If you’re wondering where to invest during these uncertain times, then the exchange traded funds (ETFs) listed below could be worth considering.

Both have just been rated as buys by analysts and tipped as top options in the current environment. Here’s what you need to know:

ETFS S&P 500 High Yield Low Volatility ETF (ASX: ZYUS)

The first ETF for investors to consider is the ETFS S&P 500 High Yield Low Volatility ETF.

This ETF aims to provide investors with a return that tracks the performance of the S&P 500 Low Volatility High Dividend Index. This index is designed to provide exposure to 50 high-yielding, low volatility stocks from the S&P 500 while meeting diversification and tradability requirements.

Among its holdings are IBM, Kinder Morgan, Kraft Heinz, Philip Morris, and Verizon.

Felicity Thomas from Shaw and Partners is a fan of this ETF. She told Livewire:

I really like ETF Securities High Yield Low Volatility ETF. Essentially, I really like their methodology. They look at the top 75 high-quality businesses and they only take 10 high-yielding companies per sector, and they remove the 25 most volatile. It’s got names like Kraft, IBM, and Verizon and also pays a quality distribution. And I think everyone’s looking for defensive yield at the moment.

VanEck Vectors MSCI World ex Australia Quality ETF (ASX: QUAL)

Another ETF for investors to look at is the VanEck Vectors MSCI World ex Australia Quality ETF. It provides investors with access to a portfolio of high quality shares outside Australia.

To be included in the ETF these companies need to pass certain criteria such as having low leverage, high growth rates, and high returns on equity. Companies that have made it into the fund include Apple, Microsoft, Nike, and Nvidia.

Apt Wealth’s Sarah Gonzales is very positive on the ETF and named it as her top pick right now. She told Livewire:

My preferred ETF is the VanEck MSCI International Quality ETF. I think it provides exposure to that quality factor, which tends to outperform in market downturns. It does focus on factors like return and equity, year-on-year growth of earnings and also levels of debt. These are proxies for profitability, earnings variability, and the level of debt of companies. Particularly if we are going into a recession,  I think these are really the factors that I think we should focus on.

The post Here are 2 buy-rated ASX ETFs for casting a wider net during uncertainty appeared first on The Motley Fool Australia.

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More reading

• Here are 2 high quality ETFs analysts rate as buys
• Are these 2 high quality ETFs in the buy zone this month?

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

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

During the peak pandemic years, e-commerce stocks could do no wrong. Now, they are entirely out of favor with the market. However, does this weakness present a buying opportunity?

Some of the top e-commerce stocks on my checklist are Amazon (NASDAQ: AMZN), MercadoLibre (NASDAQ: MELI), Shopify (NYSE: SHOP), and Etsy (NASDAQ: ETSY). Each is down significantly from their record highs. While all might be solid companies, are their stocks a buy? Let’s find out.

The businesses

Each company operates in its own market niche:

• Amazon is the world’s largest e-retailer and sells practically anything you could ever want. It also has a growing cloud computing business that diversifies the company.
• MercadoLibre is focused on Latin America and has an e-commerce platform, digital payments business, shipping logistics division, and consumer credit arm.
• Shopify isn’t a direct e-commerce play, but it provides the software necessary for businesses to launch their e-commerce store.
• Etsy’s site offers products that are often customizable and typically sold by individuals with a relatively small operation.   

All four companies saw massive sales growth during the pandemic, but only one has maintained its growth rate through 2022.

AMZN Revenue (Quarterly YoY Growth) data by YCharts

When the other businesses’ sales growth fell dramatically, MercadoLibre’s stayed steady at 63%. This was primarily due to 113% year-over-year (YOY) growth of its fintech revenue during the first quarter. However, its commerce revenue still grew a respectable 44% (which was higher than any of the other companies).

Both Amazon and Etsy had abysmal first quarters, and it won’t get better for Etsy. Management projects Q2 sales to rise 7% at the midpoint, a metric that a weakening consumer could impact. Most of Etsy’s goods are discretionary and nonessential during tough times. But this sentiment may be baked into the stock, which trades for 20 times free cash flow.

