When it comes to the ASX boards, there are dozens and dozens of exchange-traded funds (ETFs) to choose from. Back in the day, ETFs used to come in a ‘you can have any ETF you want, as long as it’s an index fund’ mould. But today, if you can think of a sector, country, trend or commodity, chances are there’s an ETF for it. But what about ASX dividend ETFs?

Yes, there are indeed a number of ETFs on the ASX that specifically focus on providing dividend income. So let’s dig into a few of them, and see which one is offering the biggest yield right now.

Vanguard and iShares offer up ASX dividend income ETFs

First up is the Vanguard Australian Shares High Yield ETF (ASX: VHY), the ASX’s largest dividend-focused ETF. VHY currently invests in 62 ASX dividend shares, the most heavily weighted of which are Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES), BHP Group Ltd (ASX: BHP), National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

VHY charges a management fee of 1.25% per annum and has returned an average of 7.88% per annum over the past five years. Its trailing dividend distribution yield is currently sitting at 5.02%.

Next, we have the iShares S&P/ASX Dividend Opportunities ETF (ASX: IHD). This is another popular dividend ETF from BlackRock. This ETF has 48 holdings, the most heavily weighted of which are Woolworths Group Ltd (ASX: WOW), Wesfarmers, BHP, Coles Group Ltd (ASX: COL) and Fortescue Metals Group Limited (ASX: FMG).

IHD charges a management fee of 0.3% per annum and has returned an average of 5.97% per annum over the past five years. Its trailing dividend distribution yield is presently at 5.36%.

What about SPDR and VanEck?

Up next is the SPDR MSCI Australia Select High Dividend Yield Fund (ASX: SYI). This is a more concentrated fund than the two above, holding 32 ASX shares at the latest update. The largest of these are Fortescue Metals, BHP, Rio Tinto Limited (ASX: RIO), Wesfarmers and Mineral Resources Limited (ASX: MIN).

SYI charges a management fee of 0.35% per annum and has returned an average of 6.6% per annum over the past five years. Its trailing dividend distribution yield is currently sitting at 7.78%.

Finally, we have the VanEck Morningstar Australian Moat Income ETF (ASX: DVDY). DVDY is our most concentrated income fund we’re checking out today, with just 25 holdings at the latest data. Its top holdings are Wesfarmers, Woolworths, ASX Ltd (ASX: ASX), Transurban Group (ASX: TCL) and APA Group (ASX: APA).

DVDY charges a management fee of 0.35% per annum. This particular fund hasn’t been around as long as the ones above. Its inception date is September 2020. Since then, it has returned an annual average of 17.32% (remember, that isn’t a fair comparison to the funds above). Its trailing dividend distribution yield is currently sitting at 3.42%.

Foolish Takeaway

So as you can see, Vanguard’s VHY ETF has returned the most over the past five years to its investors, accounting for both capital growth and dividend income. It also offers the lowest fees on this list. However, the SPDR SYI ETF currently offers the largest income potential, going off of trailing yield.

So one of these funds might suit differing preferences to another, depending on individual investing goals. One thing is for sure though. If you’re after an ASX dividend income ETF, you are certainly spoilt for choice!

The post Which ASX dividend ETF offers the highest income yield right now? appeared first on The Motley Fool Australia.

More reading

• Grange Resources (ASX:GRR) share price soars 24% on supersized special dividend
• Why did the Xero (ASX:XRO) share price have such a lousy month in November?
• The Afterpay-Square takeover deal is worth $9bn less now
• 2 rapidly growing ASX e-commerce shares
• Home Consortium (ASX:HMC) share price struggles despite ‘transformational year’

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited and Vanguard Australian Shares High Yield Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended APA Group, COLESGROUP DEF SET, and Wesfarmers Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3lQUiRW

The Grange Resources Limited (ASX: GRR) share price is soaring on Friday after the iron ore pellet producer announced a supersized special dividend for shareholders.

At the time of writing, Grange Resources shares are swapping hands for 76 cents, up 24.59%.

Grange Resources rewards shareholders

The board’s decision to announce a special dividend has excited investors and prompted many to get in on the action today.

According to its release, Grange Resources will pay a special dividend of 10 cents per share to shareholders. This comes off the back of the company’s strong performance in 2021, thanks to record iron ore prices realised.

