New Zealand has announced it will support Australia in its World Trade Organisation (WTO) dispute against tariffs placed on Australian barley by China.

The dispute follows Australia’s claims that China breached international trading rules last year when it placed an 80% import tariff on Australian barley. According to Australia, the tariffs were implemented as a response to Australia’s calls to investigate the origins of COVID-19.

Australia has since taken the dispute to the WTO, which agreed on Friday to form a panel to settle the claims. This is the first step towards settling a dispute with the WTO.

China claims it imposed the tariffs after Australia dumped barley in China. Dumping in international trade is when a nation exports a product for less than it costs in its home country. To dump product is defined as anti-competitive behaviour by the WTO.

Australia denies that it dumped barley in China.

New Zealand’s Trade Minister Damien O’Connor told local media the country would support Australia in its WTO panel dispute ahead of Prime Minister Scott Morrison’s arrival in New Zealand yesterday.

O’Conner was quoted by New Zealand’s Newshub as saying:

New Zealand upholds international rules and norms, so ensuring international trade rules are fairly applied by others is important to us and our exporters.

Australian’s Trade Minister Dan Tehan welcomed New Zealand’s support for the rules-based trading system, according to ABC News.

Australia has also accused China of imposing unfair import tariffs on Australian meat, lumber and lobsters. And market watchers will likely remember the effects said tariffs had on ASX-listed Treasury Wine Estates Ltd (ASX: TWE). Currently, only the tariffs on barley have been taken to the WTO.

Let’s take a look at the ASX share that could be one to watch through the row.

ASX-listed barley producer

Graincorp Ltd (ASX: GNC)

Graincorp is one of the few ASX-listed companies that deals with barley exports. Its exposure to the trade rift is somewhat limited as only a small amount of the company’s activities involve barley exports. However, its share price could be in the spotlight while Australia and China battle it out on the WTO stage.

Prior to the trade dispute between Australia and China, the company claimed to have very close ties with China. China’s grain demands are also vast, and still growing, making it an ideal market that Australian industry is currently missing out on. A settlement to the dispute could have ramifications for companies such as Graincorp.

Currently, the Graincorp share price has gained 27% since the barley tariffs were first imposed last year. It’s also 17% higher than it was at the start of 2021.

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• Can China really crash the iron ore price?
• ASX 200 rebounds, Treasury rises, Xero falls

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Are you looking to bolster your portfolio with some blue chip ASX shares in June?

If you are, then you might want to look at the ones listed below. Here’s why these ASX blue chip shares are highly rated:

Cochlear Limited (ASX: COH)

The first blue chip to look at is Cochlear. With populations around the world continuing to age, this leading manufacturer and distributor of cochlear implantable devices appears well-placed for growth over the next decade. Especially given its world class product portfolio and the industry’s high barriers to entry.

Macquarie is positive on the company and has an outperform rating and $245.00 price target on its shares.

Coles Group Ltd (ASX: COL)

Another blue chip share to consider is this supermarket giant. It could be a top option for investors due to its defensive qualities, strong market position, and solid growth prospects. Another positive is the return of rational competition in the supermarket industry. This puts Coles in a good position to continue its growth once it has cycled the elevated sales at the height of the pandemic.

Morgan Stanley is a fan of the company and currently has an overweight rating and $20.25 price target on its shares.

CSL Limited (ASX: CSL)

This biotherapeutics giant could be a blue chip to look closely at. While trading conditions have been tricky during the pandemic, CSL remains well-placed for long term growth thanks to the quality of its CSL Behring and Seqirus businesses. Both businesses have lucrative product portfolios and promising research and development pipelines.

One broker that is bullish on CSL is Macquarie. Its analysts recently retained their buy rating and $312.00 price target on its shares.

Telstra Corporation Ltd (ASX: TLS)

A final blue chip to consider is this telco giant. It could be a good option due to its improving outlook, attractive valuation, and generous yield. The former is being driven by the company’s successful T22 strategy and the easing NBN headwind.

