If you’re approaching retirement and currently constructing an investment portfolio for this next stage in your life, then I think the ASX 200 shares listed below would be worth considering as candidates.

I believe these ASX shares have positive outlooks and are well-positioned to grow their earnings and dividends over the long term. Here’s why I like them:

Coles Group Ltd (ASX: COL)

The first share to consider buying for a retirement portfolio is Coles. I think it would be a great core holding because of its strong business model, attractive yield, positive long term outlook, and defensive qualities. In respect to the latter, this year Coles has proven that it can perform no matter what the economy throws at it.

Despite the pandemic and the bush fires, it reported a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million in FY 2020. The good news is that I’m confident there will be more of the same over the rest of the 2020s. All in all, this could make the Coles share price a long term market beater.

Goodman Group (ASX: GMG)

Another of my favourites for a retirement portfolio is Goodman Group. It is a global industrial property company that owns, develops, and manages modern industrial real estate including logistics facilities, warehouses, and business parks in strategic locations throughout 17 countries. 

I’m a big fan of the company due to its gateway city strategy. This strategy means Goodman focuses on investing in and developing high quality industrial properties in strategic locations. These are close to large urban populations and in and around major gateway cities globally. This is where demand is strong and transformational changes are driving significant opportunities for its business. Given this strategy and its outstanding property portfolio, I believe Goodman is well-placed to deliver solid earnings and distribution growth over the next decade and beyond. 

More reading

• Bolster your portfolio with these outstanding ASX blue chip shares
• 2 top ASX dividend shares I would buy for income this week
• Beat an RBA rate cut with these ASX dividend shares
• 3 ASX dividend shares to buy in a downturn
• 4 of the best ASX 200 shares to buy in September

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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You can give yourself a payrise by investing in the ASX dividend shares that I’m going to talk about in this article.

The great thing about some ASX businesses is that they can continue to pay solid dividends (or distributions) to shareholders even if there is a recession in the economy and even if there is volatility.

Some ASX shares can continue to pay attractive dividends to investors for many years to come.

I believe these ASX dividend shares are attractive ideas to boost your income:

WAM Leaders Ltd (ASX: WLE)

WAM Leaders is a listed investment company (LIC) which targets large shares on the ASX.

One of the main benefits of a LIC is that it can make investment returns and turn that profit into dividends for shareholders. Normal companies make profit from selling products or services. LICs make their profits with investment profits.

WAM Leaders has been steadily growing its dividend for a few years now. The LIC was formed in May 2016 and it started paying a dividend in FY17. The ASX dividend share’s portfolio has made an average return of 10.6% (before fees, expenses and taxes) per annum since inception, outperforming the S&P/ASX 200 Accumulation Index by 3.5% per annum.

The LIC is currently undertaking a capital raising. WAM Leaders has announced the board’s intention to increase its FY21 interim dividend to 3.5 cents per share, which would be a 7.7% increase compared to the FY20 interim dividend.

At the current WAM Leaders share price it’s offering a forward grossed-up dividend yield of at least 8.1%.

Vitalharvest Freehold Trust (ASX: VTH)

Vitalharvest is an agricultural real estate investment trust (REIT) which owns large citrus and berry farms in Australia, some of the biggest in the country.

The ASX dividend share generates rent in two different ways. It receives fixed rent for the farms. It also receives variable rent from its tenant, Cost Group Holdings Ltd (ASX: CGC). The variable rent comes from a profit-share agreement where Vitalharvest receives 25% of the profit from those farms.

The FY20 variable component was the lowest it has been in years, yet Vitalharvest was still able to pay a distribution which equates to a 6.1% distribution yield at the current Vitalharvest share price. That’s a good yield in my opinion.

I expect the ASX dividend share’s distribution can grow organically as variable returns to normal as the drought lifts and demand for food increases.

I’m excited by the new manager’s plans to buy food-related assets which could provide more consistent rent like food storage buildings and food processing properties.

The ASX dividend share is currently trading at a 14% discount to the Vitalharvest net asset value (NAV) at 30 June 2020.

Pacific Current Group Ltd (ASX: PAC)

Pacific is a business that is an asset management outfit which helps its investment partners by using its resources like capital, institutional distribution capabilities and operational expertise to help partners excel.

