The SciDev Ltd (ASX: SDV) share price will be one to watch today. The chemical engineering company announced a partnership with Fortescue Metals Group Limited (ASX: FMG).

Yesterday, the share price closed up 0.7% to finish at 68 cents. In comparison, the S&P/ASX All Ordinaries Index finished 0.4% higher.

Let’s take a closer look at what’s in the new deal.

The SciDev/Fortescue deal

In a statement to the ASX, SciDev announced it would “participate in a commercial trial” with Fortescue Metals. The trial will last one week and be conducted at the Fortescue Solomon Hub in the Pilbara region, Western Australia.

SciDev won the contract through a competitive tender process. Fortescue will pay the company $60,000 for its time.

Fortescue will be trialling SciDev’s MaxiFloat technology. According to SciDev’s website, MaxiFloat is a range of products intended for the treatment of wastewater in the mining, and oil and gas industries.

Commenting on the deal, SciDev Managing Director and CEO, Lewis Utting said:

The agreement with Fortescue further extends the presence of SciDev chemistry and services across major mining projects in Australia. With water being a premium commodity in the Pilbara, SciDev’s technology can add real benefit to our customers as well as reduce their environmental footprint. The continued growth of SciDev and our ability to work with and service major mining companies such as Fortescue highlights the caliber of the SciDev team in executing the technical and commercial evaluations with our customers.

What is mining wastewater and why does it need to be treated?

According to the Commonwealth Scientific and Industrial Research Organisation (CSIRO), mining is very water-intensive. Some the ways water is used in the industry include:

• transportation of ore and waste in slurries
• separation of materials with chemical agents, and
• suppression of dust during processing and transportation.

Water is a scarce resource in Australia. Governments and the industry at large strongly encourage water recycling when possible. Through the mining process, however, water will become polluted. This is why it needs to be contained and treated before it can be recycled back into the environment.

SciDev and Fortescue share price snapshots

At its current level of 68 cents, SciDev’s share price is on an upward path. This time last year, shares in the company were selling at 57 cents. In the general panic of COVID-19 the share price reached a low of 25 cents.

Fortescue’s share price, similarly, is also trending in the right direction. Just 12 months ago, shares in the miner cost an investor $8.58 each. As of yesterday, the share price was $22.18. That’s an impressive 142.1% gain over 52 weeks.

The respective market capitalisations of SciDev and Fortescue Metals are $104.2 million and $68.3 billion.

More reading

• The 3 highest paying ASX 200 dividend shares
• Why the Fortescue (ASX: FMG) share price could go higher
• The worst performing ASX 200 shares last week
• ASX 200 Weekly Wrap: ASX finishes higher, despite tech selloff
• Morgan Stanley reveals some investment trends to watch in 2021

Motley Fool contributor Marc Sidarous 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.

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The Vulcan Energy Resources Ltd (ASX: VUL) share price is charging higher on Wednesday morning.

At the time of writing, the lithium-focused mineral exploration company’s shares are up 12% to $6.25.

This latest gain means the Vulcan share price is now up 125% since the start of the year.

Why is the Vulcan share price charging higher?

Investors have been buying Vulcan shares this morning following the release of the results from its 2021 Upper Rhine Valley bulk brine sampling.

According to the release, Vulcan collected a bulk (10,000 litre) brine sample from a recently drilled geothermal well in the Upper Rhine Valley. This is within 6km of the company’s Ortenau Resource and license area.

The bulk brine sample returned a high grade of 214 mg/L Li and will be used in Direct Lithium Extraction (DLE) piloting test work.

This means that Vulcan now has brine data stretching back to 1980 which shows very consistent lithium values in Upper Rhine Valley brine.

These results bode well for its Vulcan Zero Carbon Lithium project, which will be the largest lithium resource in Europe.

Management commentary

Vulcan’s Managing Director, Dr. Francis Wedin, was pleased with the results of the samples.

He commented: “It is encouraging to observe high grade lithium, with exceptionally low impurities, in geothermal brine analysis such as this from our sampling efforts in the URVP. The low impurities are important as this increases the effectiveness of our DLE techniques.”

“Results of this nature will be combined with seismic and historical drilling data, which will be used by our expert in-house geological team for production study work towards the Definitive Feasibility Study. This data collection and analysis is an important part of our strategy to become a major supplier of our unique Zero Carbon Lithium to the European battery electric vehicle market.”