Goldman Sachs is positive on the company and recently retained its buy rating and $4.00 price target on its shares.

More reading

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The latest news of US-based Acorns planning to go public through a SPAC merger has shone a light on its old Aussie friend, Raiz Invest Ltd (ASX: RZI). At the time of writing, the Raiz share price is trading slightly higher at $1.325, up 0.4%.

For the early investors and users of the micro-investing app, you would recall Raiz being known as Acorns. In January 2018, the Australian business ceased its joint venture with Acorns Grow Inc and rebranded to Raiz.

Raiz swiftly listed on the ASX five months later.

Now that Acorns plans to go public, we get to compare the two investing apps that stemmed from the same roots.

How the companies differ

Acorns and Raiz are similar in what they offer to customers – mobile-first micro-investing with a round-up feature which uses your spare change from purchases to invest.

Where the companies differ substantially is how they make money. Acorns derives majority of its revenue through a tiered subscription model, ranging from $1 to $5 per month.

Raiz uses a fee model tied to the account balance. In a way, this recurring monthly fee is like Acorns’ subscription model.

In theory, Raiz’s model should allow it to capture more revenue from its customer than Acorns as the account value grows to a monthly fee exceeding $5.

Another point of difference between Acorns and Raiz is size. Raiz was relegated to the Asia-Pacific region as part of an agreement with Acorns when their joint venture ended. A consequence is that Acorns holds a much larger market in the United States.

The by-product is Acorns boasts 4 million subscribers, while Raiz is hovering around 430,000 active customers. This user-base discrepancy translates to the companies’ funds under management (FUM) and revenue.

Acorns touted $4.74 billion in FUM at the end of April. Meanwhile, Raiz reported its FUM to be $737.56 million. Acorns’ revenue for the year ending 31 December 2020 came in at $71 million, while Raiz recorded $11.155 million.

How does ASX-listed Raiz compare?

The Raiz share price has remained mute today, finishing flat at $1.32. It seems the market was unfazed by the valuation attributed to Acorns.

Interestingly, while Acorns possesses a user base roughly 9.3 times larger than that of Raiz, and revenue that is approximately 6.4 times greater, the valuation doesn’t adhere to an equivalent ratio.

According to the slide deck, the SPAC merger with Pioneer Merger Corp has a pro forma equity valuation of US$2.151 billion. This is 25 times greater than the A$108.2 million market capitalisation of Raiz, based on its current share price.

There are many factors at play when it comes to a company’s valuation. This doesn’t necessarily mean the Raiz share price is trading at a discount. However, shareholders might find it interesting.

More reading

• Why the Raiz (ASX:RZI) share price is edging lower
• What’s happening with the Raiz Invest (ASX: RZI) share price?

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Are you looking to add a small cap share or two to your portfolio? If you are, then you might want to take a look at  the shares listed below.

These three shares have been growing at a solid rate and could have bright futures ahead of them. Here’s what you need to know about these exciting small cap shares:

Alcidion Group Ltd (ASX: ALC)

The first small cap share to watch is this informatics solutions company. Alcidion is a growing provider of software which has been designed to improve the efficacy and cost of delivering services to patients and reduce hospital-acquired complications. The company looks well-positioned for growth thanks to the shift to a paperless environment in the healthcare sector and other favourable industry tailwinds.

PlaySide Studios Limited (ASX: PLY)

Another small cap to watch is PlaySide Studios. It is a video game developer with a portfolio of 55 games across a range of categories. This includes self-published games based on its own original intellectual property and also games that have been developed in collaboration with Hollywood studios. Management estimates that PlaySide has a global market opportunity worth a total of $77.2 billion per annum. This gives it a very long runway for growth over the next decade and beyond.