Amazon was propped up by its Amazon Web Services (AWS) cloud computing division in the first quarter as its sales rose 37% over the year-ago period. However, North American commerce sales only rose 8%, while international sales fell 6%. Additionally, Amazon’s free cash flow slid further into negative territory, with Amazon burning an astounding $29 billion during the quarter.

Etsy and Amazon both had horrendous quarters, and besides AWS, there doesn’t seem to be a light at the end of the tunnel. But what about Shopify?

Those who may not have checked on Shopify’s stock lately may be wondering, “Why is this stock priced so low?”

As of June 28, Shopify split its stock 10-for-1, which means each share is now worth a tenth of what it used to, but investors who held the stock received nine additional shares to make up for the split.

As for the business, Shopify’s sales grew a steady 22%. This rise was driven by a 29% increase in its merchant solutions segment, which takes a cut of each item sold through Shopify’s platform. Because Shopify merchants have to pay a monthly fee to use its software, the company should be able to maintain a solid chunk of its business regardless of how the consumer is doing. However, it could see a material slowdown due to the weakening consumer because its merchant solutions made up 72% of Q1 revenue. 

Business outlook

Looking forward, it’s hard to get excited about Etsy’s growth prospects. It operates in a niche that thrives when the consumer is flush with cash — something we are not experiencing currently. Amazon’s only bright spot is AWS, which has massive tailwinds behind it. As for the e-commerce business, it’s almost too big to grow rapidly anymore.

Shopify has a long way to go before fully deploying its vision for a complete e-commerce solution, but many stores have already taken the leap from brick-and-mortar to online with Shopify. Now, Shopify’s growth will be driven by the growth of its clients, which could still be significant.

MercadoLibre has by far the best outlook. With its fintech divisions, there seems to be no sign of slowing down. Additionally, only about 4.9% of total retail sales occur online in Latin America versus 16.1% in the U.S. Latin America is home to more than 650 million people, giving MercadoLibre a vast growth runway.

Stock valuations

Comparing each stock directly from a price-to-sales ratio standpoint is dangerous as each has a different margin profile. However, examining where the stocks have traded historically can give investors insight into how cheap they are.

AMZN PS Ratio data by YCharts

From this chart, Amazon is returning to valuation levels last seen in 2016. On the flip side, MercadoLibre is valued the same as it was at the depths of the Great Recession. MercadoLibre isn’t nearly as in trouble as it was in 2009 when the financial system was on the brink of collapsing. However, that is how the market values it. 

Both Shopify and Etsy are much younger, so investors don’t have as much of a historical record on which to base their analysis.

SHOP PS Ratio data by YCharts

These two are returning to lows reached in 2016. However, growth prospects were greater back then because e-commerce wasn’t as developed. Now that the largest e-commerce catalyst that will likely ever occur has subsided, the future growth story isn’t as bright for Shopify or Etsy, leading to a lower valuation.

It’s hard to ignore how superior MercadoLibre appears to be as an investment. It’s growing the fastest, has a sizable market available, and is valued cheaply. That’s not to say it is risk-free since operating in Latin America can be tumultuous with governments and economies.

However, with its wide footprint, it should be able to weather almost any storm it experiences. So of the four, MercadoLibre is my top e-commerce stock to buy, and it really isn’t close.

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

The post Which e-commerce company is the best buy during this bear market? appeared first on The Motley Fool Australia.

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More reading

• 1 green flag for Amazon stock
• Why Amazon shares fell 12% in June
• Why Amazon stock rose while the market slept on Wednesday
• Why are ASX tech shares struggling today?
• 2 monster Warren Buffett stock-split stocks to buy right now

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Etsy, MercadoLibre, and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Etsy, MercadoLibre, and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Chalice Mining Ltd (ASX: CHN) share price was a strong performer on Thursday.

The mineral exploration company’s shares stormed almost 7% higher to end the day at $4.00.

The catalyst for this was the release of positive drilling results from the Dampier target.