Previously, the board declared a final dividend of 2 cents in February and an interim dividend of 2 cents in August. However, after assessing the capital requirements of the company, the panel elected to reward Grange shareholders.

The special dividend marks a 150% increase on the 2021 calendar year dividend of 4 cents per share. It’s also worth noting that the dividend is fully-franked, which means that shareholders will receive tax credits.

ASX investors must be on the company’s register before the ex-dividend date of 15 December to receive the dividend. Shareholders will receive their payment on 29 December.

About the Grange Resources share price

Over the past 12 months, the Grange Resource share price has surged by 171%. Its year-to-date gains are about 153%.

The Grange Resources share price reached an all-time high of 91 cents in late July, followed by heavy falls in the months continuing. Since then, the share price has gradually recovered to where it is today.

Based on today’s price, Grange Resources commands a market capitalisation of $879.5 million. It has approximately 1.16 billion shares outstanding.

The post Grange Resources (ASX:GRR) share price soars 24% on supersized special dividend appeared first on The Motley Fool Australia.

More reading

• Why did the Xero (ASX:XRO) share price have such a lousy month in November?
• The Afterpay-Square takeover deal is worth $9bn less now
• 2 rapidly growing ASX e-commerce shares
• Home Consortium (ASX:HMC) share price struggles despite ‘transformational year’
• The Arafura Resources (ASX:ARU) share price has tumbled 22% in a month. What’s going on?

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3oDuc6I

It’s getting further and further away now, but cast your minds back to November, and you might remember that it wasn’t a great month for the ASX share market. The S&P/ASX 200 Index (ASX: XJO) ended up going backwards over the month that was, falling around 0.92% between the start of the month and the end. But how did the Xero Limited (ASX: XRO) share price do?

Xero arguably remains one of the hottest ASX 200 growth shares on the market. It has delighted investors with a return of close to 750% over the past 5 years alone. Since 2012, the return has been closer to 3,000%.

But Xero shares have been struggling more recently. This online accounting software company is ‘only’ up 0.08% over the past 12 months. And year to date in 2021 so far, the company is down around 6%. So how did November treat the Xero share price?

Well, Xero began November at a share price of $149.51. When the month wrapped up on 30 November, Xero closed at $144.84. Yes, that means Xero had a big loss for the month, down approximately 3.12%. As you can tell, that’s significantly worse than the broader ASX 200’s performance (more than triple its losses). So what happened for Xero?

Why did the Xero share price underperform the ASX 200 in November?

Well, Xero’s lacklustre performance over November could be blamed on the company’s first-half results that it posted back on 11 November. The company reported revenues of NZ$505.7 million, up 23% from the previous period. Total subscribers increased 23% to 3 million, while Xero’s gross margin also widened by 1.4% to 87.1%.
But as my Fool colleague Mitchell dug into at the time, it seemed to be the “shift in company earnings from a $34.5 million profit in 1H FY21 to a $5.9 million loss in 1H FY22 might have put investors offside”.

Another factor that might have been at play for Xero last month was ASX broker sentiment. During the month, the Fool covered two brokers who slapped ‘sell’ ratings or equivalent on Xero shares in the wake of its half-year results. On 15 November, we covered Macquarie’s ‘underperform’ rating and $130 share price target. Then on 16 November, we looked at UBS’s ‘sell’ rating and $88 share price target.

To be fair, not all brokers were bearing on Xero during the month. We also looked at Citi’s ‘buy’ rating on Xero, replete with its $160 share price target. But it was likely that the combination of its half-year results and these mixed opinions from brokers was largely responsible for Xero’s poor performance over November.

Today thus far, the Xero share price is aksing $139.72 a share at the time of writing, down 0.90% for the day. At this share price, Xero has a market capitalisation of $20.77 billion.

The post Why did the Xero (ASX:XRO) share price have such a lousy month in November? appeared first on The Motley Fool Australia.

More reading

• Are these 2 ASX tech shares good buys in December?
• How to snare a multi-bagger ASX share: expert
• 3 reasons why the Xero (ASX:XRO) share price could be a high-quality buy
• Why Afterpay, Liontown, Northern Star, and Xero shares are falling
• Are Xero shares worth their $21bn valuation? Motley Fool analyst Chris Copley weighs in

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3ICjNQr

It has been another disappointing day of trade for the Afterpay Ltd (ASX: APT) share price.