Volpara Health Technologies Ltd (ASX: VHT)

A final small cap ASX share to watch closely is Volpara Health Technologies. It is a leading provider of software that uses artificial intelligence imaging algorithms to assist with the early detection of breast and lung cancer. Volpara has been growing its revenue at a quick rate for a number of years and this continued in FY 2021 despite the pandemic. Pleasingly, thanks to acquisitions and its growing product portfolio, the company appears well-positioned to continue this strong form in the years to come. Particularly given its ever-improving average revenue per user metric.

More reading

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• Volpara (ASX:VHT) share price pushes higher on FY 2021 results

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The A2 Milk Company Ltd (ASX: A2M) share price has fallen a dramatic amount over the last few months. Over the last six months it has dropped 60%. It has dropped almost 75% from the end of July 2020.

That’s despite interest rates being at record lows and there being a strong consumer environment for many ASX shares.

Just today, the business was hit with more bad news of a potential class action that is apparently being investigated by Slater & Gordon Limited (ASX: SGH). A2 Milk believes it has complied with all applicable disclosure obligations and denies any claim to the contrary.

But there are still some reasons that the A2 Milk share price could be interesting:

Lower price

It’s been a painful ride for existing shareholders. But for prospective investors, the current A2 Milk share price is almost the lowest it has been since 2017.

A lower price could mean a better long-term valuation to enter at.

If A2 Milk can turn its earnings around, as some analysts are expecting, then A2 Milk could prove to be good value.

The earnings forecast on Commsec suggests earnings per share (EPS) of 11.6 cents per share in FY21 and 26.8 cents of EPS in FY23.

If that medium-term outlook is correct (or close enough), then the A2 Milk share price is valued at 21x FY23’s estimated earnings, which could prove cheap if the business kept growing in FY24 and beyond.

Increased distribution in China

A large amount of A2 Milk’s products used to find their way into Chinese consumer hands.

Local infant formula sales have dropped off, particularly in the daigou channel.

However, not every side of its Chinese demand has disappeared.

It’s still seeing Chinese label infant nutrition growth. In the third quarter of FY21, it saw year on year growth of 5% compared to the third quarter of FY20. That was despite the prior period including a high level of COVID-related pantry stocking.

The store count of mother and baby stores in China has risen to 22,600 and the 12-month rolling market value share was stable at 2.4% at the end of March 2021, materially higher than where it was in prior years.

Plus, there are other markets outside of China that A2 Milk can grow into.

Continued growth of its liquid milk business

Liquid milk is not the biggest or most profitable part of the business, but it is steadily growing and now (after the infant formula decline) it’s a more important part of the overall picture.

In the FY21 half-year result it saw 16.3% revenue growth of liquid milk in Australia with a record value share of 11.7%.

Changes in the USA execution approach led to revenue growth of 22.3%, distribution increasing to 22,300 stores and an improvement in earnings before interest, tax, depreciation and amortisation (EBITDA).

In the most recent trading update, released on 10 May 2021, A2 Milk said the Australian liquid milk business continued to perform strongly and the USA business performed in line with the plan for the third quarter.

Foolish takeaway

However, whilst the company is confident about the long-term potential for A2 Milk infant formula, the problems are ongoing for infant nutrition and the A2 Milk share price. It has warned that its aggressive actions could potentially leak into the performance in the first quarter of FY22.

More reading

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• A2 Milk and EML were among the most traded ASX shares last week

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If you’re wanting to add some diversification to your portfolio, then you might want to look at exchange traded funds (ETFs). This is because ETFs give investors easy access to a large and diverse number of different shares through just a single investment.

With that in mind, listed below are two ETFs which are popular with investors. Here’s what you need to know about them:

iShares S&P 500 ETF (ASX: IVV)

The first ETF to look at is the iShares S&P 500 ETF managed by global giant BlackRock. It aims to provide investors with the performance of the illustrious S&P 500 Index, before fees and expenses. This index has been designed to measure the performance of large capitalisation US equities.

The fund manager notes that this ETF gives investors exposure to the top 500 U.S. stocks through a single investment. This can be used to diversify internationally and seek long-term growth opportunities for a portfolio.