Can the Chalice Mining share price keep rising?

The good news for investors is that one leading broker believes the Chalice Mining share price can keep rising… and rising.

According to a note out of Bell Potter, its analysts have retained their speculative buy rating and $11.10 price target on the company’s shares.

Based on the current Chalice Mining share price, this implies potential upside of 178% over the next 12 months.

What did the broker say?

Bell Potter was very pleased with the drilling results from the Dampier target. It highlights that these results are similar to the enormous Gonneville deposit and paint a very positive picture of its Julimar project. The broker said:

These results are a very exciting development for CHN and are the strongest indication yet of further mineralisation at Julimar and for potential repeats of the Gonneville deposit. The mineralisation style is almost identical to Gonneville and the drilling has provided additional information that has enabled CHN to prioritise multiple targets.

The step-out (~10km) from the Gonneville deposit and the continuity of ~350m strike and over ~250m dip for the initial three holes is highly encouraging for the prospectivity of the entire Julimar Complex.

All in all, the broker believes this update as a big positive and continues to see significant value in its shares. Bell Potter concludes:

With this latest update, we see the likelihood of further positive catalysts emerging on exploration success. Our valuation remains unchanged at $11.10/sh and we retain our Speculative Buy recommendation.

The post Top broker says the Chalice Mining share price can rise almost 200% appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• Why Chalice Mining, Damstra, Link, and Pinnacle shares are storming higher
• ASX 200 midday update: Chalice Mining jumps, Zip sinks on bearish broker note
• Chalice Mining share price leaps 13% on new exploration results

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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It’s extremely rare to see the analyst community unanimously favour a particular stock.

Much like the retail investor population, each professional also has their own style, taste and strategy. So what looks attractive to one analyst may not fit the criteria for another.

But if there’s anything close to a unanimously loved ASX share right now, it’s CSL Limited (ASX: CSL).

According to CMC Markets, 12 out of 13 analysts currently rate the biotechnology stock as a buy. 

Ten of those 12 go as far as recommending it as a strong buy.

Fallen star could represent a bargain

Over the 2022 financial year, the CSL share price lost 5.5%. It’s still a long way from its pre-COVID high.

Perhaps this represents great value to the analysts, who have seen CSL make many people wealthy over the long term.

The share price closed Thursday at $287.

According to The Motley Fool’s James Mickelboro, the team at Citi reckons there’s massive upside, slapping on a price target of $330.

“US CMS data indicates continued price increases in immunoglobulin products. This is consistent with our expectation, as donor fees continue to remain elevated,” Citi’s notes read.

“With plasma collections now back to pre-pandemic levels, we expect the market to shift its focus to the strong underlying plasma product demand.”

Reporting season could surprise

The biggest influence on the CSL share price over the last financial year, aside from the ongoing COVID-19 pandemic, was the acquisition of European pharmaceutical company Vifor Pharma towards the end of last year.

At the time experts were divided over whether the deal was a positive one for CSL.

But now that the dust has settled, there doesn’t seem to be as much angst about the $17.2 billion takeover.

With August reporting season coming up, Switzer Financial Group director Paul Rickard this week noted that healthcare companies like CSL tend to have a track record of “surprising on the upside”.

“The lower Australian dollar is helping as well,” he told Switzer TV Investing.

The post Why analysts love this ASX share that lost investors 5.5% in FY22 appeared first on The Motley Fool Australia.

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More reading

• 4 ‘quality’ ASX shares to buy in scary times: expert
• Analysts name 2 ASX 200 blue chip shares to buy
• Here’s how ASX healthcare shares performed in FY22
• Beating the benchmark: Why this broker is betting on the CSL share price for outperformance
• Here’s what happened to the CSL share price in June

Motley Fool contributor Tony Yoo has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. 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 Pro Medicus Limited (ASX: PME) share price will be on watch on Friday.

This follows the release of a positive broker note out of Goldman Sachs this morning.

What is Goldman Sachs saying about Pro Medicus’ shares?