In afternoon trade, the payments company’s shares are down over 4% to $96.05.

Why is the Afterpay share price falling today?

Investors have been selling down the Afterpay share price today after another pullback in the Square share price overnight.

On Thursday night, Square saw its shares fall 4% during regular trade and then a further 0.5% in after hours trade to US$186.00.

As Square is in the process of acquiring Afterpay in an all-scrip deal, the value of the takeover rises and falls with the Square share price.

What does this mean the takeover deal?

In light of the above and with Afterpay shareholders voting on the takeover next week, I thought I would look to see what these latest declines mean for the proposed transaction.

In August, the two parties agreed an all-scrip deal which will see Afterpay shareholders receive a fixed exchange ratio of 0.375 shares of Square Class A common stock for each Afterpay share they hold.

At the time, the Square share price was trading at US$247.26, which implied a transaction price of approximately $126.21 per Afterpay share. This valued the deal at approximately US$29 billion or A$39 billion.

However, while this offer was an attractive 30.6% premium to the Afterpay share price at the time ($96.66), the weakness in the Square share price has since wiped out almost all of this premium.

So much so, the offer now represents a takeover price of just ~$97.50, which is less than one percent higher than where Afterpay’s shares were trading prior to the offer. It also values the transaction at approximately A$30 billion, wiping ~A$9 billion off the deal.

And perhaps adding further displeasure to shareholders is that fact that this implied transaction price is 39% lower than Afterpay’s 52-week high of $160.05.

This sets the scene for a very interesting vote at next week’s extraordinary general meeting.

The post The Afterpay-Square takeover deal is worth $9bn less now appeared first on The Motley Fool Australia.

More reading

• Could this ASX share really be the next Afterpay (ASX:APT)?
• ASX 200 (ASX:XJO) midday update: Fortescue CEO steps down, Westpac buyback update
• More pain for ASX buy now, pay later shares in 2022: expert
• How to snare a multi-bagger ASX share: expert
• Here’s why ASX BNPL shares are in the spotlight 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. owns and has recommended AFTERPAY T FPO. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3EGTlTu

There are some e-commerce ASX shares that are increasing in size really quickly.

The e-commerce sector has really taken off after the onset of the COVID-19 pandemic as consumer behaviours changed.

Some businesses are taking advantage of the tailwinds and are reporting high levels of revenue growth as they increase their capabilities and plan for growing operating leverage.

Cettire Ltd (ASX: CTT)

Cettire is a luxury online retailer which sells many tens of thousands of products from lots of different luxury brands.

The convenience of its offering and free returns is resonating with customers. FY21 was a huge year for the business, with sales revenue increasing by 304% year on year to $92.4 million and active customers jumping 285% to 114,800.

It’s a global business. More than 90% of its revenue was international in FY21. It achieved a product margin of 37% on an average order value of $723.

That fast growth continued for the e-commerce ASX share in the first four months of FY22 for the period to 31 October 2021. Sales revenue (which is after returns) jumped 172% to $57.8 million. Active customers jumped 220% year on year to 158,260.

Cettire founder and CEO Dean Mintz said:

The focused investment to further enhance Cettire’s solid foundations is delivering results. Having invested in customer acquisition and executed strongly, October monthly traffic increased 379% year on year. In addition, we are seeing very positive early signs from the migration to our proprietary storefront, with sales growth in “migrated” markets outpacing the company.

Airtasker Ltd (ASX: ART)

Airtasker describes itself as Australia’s leading online marketplace for local services, connecting people and businesses who need work done with people who want to work. It wants to enable people to reach the full value of their skills, whilst providing truly flexible opportunities to work and earn income.

Despite all the impacts of lockdowns and difficulties, the company managed to achieve year on year revenue growth of 38% in FY21, which came with a gross profit margin of 93%. The FY22 first quarter – particularly impacted by lockdowns in Australia – still saw gross marketplace volume (GMV) growth of 6.2% year on year.

The e-commerce ASX share is still in the early stages of its international expansion, with first quarter international GMV up over 100% driven by “strong growth” in the UK. In the US it’s launching in the city markets of Dallas, Kansas City and Miami.