Excluding non-cash impairments, Pacific had a strong FY20 result with underlying earnings per share (EPS) rising by 18% to $0.51. This gave the board the confidence to increase the full year dividend by 40% to $0.35. That was after a final dividend of $0.25 per share.

If the company’s net profit can keep going up then I think the dividend could continue to rise. In FY20 alone its funds under management (FUM) grew by 52% (excluding boutiques sold and acquired during the year) to $93.3 billion. If it can grow its FUM by more than 10% a year then the dividend could continue to grow nicely over the coming years as well.

At the current Pacific share price it offers a grossed-up dividend yield of 8.25%.

Foolish takeaway

I like each of these ASX dividend shares. Pacific could produce good market-beating returns if its FUM keeps rising. WAM Leaders offers nice diversification and decent returns, whilst Vitalharvest offers an alternative investment into agriculture for ASX investors.

More reading

• ASX dividend share WAM Leaders (ASX:WLE) flags dividend boost
• 2 top ASX shares to buy for income and growth
• Top ASX dividend shares to buy in September 2020
• 3 ASX dividend shares I’d buy with $3,000 today
• 3 ASX shares now trading at crazy cheap prices

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Unibail Rodamco Westfield (ASX: URW) share price closed today’s trade down 5.33% to $3.02 per share. This comes after the commercial real estate giant released details of its 9 billion euro (A$14.5 billion) reset plan.

Unibail’s share price is now down to new 52-week lows. Like almost every retail share, Unibail got knocked down during the COVID-19 market rout earlier this year, falling 58% from 18 February through 18 March.

Unlike many of its peers, though, the Unibail share price hasn’t recovered from the selloff. In fact, it’s gone the other way, down another 30% from 18 March. Year-to-date, Unibail’s share price is down 73%.

By comparison the S&P/ASX 200 Index (INDEXASX: XJO) is down 12% in 2020.

What does Unibail Rodamco Westfield do?

Unibail is among Europe’s largest commercial real estate companies, owning retail and office complexes. It has assets in Europe, the United Kingdom and the United States of America.

Unibail acquired Australian shopping centre operator Westfield Corporation, created by the split of Westfield Group, in 2018, which then saw Unibail shares list on the ASX.

What reset plan did Unibail announce?

Unibail said its 9 billion euro reset plan will strengthen its balance sheet and give it increased financial flexibility to pursue its long-term strategies.

The deleveraging plan includes a fully underwritten 3.5 billion euro capital raising the company plans to use straight away to pay down its debt obligations.

Unibail also stated it will limit cash dividends through scrip and a lower payout ratio. A measure it expects will save 1 billion euros in cash over the next 2 years. It also plans to cut its non-essential operating capital expenditures and development by 800 million euros.

By the end of 2021, Unibail expects to complete 4 billion euros worth of disposals. On the European front, approximately half the disposals are retail assets with the other half offices. It also plans to reduce its US regional mall footprint in the near term. The company stated that 1 billion euros of disposals are already well advanced.

The reset plan is intended to maintain Unibail’s strong investment grade credit rating, as well as a sustainable capital structure with a loan to value (LTV) ratio below 40%> It’s also aiming to keep the net debt/earnings before income, taxes, depreciation and amortisation (EBITDA) ratio below 9 times.

Commenting on the announcement, Christophe Cuvillier, group CEO, said:

URW’s immediate priority, as announced on July 29, is to deleverage, primarily through asset disposals. However, given the uncertainties around the duration of the COVID-19 pandemic and the recovery, we have decided, as a matter of prudent management, to substantially strengthen our balance sheet, in order to maintain a robust investment grade credit rating and to ensure flexibility in a world that is unpredictable and requires agility…

On the operational front, we see continued improvement in footfall and tenant sales, and are making steady progress in our tenant negotiations. As the environment remains challenging, we believe today’s announcement, including the fully underwritten capital raise, is an important step to ensure URW is best positioned for the future.

With a tough year behind it, the Unibail share price will be one to watch as the reset plan unfolds.

More reading

• Last week’s worst performing ASX shares
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower
• These were the worst performing ASX 200 shares last week

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Scentre Group (ASX: SCG) share price is rising today as the company priced US$3 billion worth of hybrid notes. The Scentre share price is trading 2.64% higher to $2.33, whilst also leading the number of securities traded on the S&P/ASX 200 Index (ASX: XJO) at the time of writing.