According to the note, the broker has taken its sell rating off the health imaging technology company’s shares.

Goldman has upgraded Pro Medicus to a neutral rating with an improved price target of $42.60.

And while this is still lower than the current Pro Medicus share price of $45.19, the broker spoke very positively about the company’s outlook and artificial intelligence (AI) opportunity.

What did the broker say?

Goldman Sachs highlights that over the last decade there has been a lot written about the various benefits and applications of AI in radiology. At long last, the broker believes that the technology is finally approaching a tipping point in adoption.

This could be good news for Pro Medicus, as Goldman Sachs believes it is the company that could benefit most from this technology. And while it acknowledges that it is still early days, the broker sees a big opportunity for the company.

Goldman explained:

Although still early days, we believe PME is better positioned than most to commercialise AI, as integration with its established Visage 7 Viewer provides a strong differentiation to the competition. However, competition is likely to be intense, with multiple players vying for platform share, and hence any sustained success is very far from assured.

Whilst revenue contribution is still subject to various uncertainties, PME is now generating revenue from its breast density AI algorithm, and hence we feel it is now necessary to at least attempt to recognise what could be a meaningful growth driver through the mid/long-term. Based on our current assumptions, AI could be +3-9% accretive to our revenue forecasts in FY24-26E.

The post Why Goldman Sachs just upgraded Pro Medicus shares appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• What on earth happened to ASX 200 tech shares in June?
• The Pro Medicus share price is down 30% in 2022. Is it a buy?
• Here are the top 10 ASX shares today

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 Pro Medicus Ltd. The Motley Fool Australia has positions in and has recommended Pro Medicus Ltd. 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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Investing in ASX shares in 2022 has not been for the faint-hearted.

Inflation and interest rate worries have paralysed the market for the whole year, while Russia’s war in Ukraine and surging energy prices have just poured petrol on the volatility fire.

Now, as Australians and Americans face higher mortgage repayments, there are fears that economies will fall into recession — and that it’s a sacrifice central banks are willing to accept to stop high inflation becoming entrenched.

Scary times.

In such turbulence Switzer Financial Group director Paul Rickard suggests that buying into the “safer” reliable companies might be an idea.

“[Buying] the stock that was $10 and is now 50 cents, hoping that’s going to rebound, that’s a high-risk strategy for me,” he told Switzer TV Investing.

“I’d rather stick to a couple of quality companies. And there are a couple out there that I think are showing reasonable rounding-type behaviour and are trading okay.”

The company to boom when the economy recovers

Rickard’s first pick is investment bank Macquarie Group Ltd (ASX: MQG).

He noted the stock has come up about 7% off its low in mid-June, which is impressive resilience considering the rest of the ASX has plunged in that time.

“The other reason why I like Macquarie is you know it’s got a great underlying business. You know that there are some pretty smart operators in Macquarie.”

According to Rickard, the firm has a “good mix” of market-exposed investments and its fast-growing retail banking business.

Like most investment banks, Macquarie does have some downside if the economy plunges into a recession or even a severe slowdown.

But beyond that there is plenty of upside.

“If the economy recovers and activity picks up… I’d say Macquarie’s a big beneficiary.”

A reliable trio from a growing sector

Healthcare is a sector that Rickard favours at the moment.

He noted that in the US healthcare is often seen as a defensive sector, while Australia’s product-focused companies give the industry a growth flavour.

And certainly with the current market sentiment so hostile towards technology, Rickard feels like growth shares in health could benefit.

“Companies like CSL Limited (ASX: CSL), Resmed CDI (ASX: RMD) and Cochlear Limited (ASX: COH)… I think there’s good value there,” he said.

“Again, they’re all stocks that aren’t going down and, if anything, companies like Resmed and Cochlear have been creeping up, as has CSL.”

With reporting season coming up next month, Rickard said that these companies have a history of “surprising on the upside”.

“The lower Australian dollar is helping as well.”

The post 4 ‘quality’ ASX shares to buy in scary times: expert appeared first on The Motley Fool Australia.

