2 highly-rated ASX growth shares to buy according to experts appeared first on The Motley Fool Australia.

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More reading

• 2 explosive ASX growth shares to buy now according to analysts
• Which ASX 200 shares are rebounding fastest in 2023?
• Here are the top 10 ASX 200 shares today
• Happy days! 8 ASX 200 shares smashing new 52-week highs on Thursday
• 3 ASX 200 tech shares going gangbusters on Thursday

Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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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Investors with shares in gold miner Newcrest Mining Ltd (ASX: NCM) had broad smiles on their faces this week after US giant Newmont Corporation (NYSE: NEM) proposed to acquire it.

The Newcrest share price jumped 14% immediately upon the news, although its board has not yet accepted nor rejected the $24 billion offer.

While there is some debate as to whether Newmont should be offering a bit more to Newcrest shareholders, what if eventually a deal is done?

As an all-scrip deal, Newcrest investors will receive Newmont stock upon acquisition.

But what if you don’t want to own US stocks? How do you cash out?

Shaw and Partners portfolio manager James Gerrish, in a Market Matters Q&A, explained how one could do that:

Newmont could do a Resmed

According to Gerrish, Newmont will likely list on the ASX once the acquisition completes. 

“We would assume if Newmont [is] successful, they would create a dual listing structure, so the merged entity would remain listed on the ASX.”

The merged entity could do this by listing in Australia as a chess depository interest, which is a stock that allows investors to simulate owning Newmont shares on the NYSE.

Some current examples of this are US healthcare device maker Resmed CDI (ASX: RMD) and UK banking group Virgin Money UK CDI (ASX: VUK).

Once the CDI is created, it’s easy to cash in.

“Holders could then sell their stock if they wanted to as normal.”

So that’s all well and good for Newcrest shareholders, but what’s in it for Newmont? Why would it go to the expense of listing in a foreign country?

Gerrish explained there is good incentive for overseas businesses to also list on the ASX.

“One of the reasons why they would do this deal is to tap into the funding pool in Australia,” he said.

“So a listing here makes total sense.”

Newcrest shares are up 9% over the past 12 months while paying a dividend yield of 1.6%.

Meanwhile, the Newmont stock price is down 21.4% for the same period while returning a dividend yield of 4.6%. 

The post How do I cash in my Newcrest shares if US giant Newmont takes over? appeared first on The Motley Fool Australia.

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More reading

• Buy NAB and this ASX 200 blue chip share: brokers
• 5 things to watch on the ASX 200 on Friday
• Takeover bid undervalues Newcrest shares: Citi analysts
• Here are the top 10 ASX 200 shares today
• Here’s why analysts rate these blue chip ASX 200 shares as buys

Motley Fool contributor Tony Yoo 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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While term deposit rates are improving as the cash rate rises and offer a safe source of income, they will never be the best asset for growing your wealth.

That’s because the returns on offer with term deposits pale in comparison to historical share market returns.

For example, at present, Commonwealth Bank of Australia (ASX: CBA) is offering 3.75% per annum on 12-month term deposits. Whereas the share market has historically provided investors with a 10% per annum return.

And while term deposit rates could still rise a touch more in the coming months if the RBA takes rates higher, I believe they are close to peaking given how inflation is now easing.

Term deposits versus ASX shares

Let’s say we invest $100,000 into a term deposit that yields 4% per annum. In 10 years, you would have grown your investment to $148,000 if you reinvested the proceeds each year.

Whereas, if you generated a 10% per annum return from the share market, your $100,000 investment would have become $259,000 in a decade.

That’s a $100,000+ difference!

And while there are risks to investing in the share market, unlike term deposits, and past performance is not a guarantee of future returns, I believe the risk/reward on offer is compelling enough to choose ASX shares over term deposits.

Buy shares like Warren Buffett

Consider taking the Warren Buffett approach if you choose to invest in ASX shares instead of term deposits.

Over several decades, the Oracle of Omaha has delivered market-beating returns for his company Berkshire Hathaway thanks to his focus on buying high-quality companies with competitive advantages, strong business models, and fair valuations.

The good news is that there’s no shortage of quality in the Australian share market. ASX shares such as Macquarie Group Ltd (ASX: MQG), REA Group Ltd (ASX: REA), and TechnologyOne Ltd (ASX: TNE) tick a lot of these boxes and could be worth further investigation.

Alternatively, the popular VanEck Morningstar Wide Moat ETF (ASX: MOAT) enable investors to buy a collection of Buffett-type stocks through a single investment.