What Scentre does

Scentre is a leading Australian real estate investment trust (REIT). The retail property group owns and operates the well-known Westfield properties across Australia and New Zealand. These properties are some of the most highly regarded retail assets in the region and enjoy hundreds of millions of customer visits each year.

As a result of the COVID-19 pandemic the Scentre share price has seen a sharp decline so far this year, falling a huge 40%. This is woeful in comparison to the smaller 11% drop in the All Ordinaries Index (ASX: XAO) index.

Why is the Scentre share price rising today?

The Scentre share price is rising today as the company announced that they have priced US$3 billion of subordinated hybrid notes in the US market. The hybrid note issue comprises:

• US$1.5 billion 60-year, non-call 6-year subordinated notes with a coupon of 4.75%, and
• US$1.5 billion 60-year, non-call 10-year subordinated notes with a coupon of 5.125%

This is the group’s inaugural issuance of hybrid notes, which diversify its sources of capital and are expected to be a long-term feature of Scentre’s funding moving forward. As a result, Scentre now has sufficient long-term liquidity to cover all debt maturities to early 2024. Liquidity is important in today’s uncertain times and thus the news is likely driving the Scentre share price higher.

Following the issuance, Scentre will reduce its indebtedness including borrowings under the its revolving bank facilities. Scentre will aim to make distribution in early 2021 from surplus net operating cash flows.

What now for the Scentre share price?

Scentre shareholders will be pleased with the news that regional Victoria is set to emerge from lockdown. Furthermore, as Australia and New Zealand continue to control the pandemic, the Scentre share price continues to trade at a very cheap price. In saying that, ASX shares don’t fall for no reason and investors will be expecting lower future earnings as the pandemic has hit shopping centres hard.

More reading

• Why the Cyclopharma (ASX:CYC) share price surged to record high today
• ASX 200 gender inequality lets the team down
• Why the lagging Worley (ASX:WOR) share price could be at COVID turning point
• ASX 200 down 0.8%: Fortescue (ASX:FMG) tumbles, Afterpay (ASX:APT) sinks lower
• Why De Grey, Scentre, Splitit, & Temple & Webster shares are pushing higher

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I continue to believe that the healthcare sector is a great place to invest with a long term view.

This is due to favourable industry tailwinds which look set to support demand for healthcare services for a long time to come.

While I think CSL Limited (ASX: CSL) would be a strong buy right now for this reason, it isn’t the only healthcare share to consider.

Here are two exciting ASX healthcare shares to look at:

Opthea Ltd (ASX: OPT)

Opthea is a developer of novel biologic therapies for the treatment of eye diseases. The key attraction to the company for me is the OPT-302 combination therapy which delivered very strong study results last year. If its upcoming Phase 3 trial proves just as successful, then the future could be very bright for the company.

The current standard of care treatments for wet age-related macular degeneration had sales of over US$3.7 billion in 2018. This gives it a sizeable market opportunity. In addition to this, the company is targeting diabetic macular edema (DME), which had sales of over US$6.2 billion in 2018. Though, it is worth noting that I’m not as confident that its DME trials will be as successful following some mixed phase 2a results. Another positive is that Opthea has a very strong balance sheet and appears well-funded to see OPT-302 through its trials.

PolyNovo Ltd (ASX: PNV)

Another ASX healthcare share to look at is PolyNovo. It is a growing medical device company which is marketing the increasingly popular NovoSorb technology. NovoSorb is a family of proprietary medical grade polymers that can be utilised for the manufacture of novel medical devices. These biocompatible polymers are designed to support different functions of the body and then biodegrade into by-products that can be easily absorbed and excreted.

Its NovoSorb Biodegradable Temporising Matrix (BTM) product is the one that I’m most excited about. It is a wound dressing which is designed to treat full-thickness wounds and burns. Management estimates that it currently has a sizeable $1.5 billion addressable market. However, it is looking to expand its use into other markets and sees an opportunity to take the product into the hernia and breast treatment markets. These would add a further $6 billion to its addressable market if successful.