More reading

• The Vulcan Energy (ASX:VUL) share price has fallen 17% in 2 weeks
• Vulcan (ASX:VUL) share price slumps despite new partnership
• Why the Vulcan Energy (ASX:VUL) share price is charging higher again

Motley Fool contributor James Mickleboro 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.

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The Afterpay Ltd (ASX: APT) share price has returned to form on Wednesday.

In morning trade, the payments company’s shares are up 9% to $116.74.

Why is the Afterpay share price charging higher?

There have been a couple of catalysts for the strong gain by the Afterpay share price on Wednesday.

The first is a very strong performance by US tech stocks overnight after bond yields pulled back.

This led to the tech-heavy Nasdaq index having its best day in four months. It recorded a sizeable 3.6% gain after investors took advantage of recent weakness to snap up tech giants such as Amazon, Apple, and Tesla. In addition to this, rival buy now pay later provider Affirm saw its shares jump 7% overnight.

What else is supporting Afterpay’s shares?

Also giving the Afterpay share price a lift today was an update on its European expansion.

According to the release, the company has completed its acquisition of Pagantis SAU and PMT Technology.

With the acquisitions now complete, Afterpay advised that it will progress with the launch of its Clearpay services in Europe.

The first countries that Afterpay plans to go live with are Spain, France, and Italy. These countries combined have an addressable ecommerce market that exceeds 150 billion euros.

Commenting on the expansion into Europe last year, Co-CEO Anthony Eisen was very positive on the company’s prospects in the region.

He said: “Our momentum to date has given us the confidence to expedite our expansion into new global regions. Entering into such internationally relevant markets like the US and the UK and seeing our growth outpace what we experienced in our more mature Australian market, validates the appeal of our product on a global scale.”

“Acquiring Pagantis provides us with the necessary regulatory licencing, resourcing and infrastructure to expedite the launch of Afterpay into key countries in Southern Europe and beyond. The new markets we will be entering will provide our global retailers with the opportunity to offer Afterpay in more regions and for us to provide a whole new customer base with access to our differentiated and customer centric model.”

More reading

• PayPal BNPL product to take on Afterpay and Zip in Australia
• ASX 200 tech shares set to rebound as bond yields fall
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Afterpay sinks, Vocus jumps
• ASX tech correction? 10 of the worst-hit shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. 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.

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It has been another interesting year for shareholders of tech company WiseTech Global Limited (ASX:WTC). The former market darling’s shares were savaged during the COVID-19 market crash a year ago, falling from nearly $40 per share to under $10 in a matter of months.

But, as the dust began to settle on the pandemic, the WiseTech share price recovered, and by late January the company’s shares had climbed to a new 52-week high of $34.42. However, another global mini-tech sell-off, combined with a lukewarm market response to the company’s first-half FY21 results announcement, has seen the WiseTech share price tumble almost 25% to $26.16 as at the time of writing.

What does WiseTech do?

For those needing a refresher on what WiseTech actually does, it is a logistics software company. Its flagship product is the CargoWise platform, which aims to provide a centralised global trade management solution. Users are able to access the platform from anywhere in the world, in multiple languages and currencies, and it can provide up-to-date, live inventory tracking information.

The software also helps users manage the complexities of global logistics, allowing them to better understand the implications that changes in international tariffs and taxes will have on their business.

How has the company been performing?

WiseTech reported total revenues of $238.7 million for the first half of FY21, a 16% increase over the same period last year.  Earnings before interest, tax, depreciation and amortisation expenses (EBITDA) jumped 43% to $89.2 million, while underlying net profit after tax soared by 61% to $43.6 million. The Wisetech share price did jump 9% at the time the company’s results were released.

Despite WiseTech’s fondness for driving growth through acquisitions (the company has made a whopping 39 acquisitions since its initial public offering (IPO) back in 2016), much of the revenue uplift was organic. CargoWise accounted for $150 million of the company’s first-half revenue (an increase of 19% over the first half FY20), while acquisition revenue made up the remaining $88.7 million – a more modest year-on-year increase of 12%.

What was more pleasing to see were the cost synergies that these acquisitions had delivered – particularly during a period when many companies have been experiencing serious market headwinds from the COVID-19 pandemic.

Cost efficiency measures and acquisition synergies delivered $6.1 million in benefits over the first half, boosting EBITDA margin by an impressive 7 percentage points to 37%.