Not only are lockdowns seemingly over, but Airtasker said at its AGM that it is also seeing a strong positive movement in its average task value. Initially, Airtasker partially put this down to a labour shortage, but it’s also seeing more Aussies turning to the service for higher value tasks that are increasingly complex.

The company is focused on ensuring a positive first time customer experience, which is an important factor for growth according to management. It’s focused on improving this for growing engagement and revenue. Airtasker is also launching new products to drive further growth.

It’s currently rated as a buy by Morgans with a price target of $1.27.

The post 2 rapidly growing ASX e-commerce shares appeared first on The Motley Fool Australia.

More reading

• What’s with the Cettire (ASX:CTT) share price today, up 9%?
• 2 top ASX shares for December
• Morgans names 2 exciting ASX small cap shares to buy
• 2 high-growth ASX shares profiting from the e-commerce boom
• 2 ASX growth shares to buy this month: analysts

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. owns and has recommended Cettire Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has recommended Cettire Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/31HV50d

Shares in ASX-listed property and fund manager Home Consortium Ltd (ASX: HMC) are falling today and are currently trading at $7.51 apiece. Earlier, HomeCo shares were in the green and up nearly 0.8%. But, they have since retracted those gains, and are nearly 2% in the red.

Meanwhile, the broader market is also down today, with the S&P/ASX 200 Index (ASX: XJO) trading 0.45% lower.

HomeCo shares are in the red currently as investors respond to the company’s annual general meeting (AGM) where it provided an overview of FY21 operations and its outlook for FY22.

It’s been a busy period for the group of late, having listed two new real estate investment trust (REIT) vehicles on the ASX in recent months. Read on for more details.

What did HomeCo announce in its AGM?

In its AGM, HomeCo’s managing director and group CEO, David Di Pilla, gave an overview of the company’s FY21 operations and its outlook in FY22.

The release notes that FY21 was a “transformational year” for the company and that these growth trends have continued into FY22.

Most notably, HomeCo refers to the successful listing of HealthCo Healthcare and Wellness REIT in early September and the proposed merger of the HomeCo Daily Needs REIT and Aventus Group that was announced in mid-October.

Following these moves, the group’s total assets under management (AUM) will grow to approximately $5 billion compared with $900 million since listing in October 2019, per the release. That represents a 441% growth schedule in that time period. 

As such, HomeCo touts that it is now “well on the path towards our ambition to become Australia’s alternative asset manager of the future with scalable growth platforms across real estate and in the future private equity, infrastructure, and credit”.

Alongside this, the group delivered a 145% total return for shareholders to enjoy last year, making it the “best performing constituent in the S&P/ASX 300 A-REIT index” in FY21.

Following the proposed Aventus transaction, Home Consortium will manage around $5 billion of external AUM via two ASX-listed vehicles that will generate “high quality and recurring capital light management fees”.

HomeCo says the growth outlook for the merged group has an identified development pipeline of $450 million and is targeting at least a 7% return on invested capital (ROIC).

The company also recently announced $200 million of acquisitions in its HealthCo Healthcare and Wellness REIT, which will increase the portfolio to $850 million on an as-complete basis, per the release.

What’s the outlook for Home Consortium?

In its report, the company reaffirmed its FY22 guidance of pre-tax funds from operations (FFO) per security of 26 cents.

This figure represents an upward revision of 41% on previous guidance in August 2021 and 89% growth on top of FY21.

The company also announced its next major growth initiative in the AGM today, called HMC Capital Partners.

HomeCo believes there is a gap in the Australian market for a specialist alternative asset manager. It reckons the new initiative will give Aussie investors exposure to “carefully constructed portfolios of real assets” that are protected against the downside and uncorrelated to the equity market.

As such the company reckons HMC Capital Partners has the potential to further accelerate the growth and diversification of its alternative funds management platform.

The new venture will target three central investment themes, including high conviction strategic stakes in ASX-listed entities, private equity and structured credit.

It will target an internal rate of return (IRR) of 15% while providing a 3-5% income yield, HomeCo says.

In the past 12 months, the Home Consortium share price has climbed 94% after rallying another 88% this year to date.

The post Home Consortium (ASX:HMC) share price struggles despite ‘transformational year’ appeared first on The Motley Fool Australia.