Investing $250 a month in ASX shares or term deposits

You don’t just have to start with a large lump sum of money to grow your wealth Buffett-style.

By investing $250 a month, you have the potential to retire rich if you start early enough.

For example, thanks to compounding, if you were to invest $250 a month for 30 years and average a 10% per annum return, you would grow your wealth to approximately $520,000. Whereas doing the same with term deposits would yield approximately $172,000 at a 4% interest rate.

If you have a longer investment horizon of 40 years, your returns would be $1.4 million and $291,000, respectively, all else equal.

All in all, I believe this demonstrates why ASX shares are the superior option for investors looking to retire rich.

The post Forget term deposits! I’d listen to Warren Buffett and invest $250 a month to try to retire rich appeared first on The Motley Fool Australia.

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More reading

• Top ASX ETFs to buy in February 2023
• Why AGL, New Hope, News Corp, and REA shares are dropping today
• REA share price tumbles on half year earnings miss
• 5 things to watch on the ASX 200 on Friday
• Macquarie has these ASX 200 dividend shares in its income portfolio

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 Berkshire Hathaway. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Berkshire Hathaway, REA Group, Technology One, and VanEck Morningstar Wide Moat ETF. 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) shares offer investors an excellent means to build a portfolio that delivers regular passive income. 

That’s because atop of potentially gaining in value, many ASX 200 shares also pay regular dividends.

Many of them also offer franking credits on their dividend payouts. Meaning the passive income you receive could come with some healthy tax benefits. The value of those benefits will depend on an individual investor’s other taxable income.

With that said, here are two ASX 200 shares delivering $910 a year in passive income on a $10,000 investment.

Dividends from copper and iron ore

First up we have mining giant BHP Group Ltd (ASX: BHP).

The BHP share price, pictured below, is up 25% over the past six months.

BHP pays a fully franked, trailing dividend yield of 9.7%.

At that yield, the ASX 200 share pays $485 in passive income per year on a $5,000 investment.

Now, we are talking about the dividends paid out over the past year. And there are no guarantees on the dividend payouts investors can expect from BHP in the 12 months ahead.

But the ASX 200 mining share remains in a strong position. BHP gets most of its revenue from iron ore, with copper its second biggest earner.

Iron ore is currently trading for US$124 per tonne. That’s up from less than US$82 per tonne in early November. And with China continuing to reopen from its multi-year COVID closures, I believe investors can expect iron ore prices to remain well above US$100 per tonne over the next year.

The story for copper is similar. The red metal is currently valued at US$8,893 per tonne, up from US$7,627 in early November. In strong demand from the EV markets as well as construction, copper prices should remain resilient in 2023, if the world can avoid slipping into recession.

Which brings us to…

A high yielding ASX 200 energy share

Our second ASX 200 share for passive income is Woodside Energy Group Ltd (ASX: WDS).

The Woodside share price, as shown in the chart below, has gained 14% over the last six months.

Woodside pays a fully franked, trailing dividend yield of 8.5%.

At that yield, this ASX 200 share pays $425 in passive income per year on a $5,000 investment.

Taken together with BHP, the two dividend streams would provide a passive income of $910 per year.

And as with BHP, I believe the outlook for Woodside’s dividend payouts and share price remains positive.

Crude oil is well off its March 2022 highs, with Brent crude currently fetching US$84 per barrel. But with limited new investment in exploration and development amid resurgent forecast global demand, I believe oil and gas prices are more likely to rise from here than fall.

Goldman Sachs, for example, forecasts crude oil will head back above US$100 per barrel in 2023.

Foolish takeaway

While these two ASX 200 shares have the potential to offer investors $910 of passive income on a $10,000 investment, there are no guarantees on any future payments. And investors shouldn’t forget about the benefits of diversification.

Rather than focus on only these two stocks, investors should identify stocks with similar high yields and strong outlooks to build a portfolio of ASX 200 shares for a healthy passive income stream.

The post ASX 200 shares: How to invest $10,000 to get $910 per year in passive income appeared first on The Motley Fool Australia.

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More reading

• Own BHP shares? Here’s what the market expects from its half year results
• 5 things to watch on the ASX 200 on Friday
• Why Morgans just added these ASX 200 shares to its best ideas list
• Can the BHP share price keep rising or has it peaked?
• This little-known ASX share offers ‘inflation protection at a reasonable price’: fund manager

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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Over the past 20 years, the popularity of exchange-traded funds (ETFs) has exploded. There are now more than 200 ASX ETFs available to invest in on the Aussie bourse.