More reading

• Bolster your portfolio with these outstanding ASX blue chip shares
• 3 retirement myths you can’t afford to believe
• Top brokers name 3 ASX shares to buy today
• Are biotech shares like Polynovo (ASX:PNV) a better buy than Afterpay?
• The best ASX blue chip shares to buy after the market selloff

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 CSL Ltd. and POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The market may be sinking lower on Thursday, but that hasn’t stopped the Zoono Group Ltd (ASX: ZNO) share price from zooming higher.

In late afternoon trade the biotech company’s shares are up 3% to $2.06.

Though, at one stage today the Zoono share price was up as much as 9% to $2.18.

Why did the Zoono share price zoom higher?

Investors were buying the company’s shares today after the release of a positive announcement before the market open.

According to the release United Airlines will be adding Zoono Microbe Shield to the airline’s safety and cleaning procedures. Zoono Microbe Shield is an EPA registered antimicrobial coating that forms a long-lasting bond with surfaces and inhibits the growth of microbes.

The airline intends to add the product to its already rigorous safety and cleaning procedures for its entire mainline and express fleet before the end of the year.

At present, United is applying the coating each week on more than 30 aircraft. This includes on seats, tray tables, armrests, overhead bins, toilets, and crew stations.

Toby Enqvist, United Airline’s Chief Customer Officer, commented: “This long-lasting, antimicrobial spray adds an extra level of protection on our aircraft to help better protect our employees and customers.”

“As part of our layered approach to safety, antimicrobials are an effective complement to our hospital-grade HEPA air filtration system, mandatory mask policy for customers and daily electrostatic spraying. We’ve overhauled our policies and procedures and continue to implement new, innovative solutions that deliver a safer onboard experience,” he added.

What impact will this have on sales?

While this has the potential to be a reasonably lucrative deal for Zoono, no details have been provided in respect to sales expectations from it.

Investors may have to wait for an update at its annual general meeting, which is expected to take place early in November.

More reading

• Redbubble (ASX:RBL) and this ASX share have more than doubled in 2020
• Zoono share price zooms higher after COVID-19 drives 944.5% increase in earnings

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Reserve Bank of Australia (RBA) has a new data collection method known as Economic and Financial Statistics (EFS) collection. Let’s take a closer look.

What is the new data available to the RBA?

The RBA is now collecting data from both bank and non-bank lenders about the interest rates charged to customers, and other data on business and household activity. This helps the RBA analyse how its policy tools are affecting the economy while gauging interest rates charged by lenders in the economy. 

What did the RBA determine using the data?

As expected, the RBA saw a sharp economic contraction as a result of the coronavirus pandemic. This led to higher unemployment and the sharpest quarterly economic contraction on record, with GDP falling 7% in the June quarter. Using the new EFS data, the RBA was able to assess how policies implemented in March affected the economy. 

RBA domestic markets head Marion Kohler said interest rates had fallen as the RBA dropped the cash rate and lenders competed for new loans. Banks dropped variable interest rates on housing loans by about 30 basis points in response to the RBA cutting its cash rate target by 50 basis points in March. Interest rates on new fixed rate housing loans have fallen by around 65 basis points since February this year.

The RBA’s EFS data revealed that interest rates on loans outstanding to small, medium sized and large sized businesses have fallen since March.

Regarding business loans, Kohler said large businesses increased borrowing around March and have repaid about 3 quarters since. This was precautionary in case the economic situation worsened. Borrowing by small to medium sized businesses saw little change. Kohler said programs such as JobKeeper and the employer cash flow boosts have likely reduced the need for credit by businesses at this time.

Applications for housing loans increased since March, EFS data revealed. This came as borrowers moved to refinance existing loans. In addition, Kohler said new applications for housing loans improved in recent months in line with increasing housing market activity after March and April lows. The EFS data showed that households were paying more into their loans in recent months, including into offset accounts. This was in line with lower household spending and more precaution by households. Some borrowers also drew down superannuation to put more funds into their offset accounts and some borrowers placed their social assistance payments into offset accounts.

Personal lending also decreased sharply in 2020, according to EFS data. This was part of a structural decline that was accelerated by the pandemic, Kohler said. She added people had borrowed less in personal loans in the last decade as they moved toward lower interest alternatives such as mortgage redraw facilities. 

Kohler said the EFS data revealed that the RBA’s policies supported the lowering of interest rates for borrowers to historic lows and supported the provision of credit.