More reading

• The lithium ASX share that’s still cheap: expert

The author has no positions 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3DGkF31

The Arafura Resources Limited (ASX: ARU) share price has been struggling over the past 30 days despite the company’s silence. Over that period, it has slipped from 24 cents to trade at just 19 cents today, representing a 22.08% drop.

So, what might be weighing on the rare earth elements producer’s stock lately? Let’s take a look at what the company has been up to lately.

What’s dragging on the Arafura share price?

Back in October, Arafura released its activities report for the first quarter of financial year 2022 detailing a 26% increase in the neodymium-praseodymium price.

The surge was spurred by global supply chain security risk, environmental legislation constraints, and strong demand for permanent magnets.

The last time the market heard non-price sensitive news from the ASX company was on 29 November when it released its annual sustainability report.

Within it, the company stated it is drawing up a plan to achieve its goal of reaching net-zero emissions by 2050. It also reiterated that it had signed on to the United Nations Global Compact in financial year 2021.

Arafura Resources’ chair, Mark Southey, commented on the company’s future plans:

2022 is going to be a year of delivery for Arafura. With ESG at the forefront of what we do since the beginning, we have great confidence in our strategy and our team to make a Final Investment Decision [on the Nolans Project] in [the second half of] 2022.

The Nolans Project houses neodymium-praseodymium in the Northern Territory.

However, the price of neodymium-praseodymium has flattened recently, which could be dragging on the Arafura share price.

According to the Shanghai Metals Market, the price of neodymium-praseodymium took off in late November. However, the latest price data as of 3 December showed the price had stagnated.

Interestingly, the Arafura share price didn’t seem to respond to the neodymium-praseodymium price’s upwards movement last month.

The company isn’t alone in its slump. The share price of Arafura’s fellow ASX rare earths developer, Australian Strategic Materials Holdings Ltd (ASX: ASM) has slipped by almost 16% over the past 30 days.

The post The Arafura Resources (ASX:ARU) share price has tumbled 22% in a month. What’s going on? appeared first on The Motley Fool Australia.

More reading

• What this EV forecast could mean for top ASX 200 resource shares
• Is the RBA about to join the digital currency revolution?
• Could this be a bigger threat to ASX shares in 2022 than COVID?
• Here’s why the Hazer (ASX:HZR) share price is plummeting 11% today
• Could this ASX share really be the next Afterpay (ASX:APT)?

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3EHH15D

The S&P/ASX 200 Index (ASX: XJO) has put in a strong year by historical standards.

Since the opening bell on 4 January, the ASX 200 has gained 10%.

But some leading ASX 200 resource shares have done a lot better.

Take Mineral Resources Ltd (ASX: MIN), for example. The Mineral Resources share price is up 23% in 2021. The miner also pays a 5.8% dividend yield, fully franked.

Oz Minerals Ltd (ASX: OZL) outperformed as well, gaining 39% year-to-date. Oz Minerals also pays a 0.9% dividend yield, fully franked.

Topping the list of our 3 ASX 200 resource shares for 2021 is Pilbara Minerals Ltd (ASX: PLS), up 185% for the calendar year. Pilbara doesn’t pay a dividend, but with that kind of share price growth you’re unlikely to hear shareholders complaining.

What are these miners focused on?

Both Pilbara and Mineral Resources have a strong focus on lithium. While Oz Minerals derives much of its revenue stream from copper.

Both of these metals have seen resurgent demand as the world moves to cut greenhouse gas emissions. Copper and lithium are core elements in most electric vehicle (EV) batteries.

With the growth outlook of the global EV market impacting on the growth outlooks of these ASX 200 resource companies, the Motley Fool asked Josh Gilbert, analyst at multi-asset investment platform eToro, whether EVs are really poised to take the place of traditional cars. Or are investors putting the cart well ahead of the horse?

ASX 200 copper and lithium producers hope to see EVs boom

“Most investors have a longer-term outlook, especially when it comes to EVs,” Gilbert told us. “They aren’t expecting every vehicle on the road tomorrow to be an EV. But they understand the transition and expect to see this trend play out over the next decade.”

He pointed to Norway as a nation leading the charge, with plans to go entirely EV by 2025.

While many of the biggest nations aren’t nearly so ambitious in their timelines to transition from combustion vehicles to EVs, Gilbert says, “We have seen car manufacturers take matters into their own hands, with GM pledging to sell only zero-emission vehicles by 2035 and Ford will only offer electric and hybrid vehicles in Europe from as early as 2026.”