These include a broad range of Australian and international index funds as well as those seeking to track a particular sector, commodity or theme.

One of the best things about ASX ETFs is their ability to add instant diversification to an investment portfolio. Even by owning a mere one or two such funds, an investor has the potential to gain investment exposure to a variety of sectors, company sizes and international markets.

But with so many now available, choosing where to invest can be challenging. So, we asked our Foolish writers which ASX ETFs they think offer top buying right now. Here is what the team came up with:

7 best ASX ETFs for February 2023 (smallest to largest)

VanEck Global Clean Energy ETF (ASX: CLNE), $126.62 million

Betashares Global Quality Leaders ETF (ASX: QLTY), $353.86 million

VanEck Morningstar Wide Moat ETF (ASX: MOAT), $494.11 million

Betashares Global Cybersecurity ETF (ASX: HACK), $640.44 million

Betashares Nasdaq 100 ETF (ASX: NDQ), $2.54 billion

BetaShares Australia 200 ETF (ASX: A200), $2.74 billion

VanEck MSCI International Quality ETF (ASX: QUAL), $3.07 billion

(Market capitalisations as at market close on 10 February 2023)

Why our Foolish writers love these ASX exchange-traded funds

VanEck Global Clean Energy ETF

What it does: The VanEck Global Clean Energy ETF aims to invest in the 30 largest and most liquid global companies working in clean energy production, as well as associated technology and equipment.

By Brooke Cooper: Part of being a long-term investor is looking to the horizon in an effort to envisage what the world might look like in 10, 20, or 50 years’ time. And one megatrend I think will be here to stay is the energy transition.

I expect demand for renewable energy sources – and investment in the space – will continue increasing as the world moves to decarbonise.

But how might one make the most of such an opportunity? There’s an ASX ETF for this!

I think the VanEck Global Clean Energy ETF could be an easy way to get exposure to the decarbonisation megatrend.

Motley Fool contributor Brooke Cooper does not own units of the VanEck Global Clean Energy ETF.

Betashares Global Quality Leaders ETF

What it does: This ETF invests in a portfolio of 150 global companies that rank highly on quality metrics. Those four metrics include return on equity (ROE), debt-to-capital, cash flow generation ability and earnings stability.

By Tristan Harrison: Global shares suffered in 2022 as higher interest rates enabled investors to generate semi-decent returns from traditionally safer asset classes like cash and bonds.

Since the end of 2021, the Betashares Global Quality Leaders ETF has dropped by close to 20%. I don’t believe the businesses this ASX ETF holds have seen a 20% reduction in their quality. But, they are now a fifth cheaper than before.

Also, in a potential downturn, I think the high-quality shares within this ETF are more likely than the average business to perform well.

For an annual management fee of just 0.35%, I like the diversification and quality overlay this ETF has to offer.

Motley Fool contributor Tristan Harrison does not own units of the Betashares Global Quality Leaders ETF.

VanEck Morningstar Wide Moat ETF

What it does: This ETF invests in a portfolio of US shares identified as having an intrinsic competitive advantage.

By Sebastian Bowen: This actively-managed ETF is one of my oldest and most valued investments. It invests in a basket of US shares that have been identified as possessing a wide moat, or distinct competitive advantage.

This is a concept popularised by the legendary Warren Buffett and refers to characteristics, such as a strong brand, that help a company ward off competition.

The approach has worked well for this ETF, with the Wide Moat ETF averaging a 14.54% per annum return since 2015.

As such, this is an investment I would happily recommend this February.

Motley Fool contributor Sebastian Bowen owns units of the VanEck Morningstar Wide Moat ETF.

Betashares Global Cybersecurity ETF

What it does: This ASX ETF offers investors exposure to 36 large-cap global cybersecurity stocks, predominantly listed in the United States. Its top holdings are Broadcom, Cisco Systems, Fortinet, Infosys, and Palo Alto Networks.

By Bernd Struben: Among the lessons learned in 2022 is that cybercriminals are here to stay. This was driven home by the massive data breaches experienced by Optus and Medibank. And instances of hacking were far from limited to just those two big players.

Hoping to keep their data secure, 80% of larger Australian companies intend to increase their cybersecurity spending in 2023, according to research by Netskope. That’s after 63% of large companies reported ramping up spending in 2022.

With hackers targeting individuals and corporations across the world, global cybersecurity spending will most likely continue to grow in the foreseeable future. And I believe that should help support the Betashares Global Cybersecurity ETF price and its distribution payouts.

At the current price, this ASX ETF pays a trailing annual distribution yield of 8.3%, unfranked.