Among the ETF’s largest holdings are Amazon, Apple, Berkshire Hathaway, Facebook, JP Morgan, Johnson & Johnson, Microsoft, and Tesla.

Over the last 10 years, the fund has generated an average return of 18.1% per annum.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF to look at is the VanEck Vectors Morningstar Wide Moat ETF. This fund gives investors exposure to a diversified portfolio of 49 attractively priced US companies with sustainable competitive advantages.

Historically, companies with moats have generated strong returns for investors. This is why Warren Buffett is such a big fan of investing in companies with this characteristic.

Among the ETF’s holdings are the likes of Amazon, American Express, Boeing, Coca-Cola, Microsoft, Pfizer, and Yum! Brands.

Over the last 10 years, the index it tracks has outperformed the ASX 200 index by some distance. During this time, it has generated an average total return of 20.2% per annum.

More reading

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Much has been made in recent months about the rising trend of ESG (environmental, social and corporate governance) ethical investing. Many investors are increasingly concerned about which companies their money ends up being invested in. Especially younger ones in the Millennial and Gen-Z demographics.

Some investors dislike the idea of investing in businesses that invest in fossil fuel extraction. Or else tobacco or alcohol production, mining, nuclear energy, gambling or other ethical concerns.

This trend has resulted in a number of exchange-traded funds (ETFs) popping up on the ASX, and receiving significant attention. These include funds like the BetaShares Global Sustainability Leaders ETF (ASX: ETHI). This fund currently has $1.43 billion in assets under management.

However, it’s not all rainbows and lollipops in this space it seems.

A report from the Australian Financial Review (AFR) today informs us that an ‘anti-ESG’ fund manager is looking to set up shop here in Australia. 2ndVote Advisers is an American asset manager and research firm. It is reportedly “set up to counteract political campaigns by activists and company management on environmental, social and governance issues (ESG)”.

The ASX draws an anti-ESG fundie

The firm has constructed a political scale to measure “the costs and extent of social activism” of companies. It rates them from 1 to 5. 1 being ‘very liberal’ and 5 being ‘very conservative’.

2ndVote boss Daniel Grant told the AFR that 73% of the US S&P 500 Index (INDEXSP: .INX) leans “too far left” on ESG issues and rates as a 1 or 2. Apparently, Mr Grant sees “a growing demand from investors for politically neutral, or even conservative, companies”.

Although 2ndVote Advisers rate companies on issues that are more controversial in the United States than here, such as the Second Amendment (gun laws) and abortion, Grant still reckons Australia is a fertile hunting ground. Here’s some of what he told the AFR:

Our aim is to pick the stocks that are neutral… There are a lot of investors who do not want their funds to be used for politically driven social justice agendas… We are very open to Australia. Many large company CEOs think they are running these companies for all stakeholders not just shareholders and that does not match the view of everyday Americans or Australians. That’s why we think Australians are interested.

He is particularly piqued with the fossil fuel industry here in Australia, believing that there is significant opposition to pushing ASX companies on the ESG issue of climate change. He told the AFR that, “given the attack on fossil fuels, our message may resonate with investors in Australia”.

It will remain to be seen whether Mr Grant is on to something. But as we discussed a fortnight ago, there is sure to be a large group of investors who might beg to differ.

More reading

• An ASX investor’s guide to ESG-focused ETFs
• ESG investing? Demand for ASX ethical ETFs is on the rise

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The Noxopharm Ltd (ASX: NOX) share price went gangbusters today after the company released a new report about its flagship drug, Veyonda. Shares in the biotech closed trade 22% higher at 74 cents a share.

Lets take a closer look at what propelled the Noxopharm share price higher.

Independent trial

Noxopharm shares shot up today on the news that a new independent trial supports the use of Veyonda as a new anti-cancer drug.