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More reading

• I’m sticking by this ‘quality’ ASX share that’s fallen 20%: expert
• Analysts name 2 ASX 200 blue chip shares to buy
• Here’s how ASX healthcare shares performed in FY22
• Why Macquarie shares could be a ‘quality cyclical at a discounted price’: expert
• Why are ASX 200 bank shares responding positively to higher interest rates?

Motley Fool contributor Tony Yoo has positions in CSL Ltd., Cochlear Ltd., Macquarie Group Limited, and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd., Cochlear Ltd., and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended Cochlear Ltd. and Macquarie Group 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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Are you wanting to add some ASX growth shares to your portfolio in July? If you are, you may want to look at the ones listed below.

Here’s what you need to know about these growth shares:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX growth share to look at is Aristocrat Leisure. It is one of the world’s leading gaming technology companies with a portfolio of poker machines and a lucrative digital business. The latter is generating significant recurring revenues from highly popular games such as RAID. And while the company recently missed out on the major acquisition of real money gaming (RMG) company Playtech, management stated that this won’t stop it from entering the potentially lucrative RMG market.

Earlier this week the team at Citi put a buy rating and $41.00 price target on its shares.

Breville Group Ltd (ASX: BRG)

Another ASX growth share that could be a top option for growth investors is Breville. It is the leading appliance manufacturer behind the Baratza, Kambrook, Lelit, Sage, and Breville brands. Thanks to a combination of acquisitions, geographic expansion, and its investment in research and development, Breville has been growing at a solid rate for many years. Pleasingly, the company has been tipped to continue its growth in the years to come by a number of brokers.

Morgans is one of those brokers and has an add rating and $32.00 price target on its shares.

Lovisa Holdings Limited (ASX: LOV)

A final ASX growth share that could be in the buy zone this month is Lovisa. It is a fast-fashion jewellery retailer with a store network that is growing rapidly. It could be a top long term option due to its global expansion plans, new and ambitious leadership team, and the popularity of its offering.

Analysts at Morgans are very bullish and believe “now is the time LOV steps up to become a global force.” Its analysts have an add rating and $24.00 price target on its shares.

The post Here are 3 excellent ASX growth shares for investors to buy in July appeared first on The Motley Fool Australia.

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More reading

• Could there be another 19% upside to the Aristocrat Leisure share price?
• Analysts name 2 ASX growth shares to buy this week
• Here are the top 10 ASX shares today
• Why APM, Block, Breville, and Superloop shares are charging higher
• ASX 200 midday update: Suncorp’s update, Magellan sinks

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 Lovisa Holdings Ltd. 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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Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part three of this edition, we’re rejoined by Yarra Capital Management’s fixed income specialists, Darren Langer, co-head of Australian fixed income, and Chris Rands, co-portfolio manager of the Yarra Australian Bond Fund. Today they discuss the threats and opportunities for bond investors in the year ahead.

The Motley Fool: We previously covered what a tough year it’s been in the bond markets amid the aggressive interest rate hike signals from the US Fed and the RBA. Do you have any investment regrets over the past year?

Chris Rands: The biggest regret I have is that we bought the rising rates too early. If you think about that spread to cash I mentioned earlier, we didn’t think the market would be pricing in a 4% cash rate by the end of this year. That seemed way too high for us. Once the market was pricing in a cash rate of 3%, we thought that was a good time to buy, and it turned out that was too early because the market doesn’t think 3% is high enough anymore.

I still think the market is overpriced and that it’s going to eventually come back.

Darren Langer: We’re quite cynical about how central banks operate. Early on in the pandemic, we were talking about the fact that we don’t trust central banks to tell you what they’re really going to do. They tell you what they want you to hear. We thought they’d take a much slower path out of this. The sensible route is to go slower and not crush your economy on the way.

MF: So why are we seeing this hawkish tightening from the Fed and RBA?

DL: That last hit to energy prices with the Ukraine crisis has panicked central banks. And I think we underestimated just how much they would revert back to the 1990s thinking of having to kill inflation really quickly rather than looking at the underlying nature of what’s going on.