More reading

• Unibail (ASX:URW) share price tumbles to 52-week low on reset plan announcement
• What’s moving the Scentre (ASX:SCG) share price today?
• 2 exciting ASX healthcare shares to buy for the long term
• Zoono (ASX:ZNO) share price jumps 9% on United Airlines deal
• Why the Cyclopharma (ASX:CYC) share price surged to record high today

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Cyclopharm Limited (ASX: CYC) share price continues to bask in the glory of its clinical trial announcement released earlier this week.

Shares in the diagnostic imaging technology developer surged 28.2% to a record high of $2.50 in the last hour of trade, taking its total gain to 78.6% in three days.

In contrast, the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) have lost more than 1% each at the time of writing.

Successful trial triggers Cyclopharma share price surge

Cyclopharma announced on Tuesday that the Independent Data Monitoring Efficacy Committee (DEMC) has unanimously recommended that the company’s Technegas Phase 3 trial (CYC-009) be stopped as it was a success.

This means Cyclopharma can suspend the trial. Following consultation with the US Food and Drug Administration (USFDA), the CYC‐009 study will be terminated with orderly formal site close out and notification to reviewing Investigational Review Boards.

“Given over three decades of clinical use, hundreds of clinical papers and references in practice guidelines featuring the benefits of Technegas, we were always confident of a positive outcome,” said the company’s chief executive James McBrayer.

“The recommendation handed down by the DEMC overnight Australian time validates our confidence in our Technegas technology and further de‐risks our pathway to USFDA approval to sell Technegas in the USA market in 2021.”

Poised to join prestigious ASX club

If Cyclopharma gains final USFDA approval for its lung test, which looks likely, it will join the league of other successful ASX medical device companies.

These include the Nanosonics Ltd. (ASX: NAN) share price, RESMED/IDR UNRESTR (ASX: RMD) share price and Cochlear Limited (ASX: COH) share price.

What Cyclopharma’s technology does

Cyclopharma’s Technegas technology uses very fine radioactive carbon, which is inhaled by a patient. This allows detailed images to be taken by a gamma or single photon emission computed tomography (SPECT) camera.

The technology can be used to diagnose COPD, asthma, pulmonary hypertension and certain interventional applications to include lobectomies in lung cancer and lung volume reduction surgery.

Shareholders breathing easy

The CYC‐009 clinical trial is a prospective, 240‐patient, non‐inferiority comparison against Xe‐133. The Phase 3 trial design was approved under a Special Protocol Assessment granted on 4 October 2016.

The impact of COVID-19 slowed patient recruitment and only 204 patients (or 85% of the targets number) were imaged. This prompted the USFDA to call in an independent committee to review the efficacy data.

The positive recommendation from the DEMC does not guarantee that the USFDA will give CYC-009 its final tick of approval, but this is likely as federal regulators are often guided by independent panel of experts.

More reading

• What’s moving the Scentre (ASX:SCG) share price today?
• ASX 200 gender inequality lets the team down
• Why the lagging Worley (ASX:WOR) share price could be at COVID turning point
• Why the Fortescue (ASX:FMG) share price is underperforming its peers today
• Bolster your portfolio with these outstanding ASX blue chip shares

Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and Nanosonics Limited. The Motley Fool Australia has recommended Cochlear Ltd., Nanosonics Limited, and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I am more excited about shares of WAM Microcap Limited (ASX: WMI) from today. I’m going to tell you why in this article.

A quick overview of WAM Microcap

WAM Microcap is a listed investment company (LIC) which invests in the smallest businesses on the ASX. It targets ones with market capitalisations under $300 million at the time of acquisition. It’s operated by the high-performing team at Wilson Asset Management.

Why I’m usually excited about WAM Microcap

I think WAM Microcap could be one of the best LIC investment teams at the moment. It has proven to be a very strong performer.

At 31 August 2020, the LIC reported that over the prior three months its gross portfolio performance was 26.9%, which was 20.3% better than its benchmark. Over the prior year (including the COVID-19 crash) it produced a gross return of 25.4%, which was 23.3% better than its benchmark. Since inception in June 2017, its gross return has been 21.7% per annum, 13.3% per annum better than the benchmark.

I don’t think it’s always going to produce returns of 20% per annum, but I do believe that picking small caps and the WAM investment strategy can lead to continued outperformance of the S&P/ASX 200 Index (ASX: XJO) over the long-term.