Then there’s the early front runner in the EV game, and still going strong, Tesla Inc (NASDAQ: TSLA).

Gilbert told the Motley Fool:

To single out names, Tesla is already doing this on a global scale. Going back 5 years or so, most analysts said Tesla couldn’t deliver 500,000 vehicles this quickly, and now the company is delivering over 200,000 vehicles a quarter amid a global chip shortage and supply chain disruptions.

Not every EV name will be able to keep up with the demand, and this may see some quality drop in vehicles. However, I think that’s the same with the traditional car market. Manufacturers with good quality vehicles will stand out and continue to expand. We’ve already seen names such as Volkswagen, GM and Ford dedicate billions of dollars to this transition to EV to make sure they’re challenging Tesla for the crown.

Global ambition

Global EV adoption has plenty of room to grow. It’s currently around 2-3% of the vehicle market, but Gilbert said this “could climb to as much as 15-20% in the next 10 years”.

He notes that China already has around 20% adoption of EVs. Which, he said, “Is why we have seen many investors interested in stocks such as [Chinese EV manufacturer] Nio.”

“Nevertheless, we have to remember that there will likely be some headwinds,” Gilbert added. “The chip shortage is heavily impacting manufacturers. Although this is likely to ease in early 2022, it’s still a cause for concern for many EV manufacturers who rely on chips.”

Which brings us back to our ASX 200 resource shares.

According to Gilbert:

The biggest concern to watch would be a shortage of battery components such as lithium as demand increases. The lithium price has already climbed by around 400% in 2021, demonstrating the increasing cost pressures that EV manufacturers face.

Ultimately, demand could increase by another 40 times by 2030, which could see automakers pass these costs onto consumers. Most big names are working to guarantee supplies, but it’s clear that supply will remain tight and prices elevated.

Tight lithium supplies amid surging demand would certainly be good news for Pilbara and Mineral Resources.

As for ASX 200 copper share, Oz Minerals, the copper price is still trading near record highs.

12 months ago, a tonne of copper was worth US$7,750. Today that same tonne is fetching US$9,543, up some 23%.

The post What this EV forecast could mean for top ASX 200 resource shares appeared first on The Motley Fool Australia.

More reading

• Here’s why the OZ Minerals (ASX:OZL) share price hit a 13-year high today
• The Pilbara (ASX:PLS) share price pumped 5% higher today. What happened?
• Here’s why this top broker is tipping 20% upside for the Pilbara (ASX:PLS) share price
• These 3 ASX 200 shares are topping the volume charts on Monday
• These 3 ASX 200 shares are topping the volume charts this Friday

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/33ixKTJ

The Reserve Bank of Australia (RBA) governor, Philip Lowe has outlined what the future holds for the Australian currency, and it might be a digital token.

As digital wallets are replacing physical wallets and the use of cash is dwindling, Lowe flagged the possibility that token or account-based forms of currency might soon be favoured over cash. And the RBA might be readying itself to jump in on the action.

However, he is “sceptical” that cryptocurrency will disrupt the Aussie dollar.

So, what might the future of the Australian currency and monetary regulation look like? Here’s what Lowe thinks.

Will the RBA ditch cash for a digital token?

Lowe spoke to this year’s Australian Payments Network Summit on Thursday.

Lowe welcomed the support of regulators and government moves to control the payments sector.

He also flagged the increasing use of digital wallets. The governor said Australians are enthusiastically adopting digital wallets, so digital forms of currency might be the next big hit.

In fact, the RBA may start issuing and backing digital tokens in the future – just like it does with banknotes.

Lowe commented: “This would be a form of retail central bank digital currency (CBDC) – or an eAUD.”

“This could allow day-to-day payments to be made by moving tokens around rather than moving banknotes or value between bank accounts,” he said.

While there hasn’t been public pressure for a digital token, or an eAUD, to replace cash just yet, a case for the switch could evolve quickly. This is particularly because tokens might offer a lower-cost solution for certain payments.