The LuPIN trial was in conjunction with Novartis AG (NYSE: NVS)’s Lu-PSMA experimental radiopharmaceutical drug. Novartis is a Swiss pharmaceutical giant with a market capitalisation of $218 billion.

Promisingly, the company advised that the combination of Veyonda and Lu-PSMA delivered a median overall survival outcome of 19.7 months, which inferred a 71% increase in survival outcome over an earlier study known as the WARMTH trial.

Also of note is that the study has helped Noxopharm validate that a higher dosage of the drug is well tolerated for a greater anti-cancer effect.

The LuPIN study will not formally conclude until October 2021 when the final data will be announced. As a result of the positive news announced today, the company also announced the possibility of a larger Phase 2 LuPIN study.

Management comments

Dr Graham Kelly, Noxopharm CEO and managing director, welcomed the news:

This result further supports the Company’s belief that Veyonda has the potential to become a standard of care drug to be used in combination with the most common forms of anti-cancer treatments.

He added:

Based on early data from our CEP-1 and DARRT-1 clinical studies, we believe that the unique multiple anti-cancer actions of Veyonda have the potential to produce meaningful survival benefits as a combination treatment across multiple treatment combinations. The striking difference in mOS outcomes between the LuPIN and WARMTH trialsserves to further support that belief.

About the Noxopharm share price

Noxopharm is an Australian clinical stage drug development company focused on the treatment of cancer.

The Noxopharm share price is up an impressive 250% over the last year. Far eclipsing the 24.7% return of the All Ordinaries Index (ASX: XAO).

More reading

• Here’s why the Noxopharm (ASX:NOX) share price is flying 16% today

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The Alliance Aviation Services Ltd (ASX: AQZ) share price is falling today following a reshuffle of the company’s debt facilities.

At the time of writing, the aviation services company’s shares are selling for $4.34, down 1.59%.

Alliance reorganises debt facilities

Investors are offloading Alliance shares after the company announced a change up in its existing debt facilities.

According to its release, Alliance advised it has successfully refinanced its current debt, and extended the due date. The new long-term fixed loans replace the former debt facilities that were due to expire in January 2022.

The new debt facilities, totalling $176 million, consist of the following:

• $71 million 3-year revolving bank loan facility
• $5 million working capital loan facility
• $25 million 4.5-year fixed rate institutional loan
• $25 million 7-year fixed rate institutional loan
• $50 million 10-year fixed rate institutional loan

The loans will be used to settle the balance of the Embraer E190 acquisition as well as funding maintenance checks.

Alliance noted that the weighted average interest rate for the above loans is between 2.7% and 2.9%. In addition, if the company decided to pursue other expansionary opportunities, the debt facilities provide more leeway.

The bank facility was refinanced by its existing lending partner, Australia and New Zealand Banking Group Ltd (ASX: ANZ). The fixed rate institutional loans have been entered into with Pricoa Private Capital, whom are a subsidiary of Prudential Financial Group.

Alliance managing director, Scott McMillan commented:

We are extremely satisfied with the outcome of this financing renewal. Alliance has always taken a longer-term view of the assets it acquires, and we have now sourced funding that aligns with this view.

Pricoa has provided Alliance with debt facilities that have more flexible terms at a lower cost to the group and with a tenure that will allow Alliance to focus on the deployment of these aircraftandareturnofcapitaltoitsshareholdersinashortatimeaspossible. We welcome Pricoa to the Alliance family and are very excited to see this relationship grow in the future.

Alliance share price summary

The Alliance share price has strongly rebounded since the airline industry nosedived from March last year. Government mandated measures restricted passenger movement and effectively halted almost all airlines due to COVID-19.

However, the company’s share price has gained traction over the past 12 months, outperforming its peers who are still well below their 52-week highs. Alliance shares recently reached an all-time high of $4.92 last month.

More reading

• 2 ASX shares that multiple brokers think could be buys
• Alliance (ASX:AQZ) share price edges lower despite positive update

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If you’ve invested in ASX shares, you’ve likely struggled with this costly pitfall before.