WiseTech also ended the half with a healthy cash position of $251.4 million and significant undrawn debt facilities, making it unlikely the company will need to raise additional funding via an equity capital raise any time soon.

Outlook for FY21

In its results announcement, WiseTech actually upgraded its revenue guidance for FY21. It stated it still expected revenues to be in the range of $470 million to $510 million (an increase of between 9% to 19%). However, it updated its EBITDA target, reflecting the continuing benefit that acquisition synergies and cost efficiency strategies are expected to deliver to the company’s bottom line over the second half of this financial year.

WiseTech now anticipates EBITDA to be in the range of $165 million to $190 million, an uplift of between 30% to 50% over FY20.

More reading

• Why ASX 200 tech shares could be in for another wild session
• Why is everyone talking about bond yields?
• What you need to know about the WiseTech (ASX:WTC) dividend
• 5 things to watch on the ASX 200 on Friday
• ASX 200 sinks, Xero reveals acquisition, ARB driven higher

Rhys Brock owns shares of WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of WiseTech Global. 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.

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The ASX share market is poised to rally for its third straight day but two stocks in particularly will be closely watched after they got a broker upgrade.

The futures market is tipping a 0.3% rise in the S&P/ASX 200 Index (Index:^AXJO) this morning thanks to positive leads from Wall Street.

But the embattled Insurance Australia Group Ltd (ASX: IAG) share price is in the spotlight after JPMorgan upgraded it to “overweight” from “neutral” today.

Why the IAG share price could rebound

This could help the IAG share price rebound from yesterday’s 4% sell-off due to contagion fears on the collapse of Greensill Capital.

The broker believes the big sell-off is overdone and that the fall represents a buying opportunity.

IAG issued a statement confirming it has no net insurance exposure related to Greensill entities and sold its 50% stake in the underwriting agency backing Greensill.

Less risky than thought

Several things will need to go wrong together for this to pose a risk to IAG, according to JPMorgan. This includes the collapse of Tokio Marine, which bought IAG’s stake.

That’s unlikely as Tokio Marine writes more than $50 billion in premiums each year. The broker thinks the fallout from Greensill is manageable for an insurer that size.

JPMorgan’s 12-month price target on the IAG share price is $5 a share.

Another ASX share upgraded to “buy”

Another ASX share that got upgraded by JPMorgan today is the Qantas Airways Limited (ASX: QAN) share price.

While the Qantas share price has taken off 12% over the past month, the broker believes there is more upside for the airline.

“We are in the early stages of a recovery and believe Qantas is well positioned both from a balance sheet and competitive position to come out of the crisis stronger,” said the broker.

“It has taken material costs out of the business with ~$1bn pa likely to be an ongoing savings from FY23.”

COVID loser to winner

The broker is forecasting Qantas to be cash flow positive again from the June quarter. It upgraded the Qantas share price to “overweight” from “neutral” and increased its 12-month price target by 50 cents to $6 a share.

While this puts Qantas shares at a slight premium to its historical valuation, JPMorgan thinks this is justified.

The COVID-19 pandemic has knocked off competition and Qantas appears to be in a stronger competitive position.

More reading

• 2 of the best ASX 200 blue chips to buy right now
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Afterpay sinks, Vocus jumps
• Should ASX 200 investors be worried about inflation? Janet Yellen isn’t…
• IAG (ASX:IAG) share price takes wild ride on Greensill fears

Motley Fool contributor Brendon Lau 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.

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The Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) share prices have retreated in recent days, largely due to going ex-dividend. Despite a lower share price for large cap miners, commodity prices have remained buoyant.

Macquarie Group Ltd (ASX: MQG) has run the ruler over the Rio Tinto and BHP share prices, rating them both as ‘outperform’. 

Rio Tinto and BHP share prices go ex-dividend 

The BHP share price went ex-dividend on 4 March, paying a fully franked interim dividend of $1.298. This resulted in a 3% slide in BHP shares on the day. 

Similarly, Rio Tinto went ex-dividend on 4 March, paying a full franked final dividend amount of $5.171. This translated to a 6.30% fall for Rio Tinto shares on the day. The date a share goes ‘ex-dividend’ is the day on which it starts selling without the value of its next dividend payment. As such, in order to receive the company’s next dividend payment, an investor needs to own the shares before the ex-date.

Macquarie rates both miners as ‘outperform’ 

Macquarie upgraded its forecasts for copper in the short term by 20% and 30% in the medium term. Its bullish view on copper is driven by an anticipated increase in demand from a global effort to transition into renewable and green energy.