Perhaps we weren’t cynical enough and should have gone with our gut feeling that central banks would overreact to the situation rather than take a more nuanced view.

MF: Despite the difficult environment, what were some of your winning investment decisions?

CR: Coming into this year we didn’t have much of a credit position. When spreads got really tight last year, we took the opportunity to sell the majority of our credit. What’s been happening this year, as rates have sold off and central banks began to take excess liquidity out of the market, credit spreads have actually been widening. Corporate bonds have been having a relatively tough time.

So, we did well timing that credit spread. Hopefully, the next leg of this positive trade will be buying the attractive spread back at some stage.

MF: Has Russia’s invasion of Ukraine changed your investment approach?

CR: It doesn’t change any of our investment processes, but it does change how we think about inflation and those types of things. The way this turns up in investment strategies is [to] assess what impact we believe this conflict will have on inflation and, therefore, causes the RBA’s reaction.

If we have a prolonged conflict, what does that do to oil prices and where does that put inflation? And, alternatively, if the conflict were to end, where does that put oil and what does that mean for the RBA’s response?

This isn’t something we’ve had to really worry about for the past 10 or so years. There are always minor geopolitical conflicts popping up, but not one of this magnitude and with such a large flow-on effect via the energy markets.

DL: One thing that’s surprised us a little is we would have thought, in a world where there is conflict, Australia is a relatively safe haven for investors. We have a relatively stable economy and we’re a long way from everybody else geographically.

But what we’ve actually seen is that Australian bonds as a spread to US bonds have been widening over the last six to 12 months. So, we’ve actually underperformed the US, in particular. That’s been a surprise because we expect our rates to be a little lower than the US. We have a highly rated market relative to other countries. But there hasn’t been the same demand for Australian bonds from international investors that we might have expected.

It doesn’t affect us directly, because we only invest in the domestic market.

MF: What’s the biggest threat for fixed-income investors in the year ahead?

CR: That the central banks continue on this hawkish path and march rates up to what the market is currently forecasting. If the RBA is able to get the cash rate to 4% over the next six to nine months, I don’t think that’s going to be a very good environment for other risk assets. And that’s when you’ll start to question whether the corporates can handle the slowdown in growth that’s coming.

DL: If you think about the main risks in fixed income, higher interest rates are one, and credit risk is the other main one. For people investing in fixed-rate funds, higher rates are going to cause problems to returns.

There are floating rate funds in the market, but a lot of the floating rate funds also take credit risk. So if we keep pushing rates higher, the chances of recession become higher and that becomes a risk on the credit side.

MF: And what’s the biggest opportunity in the fixed income space?

CR: I think the biggest opportunity is that central banks pull up earlier than the market expects. If the RBA were to stop at 2% to 2.5%, then fixed rates are too high. So there’d be a relief rally simply because you don’t get to the levels that the market is forecasting relative to what the RBA actually does.

So the biggest opportunity is that we get a small slowdown in growth that causes central banks to re-evaluate what they’re doing and pause the hikes. If it’s a fast slowdown in growth, then it’s a ‘who knows what’s going to happen’ environment again.

DL: If we end up with a lower rate profile, fixed-rate funds will do quite well from their interest rate exposure. But also the credit spreads have widened quite a bit, so there have been lots of opportunities to invest in good quality corporates at reasonable spreads.

If we end up having a soft landing, the corporate market should do quite well.

**

If you missed the earlier installations of our interview with Yarra Capital’s Darren Langer and Chris Rands, you can find part one here and part two here.

(You can find out more about the Yarra Australian Bond Fund here.)

The post The biggest risk and top opportunity for fixed income investors in 2022 revealed: fund managers 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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Looking for dividend shares to buy this month? Then the two listed below that have been given buy ratings could be worth considering.

Here’s what you need to know about these ASX 200 dividend shares:

Australia and New Zealand Banking Group (ASX: ANZ)

The first ASX 200 dividend share to look at is ANZ. It is of course one of Australia’s big four banks.