Investors often buy shares because they have a good feeling about them. And then they hold onto them even when the fundamental reasons behind buying the shares have changed, and the price is falling.

Or, on the other side of the coin, they may sell out of an ASX share simply because they feel it’s reached its high.

Investing based on feelings or emotions is something most investors struggle with. But Robert Francis – online trading platform eToro’s Australia managing director – says that all too often leads to losing trades.

Check your emotions at the door

“Humans tend to have emotional connections to their money and often subconsciously apply these same emotions to their investment portfolio,” Francis told the Motley Fool.

And it’s not just newbies putting their hard-earned money where their heart is.

“Even the most experienced investors can fall into the emotional investing trap,” Francis said.

That’s even more true during periods of higher volatility, which “may incite a feeling of excitement if the market goes up, but can quickly turn to fear if the market crashes”. 

The penchant towards emotional investing tends to grow when investors have too much at stake, either in a single share or across the ASX. It’s a good reminder only to invest what you can afford to lose. 

And don’t let yourself get a big head if you’ve made some profitable investments.

According to Francis:

Another pitfall for investors is overconfidence. After making a few rewarding investments, investors can delude themselves into thinking they’re above the average investor in a bull market and tend to trust their gut with everything. This often leads to loss. 

Stay humble and, remember, you’re never too old to learn. “Some of the most successful investors are also the most pragmatic,” Francis said.

Fear and greed on the ASX

Francis calls emotional investing, as opposed to investing based on logic, a high-risk method. “Often it will lead investors to make irrational decisions based on short-term fear, which causes them to lose sight of their strategic objectives and financial goals.”

So what types of mistakes can emotional investing lead to on the ASX?

According to Francis:

The most common emotional reaction is that investors either experience buyers’ regret or overreact during times of stress, euphoria or panic. It means they’re more susceptible to hype-buying, which can lead to ill-informed investment decisions.

It can also lead to panic-selling where potential profit is not realised because the stock is sold at a loss, or significantly lower than its intrinsic value.

As for investors who may have sold most or all of their ASX shares during last year’s COVID driven market rout and are still sitting predominantly in cash, Francis said, “Investors driven by fear or pessimism can miss out on investing opportunities waiting for a market correction or bear run that doesn’t come.”

Indeed, investors who’ve been waiting for a market correction following the 2020 February and March selloff are most likely still waiting.

Down a slender 0.11% at the time of writing, the S&P/ASX 200 Index (ASX: XJO) is up some 49% since the 20 March 2020 lows.

How can ASX investors avoid such a common human impulse?

The big question for ASX investors then is: how can we avoid such an integral human impulse as emotion?

According to Francis, “The key is to take a rational, measured approach to investing. This mindset can be achieved with due diligence, a disciplined investment process, and a sense of perspective.”

Francis shared a few other tips with the Motley Fool.

Chief among those is to “establish and stick to a strategy” with clear investment goals. Taking a long-term view tends to be an easier plan to stick with and “prevents investors from getting caught up in short-term traps”.

Another investment nugget he shared: ignore the hype. Now, this isn’t always easy to do. Particularly in today’s world of around the clock news feeds accessible almost everywhere you go.

But Francis urges investors to be critical of the information they come across. “Research your investments before deploying any capital. And make informed decisions about the intrinsic value of a company before you introduce it to your portfolio.”

Two other valuable, but often overlooked, investing tips Francis shared to help manage risk are: diversification (stocks, crypto assets and other financial instruments) and dollar-cost averaging (DCA).

Finally, Francis told us, it’s best for investors to just be patient.

Many investors already know the saying ‘investing is a marathon, not a sprint’. But really, this is true. The more investors try to get rich quickly, the greater the chance they will lose their money. Usually, the sprinter is emotional.

Being consistent over time is extremely difficult. However, being an emotionally controlled marathoner will generate consistent and long-term returns.

There you have it.

ASX investors, you’d do well to check your emotions at the door.

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