Macquarie believes the improved copper price outlook could translate to a 6% to 11% upgrade to earnings for BHP across FY22 to FY25. As a result, the broker raised its BHP share price target from $50 to $55. This represents an upside of ~12% after the BHP share price closed at $48.99 on Tuesday. 

Similarly, the improved copper price outlook could see a 2% to 9% improvement in Rio Tinto earnings across 2021 to 2024. The broker upgraded its target price from $135 to $142. This represents an upside of ~17% after the Rio Tinto share price closed at $121.21 on Tuesday. 

Will iron ore prices continue to stay high? 

While Macquarie has turned its attention to copper as a catalyst to upgrade the Rio Tinto and BHP share prices, the iron ore price is just as important. 

Analysts at Commonwealth Bank of Australia (ASX: CBA) have remained cautious of currently elevated iron ore prices. Their view is that prices could remain above US$140 per tonne for the first half of the year, before moderating as China becomes unable to sustain its commodity and infrastructure-driven growth. In the meantime, iron ore prices have benefitted from China restocking its inventories after its week-long Lunar New Year break during mid-February. 

More reading

• How does China really feel about Australian iron ore and coal?
• ASX 200 Weekly Wrap: ASX finishes higher, despite tech selloff
• Morgan Stanley reveals some investment trends to watch in 2021
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises, Rio chair will leave, Nine gets a new CEO

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Mineral Resources Ltd (ASX: MIN) share price closed higher yesterday, up 0.4% to $38.69. However, one broker believes there is still more fuel in this company’s tank.

Considering Mineral Resources is a mid-cap share, its performance over the past 12 months has been nothing short of jaw-dropping. Strap yourself in for this one… In the past year, Mineral Resources shares have returned 179%, outstripping the S&P/ASX 200 Materials Index (ASX: XMJ) by over 130%.

Iron ore demand ‘steels’ the show

Mineral Resources has largely benefitted from the strong demand for its iron ore. This insatiable demand comes predominantly from China, as its steel production soars.

As a result, the company has lifted its production volumes and exported its product at a much higher price per tonne. Consequently, Mineral Resources’ profit margins have increased to 56%, which is remarkable for a mining company.

Notably, Mineral Resources doesn’t just own iron ore assets, it also produces lithium. Despite the poor performance of the lithium segment in the last half, plenty of speculation is still swirling around future demand for the battery-making resource.

Broker’s take on the Mineral Resources share price

Macquarie Group Ltd (ASX: MQG) has recently increased its rating to ‘outperform’ on Mineral Resources shares, accompanied by a $50.50 price target. This represents just over a 30% upside on the current Mineral Resources share price.

The investment bank noted several aspects that it likes about the mining company. These included Mineral Resources’ joint venture (JV) with United States lithium giant Albemarle, which involves the development of the Kemerton hydroxide processing plant. The project is expected to be ready for production in 2022.

Including the planned upgrades, Macquarie forecasts Mineral Resources production from the JV to reach 60,000 kilotonnes per year by 2027. According to Macquarie, the tantalising prospect is also expected to be self-funded through the company’s strong cash flows.

The broker cited the main risk to near-term earnings as being iron ore price movements. Coincidentally, last night iron ore futures dropped by 10% in a sudden dumping.

#China‘s most actively traded #IronOre futures contract on Dalian Commodity Exchange hit limit-down, plunging 10% to hit 1,031.5 yuan/tonne, the lowest since Feb 9. pic.twitter.com/6tJmEiSBcS

— YUAN TALKS (@YuanTalks) March 9, 2021

https://platform.twitter.com/widgets.js

Macquarie forecasts Mineral Resources to produce an underlying profit of $938 million for the 2021 financial year, with the company to pay a dividend of $2.35 per share.

More reading

• Morgan Stanley reveals some investment trends to watch in 2021

Motley Fool contributor Mitchell Lawler owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Competition in the Australian buy now pay later (BNPL) market is about to increase for leaders Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

Following a successful launch late last year in the United States, payments giant PayPal (NASDAQ: PYPL) has just announced plans to bring its service to the Australian market.

What did PayPal announce?

On Tuesday PayPal announced that it will be launching its Pay in 4 BNPL product in Australia in the coming months.