Motley Fool contributor Bernd Struben does not own units of the Betashares Global Cybersecurity ETF.

Betashares Nasdaq 100 ETF

What it does: This ETF invests in 100 of the largest non-financial businesses on the US NASDAQ exchange. Examples include Microsoft, Apple, Alphabet, Amazon, Tesla, Adobe, Intel, and Meta Platforms.

By Bronwyn Allen: We live in a high-tech age, and that’s never going to change. I believe current short-term economic headwinds like rising inflation and interest rates are providing a great buy-the-dip opportunity on tech stocks.

I like the Betashares Nasdaq 100 ETF far more than some other tech-focused ETFs, like the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC). This is simply because NDQ holds a bunch of world-leading brands, whereas Australia’s tech sector is junior by comparison.

Personally, if I’m going to invest in tech, I prefer to put my money into an ETF with Microsoft-sized businesses that are earning great, reliable profits, as opposed to tech start-ups — even if they are promising.

The NDQ ETF share price lost 31% of its value over the 12 months of 2022, but it’s already up by around 11% in 2023!

Motley Fool contributor Bronwyn Allen does not own units of the Betashares Nasdaq 100 ETF.

BetaShares Australia 200 ETF

What it does: Providing cheap access to the top 200 Australian companies, this Betashares ETF is a no-frills way of earning the average return of the Australian share market. Closely emulating the S&P/ASX 200 Index (ASX: XJO), the A200 ETF predominantly comprises the big banks and miners.

By Mitchell Lawler: Trends come and go – sometimes they fail to materialise altogether. While I can see the value in sector-based or thematic ETFs, I much prefer to invest in companies, not themes.

Instead, where I see ETFs being highly valuable is for low-cost, passive index investing. It might be considered ‘boring’, but we know that the ASX 200 has always moved to higher highs over time, whilst also producing a delicious dividend yield.

Even the great Warren Buffett is a major proponent of low-cost index investing.

Notably, the Betashares Australia 200 ETF is the cheapest Australian shares ETF on offer – even beating those offered by Vanguard – with a management fee of 0.07%.

Motley Fool contributor Mitchell Lawler does not own units of the Betashares Australia 200 ETF.

VanEck MSCI International Quality ETF

What it does: This ASX ETF gives investors exposure to a diversified portfolio of approximately 300 quality, international companies listed on exchanges in developed markets around the world (excluding Australia).

By James Mickleboro: I think one of the best ways to grow your wealth is by investing in quality shares over a long period. This ETF provides investors with an easy way to do exactly that by pulling together approximately 300 of the world’s highest-quality companies.

To be included in the fund, a company needs to have low leverage, high earnings growth rates, and high returns on equity (ROE).

A few examples of companies that tick these boxes and are included in this ASX ETF are Apple, ASML, Microsoft, Nike, Nvidia, and Visa.

The VanEck MSCI International Quality ETF has fallen by almost 7% over the past year so could offer a buying opportunity in February.

Motley Fool contributor James Mickleboro does not own units of the VanEck MSCI International Quality ETF.

The post Top ASX ETFs to buy in February 2023 appeared first on The Motley Fool Australia.

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More reading

• 2 fantastic ETFs for ASX investors to buy and hold
• The smartest ASX shares to buy with $20 right now
• Top ASX growth shares to buy in February 2023
• 3 fantastic ETFs for ASX investors to buy in February
• How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Adobe, Alphabet, Amazon.com, Apple, BetaShares Global Cybersecurity ETF, BetaShares Nasdaq 100 ETF, Cisco Systems, Fortinet, Intel, Meta Platforms, Microsoft, Nike, Nvidia, Palo Alto Networks, Tesla, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: long January 2023 $57.50 calls on Intel, long January 2024 $420 calls on Adobe, long January 2025 $45 calls on Intel, long January 2025 $47.50 calls on Nike, long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF and BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended ASML, Adobe, Alphabet, Amazon.com, Apple, Meta Platforms, Nike, Nvidia, and VanEck Morningstar Wide Moat ETF. 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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Big dividend yields are always nice, but what if we could get strong gains as well?

Well, I have some good news for you. Listed below are a couple of ASX dividend shares that analysts believe offer both of these.

Here’s what you need to know:

HomeCo Daily Needs REIT (ASX: HDN)

The first ASX dividend share to look at is property company HomeCo Daily Needs.

It is focused on convenience-based assets across the target sub-sectors of Neighbourhood Retail, Large Format Retail and Health & Services.

The team at Morgans is positive on the company and has an add rating and $1.52 price target on its shares.