Lowe said the RBA is looking into the technology needed to facilitate a shift to a token-based digital currency:

We are working through the relevant technical issues, as well as the broader policy implications of any shift away from a payments system based on the movement of value between bank accounts, to one that uses tokens. As part of this effort, we are planning to work with Australia’s new Digital Finance Cooperative Research Centre. We will also be working with the Treasury on these issues.

Will cryptocurrency be king?

Unfortunately for crypto bulls, Lowe doesn’t think crypto will ever be used for general payments in Australia.

Lowe said:

It is likely that the asset used for the settlement of most transactions in the economy will remain some form of secure fiat currency with a stable value, rather than cryptocurrency with a volatile price.

Though, there’s still a role for the likes of cryptocurrencies such as Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE). The currencies can help boost innovation, and Lowe notes there’s value in experimentation.

Could another body regulate an Australian token?

Lowe also said a digital token, or eAUD, could be issued and backed by another entity. That entity would be in charge of creating a ‘stablecoin’.

Though, stablecoins would need to be backed by “high-quality assets” and meet strong safety and security measures.

There might even be multiple stablecoins, with each being exchangeable for another.

The post Is the RBA about to join the digital currency revolution? appeared first on The Motley Fool Australia.

More reading

• Why the Bitcoin price declined over the last 24 hours
• Why Ethereum, Dogecoin, and Polkadot are heading lower today
• Survey reveals surprising crypto swing as Aussie housing bubble fears grow
• Why Cryptocurrency Mining Stocks Were Up Big Today
• Can Bitcoin and other cryptos be used as an inflation hedge?

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3GwlgGh

Experts are warning of more volatility for ASX shares as we head into the new year, but there’s a growing risk to the economy in 2022 that might be harder-hitting than COVID-19.

This risk stems from the severe shortage of a little-known chemical called AdBlue. It’s an additive used in diesel engines, and Australia could be just weeks from running out of the diesel exhaust fluid.

How AdBlue can hit ASX shares

The crisis is threatening our supply chains as just about all essential goods, such as food and medicine, are transported by diesel-burning trucks.

The problem is so serious that the Federal Government has set up a high-level emergency task force, reported the Australian Financial Review.

AdBlue is in short supply globally because Russia and China aren’t exporting as much high-grade urea.

Countdown to disaster

AdBlue is a mixture of organic compound urea and deionised water. It is essential to cut harmful emissions from diesel engines as it converts nitrogen oxides into nitrogen and water.

DGL Group Ltd (ASX: DGL) told the AFR that it had just six weeks of stock in its warehouse and was struggling to fulfil orders. DGL supplies 60% of the Australian market.

The supply crisis is exacerbated by panic buying from trucking companies. It’s much like the toilet paper fiasco that we witnessed at Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) at the onset of the pandemic.

ASX shares in the Adblue firing line

As Australia sources urea from other countries, such as the Middle East, Industry and Energy Minister Angus Taylor said that more shipments of the product would arrive soon. This could give the industry an extra two weeks of supply – as long as companies do not hoard the chemical.

A range of ASX shares may be impacted by a supply shortage, including supermarkets and retail shares such as the Australian Pharmaceutical Industries Ltd (ASX: API) and Wesfarmers Ltd (ASX: WES).

Petrol station companies such as Ampol Ltd (ASX: ALD) and Viva Energy Group Ltd (ASX: VEA) are also struggling with supply levels of AdBlue.

Hang on tight in 2022

The AdBlue crunch comes at a time when ASX investors appear to be getting more comfortable with the Omicron COVID mutation.

There are early promising signs that the more infectious variant isn’t as deadly as initially feared. It may even help end the pandemic by crowding out more severe versions of COVID.

But the AdBlue shortfall shows why we can’t grow complacent. Even if the COVID threat recedes, ASX shares still might have a wall of worry to scale in 2022.

The post Could this be a bigger threat to ASX shares in 2022 than COVID? appeared first on The Motley Fool Australia.

More reading

• Is the RBA about to join the digital currency revolution?
• Here’s why the Hazer (ASX:HZR) share price is plummeting 11% today
• Could this ASX share really be the next Afterpay (ASX:APT)?
• Apollo Tourism & Leisure (ASX:ATL) share price roars 23% higher. Here’s why
• ASX 200 (ASX:XJO) midday update: Fortescue CEO steps down, Westpac buyback update

Motley Fool contributor Brendon Lau 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 owns and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/33gXi3A