According to the release, PayPal, which has over 9 million active accounts in Australia, intends to roll out the BNPL solution to its Australian customers in early June 2021. This will mean it is ready for use by the end of financial year sales period.

The release explains that the Pay in 4 service will be accessible to consumers in two ways. One is when a consumer pays using the standard PayPal button. After clicking, it will appear at checkout in the PayPal wallet as a payment option.

In addition, businesses can present PayPal Pay in 4 as a distinct payment option on their website.

The company notes that as PayPal Pay in 4 is a payment option in the PayPal wallet, it will be available for consumers wherever PayPal is accepted. This means consumers can use it at hundreds of thousands of Australian businesses and millions of global businesses.

PayPal also notes that its regular security and protections offered by its platform will apply for transactions made using PayPal Pay in 4.

As a result, eligible purchases will be covered by PayPal’s Buyer Protection. This means that if a product does not arrive, PayPal can refund the full purchase price, including delivery. Businesses will also benefit from PayPal’s advanced decisioning process to prevent fraud while underwriting shoppers. They will also be covered by PayPal’s Seller Protection for eligible transactions.

Importantly, unlike Afterpay and Zip, PayPal Pay in 4 provides an interest-free buy now, pay later solution to consumers at no additional cost to PayPal business customers. Though, PayPal’s existing account arrangements remain applicable. It currently charges 2.6% + 30 cents for commercial transactions.

More choice

PayPal Australia’s General Manager of Payments, Andrew Toon, commented: “Australian consumers are looking for more choice and flexibility and PayPal Pay in 4 gives them yet another way to purchase securely using PayPal. PayPal’s digital wallet is the only solution that provides multiple ways to pay all in the one place – instantly with debit or credit card; 21 days later with our Pay After Delivery option; and now in four interest-free instalments using PayPal Pay in 4.”

“Our Australian business customers have been requesting buy now pay later functionality from us, and we’re excited that we can offer PayPal Pay in 4 to them at no additional cost. Shopping habits are changing at an unprecedented rate and during the pandemic we saw more than two million Australians start shopping online for the first time. We will continue to support Australian businesses of all sizes to adapt to rapidly changing consumer behaviours by evolving our service to meet their needs.”

More reading

• ASX 200 tech shares set to rebound as bond yields fall
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 rises, Afterpay sinks, Vocus jumps
• Here are the US shares ASX investors have been buying
• ASX tech correction? 10 of the worst-hit shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Shares of Tesla Inc (NASDAQ: TSLA) ripped higher on Tuesday. The stock rose as much as 20%, adding more than $100 billion to the electric-car maker’s market capitalisation — or about a Zoom Video Communications‘ worth of market cap. As of this writing, shares are up 19.2%.

Here’s what’s behind the massive move higher, as well as a look at whether this is a good time to buy the stock or not.

Rebounding from a brutal beating

The stock’s big gain on Tuesday follows painful decline in recent weeks. Between mid-February and yesterday, Tesla stock had cratered more than 30%. This brought the stock’s year-to-date return to negative 20%.

Tesla stock’s pullback leading up to Tuesday has been mostly driven by broader-market dynamics. Specifically, growth stocks like Tesla have been getting hammered as the market’s appetite for them took a breather after many tech and growth stocks rose much faster than the overall market in 2020.

But based on how most growth stocks are rebounding on Tuesday, the market generally seems convinced that the recent sell-off went too far.

Is this a buy signal?

It seems a few analysts agree that Tesla shares have become more attractive recently.

On Tuesday, New Street analyst Pierre Ferragu upgraded the stock from a neutral rating to a buy rating. In addition, he gave the stock a $900 12-month price target, noting that the company has clear catalysts in place to grow its deliveries meaningfully over the next two years, with annualized deliveries potentially quadrupling in three years. Ferragu also forecasts Tesla’s annual earnings per share (EPS) could grow to $12 by 2023 — 50% higher than what the consensus analyst estimate currently calls for. 

Wedbush analyst Daniel Ives was similarly upbeat about Tesla stock on Tuesday. The analyst, who has a neutral rating on the stock and a $950 price target, said he believes the company has strong vehicle delivery momentum in China. 

Despite these analysts’ optimistic remarks about the automaker, investors should keep in mind that the stock’s valuation is still on the pricey side. For instance, the company’s market capitalisation is about 20 times its trailing-12-month sales — even after the stock’s recent pullback.