ANZ could be a top option for income investors that don’t already have exposure to the banking sector. Particularly given its solid performance so far in FY 2022 and recent share price weakness.

In respect to the former, during the first half, ANZ reported cash earnings from continuing operations of $3,113 million. This was a 4% increase over the prior corresponding period.

As for the former, the ANZ share price has lost 19% of its value since the start of the year. This means that the potential yields on offer with its shares have now widened materially. For example, Citi is forecasting fully franked dividends per share of 147 cents in FY 2022 and then 170 cents in FY 2023.

Based on the current ANZ share price of $22.80, this implies yields of 6.45% and 7.45%, respectively.

Citi also sees plenty of value in its shares and has put a buy rating and $30.75 price target on them.

Harvey Norman Holdings Limited (ASX: HVN)

Another ASX 200 dividend share to consider is retail giant Harvey Norman. It could be in the buy zone according to analysts at Goldman Sachs.

The broker remains positive on the retailer despite the tough operating environment. It prefers Harvey Norman due to its valuation and it having “more protection from online competition given higher regional and boomer exposure.”

Goldman Sachs is forecasting fully franked dividends per share of 42 cents in FY 2022 and 39 cents in FY 2023. Based on the current Harvey Norman share price of $3.89, this will mean yields of 10.8% and 10%, respectively.

The broker has a buy rating and $5.80 price target on its shares.

The post Here are 2 ASX 200 dividend shares analysts rate as buys appeared first on The Motley Fool Australia.

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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 Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. 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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One ASX stock is selling at a discount right now, even though it represents a quality business poised for “superior earnings growth” in the medium term.

That’s the view of Wilsons head of investment strategy David Cassidy, who said Macquarie Group Ltd (ASX: MQG) is a “quality cyclical”. 

“Quality cyclicals do not have the same persistent growth characteristics as pure structural growth stocks,” he said in a Wilsons memo.

“However, quality cyclicals usually have a structural growth story embedded within the company.”

Immediate growth might be hampered for Macquarie as the economy slows down, but in the longer term “the structural growth drivers should outweigh the cyclicality”.

How did Macquarie perform in the 2022 financial year?

In a period that’s seen plenty of bruising among ASX shares, Macquarie fared respectably, gaining 5% for the 2022 financial year.

At its peak in November 2021, it even became one of the big four banks.

This is all while giving out a handy dividend yield of 3.66%.

While it has made its name over the decades as an investment bank, its small retail arm is fast gaining traction in the competitive Australian market.

Its home loan book has been growing rapidly over the last three years. 

“We have been impressed by the growth rate of Macquarie’s lending business,” said Cassidy.

“If it continues to grow at its current pace, it is very possible that the banking segment could capture over 10% of Australia’s household lending by the end of the decade.”

To grow the deposit side of the retail market, last month Macquarie even started offering transaction accounts that pay out a no-questions-asked 1.5% per annum interest rate.

This year’s plunge just makes it a bargain

Like many ASX shares, Macquarie investors have been forced to take a haircut in 2022.

For the year-to-date, the stock price is down almost 20%.

But Cassidy reckons that this merely presents a “good opportunity to buy a quality cyclical at a reasonable price”.

The bank’s early investment in industries that drive decarbonisation gives it excellent upside, he feels.

“Macquarie and Brookfield… have the first mover advantage in green energy,” said Cassidy.

“Macquarie is well-positioned to take advantage of this opportunity and is one of the few ASX stocks exposed to this macrotrend.”

And despite the share price doubling over the past five years, this year’s sell-off now has the stock on undemanding ratios.

“Macquarie currently trades on a PE multiple of 15x (1-year forward earnings) — lower than it has been trading on post 2020 and close to its 5-year historical average,” said Cassidy.

“We think this valuation looks reasonable due to the strong long-term earnings growth potential for Macquarie and unique leverage to the energy transition.”

The post I’m sticking by this ‘quality’ ASX share that’s fallen 20%: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has positions in Macquarie Group Limited. 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 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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