WAM Microcap can turn this strong investment return into pleasing dividends for shareholders. It has paid a special dividend, as well as growing ordinary dividends, each year since FY17 when it started paying dividends.

At the current WAM Microcap share price it offers an ordinary grossed-up dividend yield of 5.7%.

The reason I’m more bullish from today

There was a piece today in the Australian Financial Review that caught my eye. WAM Microcap recently carried out a capital raising, with some of that money planned for pre-IPO investments.

The AFR reported that WAM Microcap has invested $2.5 million into AUCloud, which is described as a sovereign cloud services provider.

The COVIDSafe app and the shift to working from home highlighted the importance of having a safe, secure service that could be trusted for government officials to use. According to the AFR, the government is thinking about restricting access to government data to local players. This could be good news for companies like AUCloud which focuses on government and important national infrastructure clients. It was referred to as an ‘infrastructure as a service’ provider.

AUCloud is supposedly going to list onto the ASX later in 2020, it’s aiming to be profitable in this financial year.

WAM lead portfolio manager Oscar Oberg said: “With all the negative press around the COVIDSAFE app – we think the issue around sovereignty is going to increase. It will be a bullish time for software providers. As a pure play company in this space – the demand for cloud providers that are Australian owned as opposed to the global behemoths like Azure or AWS, will increase. Particularity with their exposure to government departments such as defence and key industries like financial services.

“AUCloud offers the security, the compliance and they have an increased level of efficiency and productivity to their clients. They also have a successful partner channel with some of the largest software companies in the world.”

If these are the types of investments that the LIC is going to invest in, then it’s an exciting proposition. I like WAM Microcap even more than before.

Foolish takeaway

WAM Microcap does a great job of identifying opportunities that are going to produce strong returns over the medium-term. Expanding its horizon to new investment ideas is exciting and could lead to more strong returns if the IPOs go quite well.

These pre-IPO ideas are not accessible to regular investors, so WAM Microcap could be a nice way to indirectly benefit from that as well as with other opportunities like institutional capital raisings. Sure, its management fees are higher than a cheap exchange-traded fund (ETF), but the net returns from WAM Microcap have been stronger than most ETFs – which make the fees more than acceptable.

I’d be happy to buy at this WAM Microcap share price because it’s probably trading close to its pre-tax net tangible assets (NTA), which is a fair price.

More reading

• 3 retirement myths you can’t afford to believe
• Is the new WAM Alternative Assets LIC a buy?
• 3 ASX dividend shares I’d buy with $3,000 today
• 3 ASX shares for beginners to buy
• 2 ASX shares I’d buy with $750 right now

Motley Fool contributor Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There certainly are a large number of growth shares for investors to choose from on the Australian share market.

Two which I think are among the best on offer right now are named below. Here’s why I would invest $2,000 into these fantastic growth shares:

NEXTDC Ltd (ASX: NXT)

The first ASX growth share to consider buying is this innovative data centre-as-a-service provider. I’ve been very impressed with the way NEXTDC has been growing in recent times. For example, over the last four years the company’s customer numbers have grown at a compound annual growth rate (CAGR) of 21%. This has been driven by the seismic shift to the cloud, which is driving very strong demand for data centre capacity.

Pleasingly, the company isn’t just growing its customer numbers, its customers are using more and more of its services. Over the same period, its interconnections have grown at a CAGR of 31%. The catalyst for this has been increasing use of hybrid cloud and connectivity inside and outside its data centres due to customers expanding their ecosystems. The good news is that the shift to the cloud is still only getting started. I believe this leaves NEXTDC well-positioned to deliver strong earnings growth over the next decade. 

Xero Limited (ASX: XRO)

Another fantastic ASX growth share to consider buying is Xero. Although this cloud accounting and business software company had a sizeable 2.38 million subscribers at the last count, I still believe this figure can rise materially in the future. This is due to the relatively modest market share that cloud-based providers have at present. Despite the overwhelming benefits of cloud-based accounting software, the company estimates that less than 20% of the global English-speaking target market has made the shift.

I expect more and more businesses to make the switch in the coming years, which should underpin solid subscriber growth. Combined with price increases, its high retention rate, and the benefits of scale, I expect this to lead to above-average earnings growth over the 2020s.

More reading

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• Is the NEXTDC share price heading even higher from here?

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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