The broker highlights that HomeCo Daily Needs has significant development pipeline valued at over $500 million. It expects this to be supportive of solid growth in the future.

As for dividends, Morgans is forecasting dividends per share of 8.3 cents in FY 2023 and 8.5 cents in FY 2024. Based on the current HomeCo Daily Needs share price of $1.26, this will mean dividend yields of 6.6% and 6.75%, respectively.

Finally, the broker’s price target suggests potential upside of 20%.

Westpac Banking Corp (ASX: WBC)

Another ASX dividend share that has been tipped as a buy is Westpac.

It is of course Australia’s oldest bank and a member of the big four in Australia.

Goldman Sachs is a fan of the company and has a conviction buy rating and $27.68 price target on its shares.

The broker believes Westpac is well-placed to deliver solid earnings growth thanks to its cost reduction plans and rising interest rates.

It expects this to lead to fully franked dividends of 148.4 cents per share in FY 2023 and 160 cents per share in FY 2024. Based on the current Westpac share price of $23.84, this will mean yields of 6.2% and 6.7%, respectively.

Goldman’s price target for Westpac implies potential upside of 16% for investors.

The post Big yields and strong gains ahead for these ASX shares: analysts appeared first on The Motley Fool Australia.

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More reading

• 2 ASX shares with a dividend boost coming
• ASX 200 investors: A big bank stock that pays 5% dividend income
• Expect big yields from these ASX 200 dividend shares in 2023: analysts
• These are the best ASX dividend shares to buy: broker
• NAB shares: A top tip for 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie 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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The United Malt Group Ltd (ASX: UMG) share price was the second-best performer in the S&P/ASX 200 Index (ASX: XJO) today.

United Malt shares hit a high of $3.75 today, up 5.6% amid investors reacting positively to news delivered at the annual general meeting (AGM).

The commercial maltster finished the session on Friday at $3.72, a gain of 4.79%.

The ASX 200 benchmark itself finished down 0.8% to 7,433.7 points.

So, what did the chair of United Malt Group tell shareholders today?

Dividends are back!

United Malt Group chair Graham Bradley AM told shareholders the company expected to recommence paying dividends in FY23.

The ASX 200 share did not pay a final dividend in FY22 due to the company’s poor financial performance.

Bradley said:

Looking ahead, your Board expects a progressive recovery in earnings during FY23 and we expect
to resume dividend payments …

While certain challenges remain, several of these headwinds are expected to abate as FY23 progresses.

FY22 net profit after tax (NPAT) came in at $11.6 million, which was 20% down on FY21.

The company blamed resurgent COVID-19 impacts, a severe drought affecting the Canadian barley crop, significant disruption to ocean and rail supply chains, and increased freight and energy costs.

United Malt paid an interim dividend of 1.5 cents per share in FY22. This was equivalent to 40% of the full-year underlying NPAT.

This is well short of the company’s dividend payout ratio of approximately 60%.

What is United Malt doing to improve its financial performance?

Bradley said the company was progressing with several initiatives to streamline operations and rejig contracts after “a challenging year” in FY22.

United Malt is progressively re-negotiating prices and improving commercial terms with its largest customers.

Bradley explained that this “will reduce our risk exposure to barley supply, quality and prices and to additional energy costs and freight surcharges”.

He said the new pricing terms had been coming into effect since 1 January.

The impact “will flow through to our results from the second, third and fourth quarters of FY23”.

He added:

Our first half FY23 results (which we will report in May) will, therefore, reflect a half year when we combine two very different quarters and we will seek to highlight the improvement in the second quarter.

What’s the outlook for this ASX 200 share?

Bradley said the company expected “a further step-up in earnings in FY24”.

He said the North American crops were good, and the company did not expect to see the same supply or quality problems it experienced in FY22.

He said sea freight and container rates and availability were better, and gas prices were moderating.

The company confirmed earlier guidance of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) (before SaaS costs) of $140 million to $160 million.

This compares with an FY22 EBITDA (before SaaS costs) of $105.9 million, down 23% on FY21.

A potential headwind in FY23 is the possibility of reduced beer demand due to inflation and fears of a recession. Bradley said the company is “carefully monitoring” this aspect.

The post Why this ASX 200 share smashed the market with a 5% rally today appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Could an Aussie house price crash destroy the ASX 200 in 2023?
• The CBA share price is trading near all-time highs. Should you cash in?
• Guess which ASX 200 healthcare share is surging 5% on a new US patent?

Motley Fool contributor Bronwyn Allen 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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