Of course, given the growth trajectory of Tesla’s business, it’s fair to say that shares should trade at a pricey valuation. Management, for instance, believes deliveries will increase from about 500,000 last year to more than 750,000 this year. Moreover, the consensus analyst forecast calls for annual revenue to increase from less than $32 billion in 2020 to $48 billion in 2021 and $63 billion in 2022.

And if electric vehicles continue growing in popularity, it’s possible we will hit a tipping point in which most new vehicle buyers will want electric vehicles. Tesla, of course, would be positioned well to benefit from a vehicle revolution like this if it happens.

There’s no telling if this is the bottom for Tesla stock. I’d argue that it likely isn’t, simply due to the volatile nature of this growth stock. But one thing is clear: The stock is a much better deal than it was when shares reached an all-time high of more than $900 earlier this year.

While Tesla stock certainly isn’t a bargain at this level, this could be a good time for investors willing to hold shares for years to initiate a small position in this growth stock.

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

More reading

• Here are the US shares ASX investors have been buying
• The tech-heavy Nasdaq is now in a correction!
• Why Tesla Stock Fell Further on Monday
• This was the week that ASX dividend shares proved their worth
• Why Tesla stock is stuck in reverse

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla and Zoom Video Communications. The Motley Fool Australia has recommended Zoom Video Communications. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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BetaShares NASDAQ 100 ETF (ASX: NDQ) is an exchange-traded fund (ETF). There are quite a few reasons why this investment could be worth considering.

What is BetaShares?

BetaShares describes itself as a leading manager of ETFs and other funds traded on the ASX. It was founded in 2019 – its aim is to provide intelligent investment solutions to help Australian investors meet their financial objectives.

At the end of February 2021, BetaShares had over $16 billion of assets under management.

About BetaShares NASDAQ 100 ETF

You might be able to guess that BetaShares NASDAQ 100 ETF owns 100 businesses within its portfolio. It has 100 of the biggest non-financial companies that are listed on the NASDAQ. BetaShares says that the portfolio includes many companies that are at the forefront of the ‘new economy’.

Here some of the main reasons why investors could be interested in BetaShares NASDAQ 100 ETF:

1: Strong returns

One of the most important, perhaps the most important, reason to like an investment is the returns that it generates.

As at 26 February 2021, all of BetaShares NASDAQ 100 ETF’s longer-term net returns have been above 20% on an annualised basis.

The prior 12 months showed a net return of 27.3%. The average net return per annum over the previous three years had been 24.2% per annum, over the last five years the net return was 23.7% per annum and since inception the net return per annum had been 20.7% per annum.

Whilst this isn’t the strongest return out of all ETF’s, it has been much stronger than the ASX 200.

2: Management fee

This ETF has an annual management fee of 0.48% per annum. Whilst this isn’t as cheap as some ETFs like iShares S&P 500 ETF (ASX: IVV), it is much cheaper than an active fund manager that might typically charge an annual management fee of 1% per annum.

The lower the management fee, the more of the net return that stays in the hands of the investor.

3: Holdings

BetaShares NASDAQ 100 ETF has a high quality portfolio of shares, which are among the strongest businesses in their industries across the world.

At 8 March 2021, its largest holdings were: Apple, Microsoft, Amazon, Alphabet, Tesla, Facebook, NVIDIA, PayPal and Comcast.

4: Focus on technology

There is a tendency for US technology businesses to choose to list on the NASDAQ, which means that the ETF is weighted towards technology.

At the end of January 2021, almost half of the portfolio was classified as information technology businesses, with another 19.2% being consumer discretionary and 18.3% being communication services.

However, most people would think of Amazon and Tesla as technology businesses – but they are classified as consumer discretionary. Alphabet, Facebook and Netflix are classified as communication services.

5: Global earnings

Whilst all of BetaShares NASDAQ 100 ETF’s holdings are listed in the US, there is definitely global earnings from the portfolio. Businesses like Microsoft effectively serve customers in almost every country in the world. Facebook’s offerings are available in most places around the world.

There are also businesses that are headquartered overseas, but are listed on the NASDAQ. Some of the businesses that are examples of that include Baidu, JD.com, MercadoLibre, ASML and Atlassian.

More reading

• IOUpay and Zip were among the most traded ASX shares last week
• Why this ETF could be a fantastic option for ASX investors
• Top ASX shares to buy in March 2021
• 1 great way for Aussies to get exposure to Tencent and Alibaba
• 2 ASX tech shares to buy in March 2021

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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