I think there are plenty of investment opportunities with ASX shares right now with $20,000.

Regular readers would know that one of my favourite ideas over recent weeks has been Citadel Group Ltd (ASX: CGL), which has just received a large takeover offer. It would have been a pick today for me at last week’s prices.

Now that Citadel isn’t really an option, I think these top ASX growth shares could be worth buying instead:

Pushpay Holdings Ltd (ASX: PPH) – $8,000

Pushpay is an electronic donation payment business. It facilitates digital donations to sectors such as the large and medium church sector in the US.

Management believe there is a large, long-term opportunity, the company is aiming for annual revenue of US$1 billion per year. It has plenty of growth potential because in FY20 it ‘only’ generated US$129.6 million of revenue (up 32% from the prior year) with the huge level of donations given to churches each year. 

I think it’s the ASX shares with long-term revenue growth potential and rising profit margins that are likely to deliver outsized returns to investors.

Pushpay is very scalable. Over the 12 months of FY20 it grew its gross profit margin from 60% to 65%. That suggests its gross profit margin could be materially higher as it reaches milestones like US$250 million and US$500 million of revenue.

As a long-term bonus, the ASX share could grow into new countries or new industries (such as other religions) to further increase its addressable market in the future.

At the current Pushpay share price it’s trading at 33x FY21’s estimated earnings. I don’t think the market yet appreciates how much Pushpay’s profit could grow over the next five years.

Bubs Australia Ltd (ASX: BUB) – $5,000

Bubs is a business that could really take off if it manages to capture good market share of the infant formula market in Asia.

The company produces and sells a variety of nutritional products, with a focus on goat milk items like infant formula.

The FY20 result was solid from the ASX share with full year revenue growth of 32% to $62 million, infant formula sales increasing by 58% to $30 million, direct Chinese sales growing by 32% to $13 million and the normalised gross margin improving from 21% to 24%.

What particularly impressed me was that export revenue outside of China grew by five times, and represented 10% of total revenue.

China is a higher-risk country for consumer product exporters at the moment – just look at what’s happening with Treasury Wine Estates Ltd (ASX: TWE). Shifting to China-made Bubs products could be a way to de-risk its Chinese division whilst still reaching Chinese customers. I like the move to buy a stake in the Beingmate Chinese manufacturing facility.

However, I would feel (even) better about Bubs if it can grow its ex-China export revenue, as places like Vietnam are large markets that the ASX share can tap into, with less regulatory risk.

In five years I think Bubs could be a much bigger business. At the current Bubs share price of $0.79, I think the potential rewards are worth the risks.

City Chic Collective Ltd (ASX: CCX) – $7,000

I think City Chic has proven itself to be a formidable ASX retail share during this COVID-19 period.

The company managed to grow revenue by 31% to $194.5 million during FY20 thanks to its strategy of having a strong online offering as well as its targeted acquisitions.

City Chic, which is a retailer of plus-size women’s apparel, accessories and footwear, saw online website growth of 113.5% over FY20. Online sales made up 65% of total sales, compared to 44% in FY19. I think this shows the business can thrive in the 2020s despite COVID-19 impacts and the disruption caused by store closures.

US retail is having a tough time at the moment. So it’s a great time for City Chic to use its capital raising money to buy competitors at cheap prices and turn them into online-only offerings by utilising City Chic’s e-commerce abilities. Online sales also come with lower operating costs. 

At the current City Chic share price it’s trading at 22x FY22’s estimated earnings. I think that looks very reasonable. I think it could generate good shareholder returns over the shorter-term and longer-term, particularly as it could start paying a good dividend by FY22.

More reading

• Buy and hold these stellar ASX growth shares for 10 years
• Citadel (ASX:CGL) share price rockets 39% higher on $450 million takeover offer
• 3 ASX shares for beginners to buy
• Buy these ASX growth shares after the market selloff
• 3 personal finance tips to help strong investing

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 PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO and Treasury Wine Estates Limited. The Motley Fool Australia has recommended Citadel Group Ltd and PUSHPAY FPO NZX. 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 Federal Court has ordered two wealth management businesses in National Australia Bank Ltd (ASX: NAB) to pay $57.5 million penalties.

The court found MLC Nominees and NULIS had contravened fees-for-no-service laws.

The breaches included making false and misleading communications to superannuation members about how the bank charges fees and when the clients are obliged to pay it.

The NAB businesses were also found to have failed to ensure their services were provided “efficiently, honestly and fairly”.

MLC Nominees will pay a $49.5 million penalty while NULIS was fined $8 million. 

The Motley Fool has contacted NAB for comment.

Biggest ever penalty

The massive penalty is the largest ever imposed in a case started by the Australian Securities and Investments Commission (ASIC).

“Fees-for-no-service conduct is particularly egregious, having resulted in substantial financial loss for thousands of unsuspecting consumers,” said ASIC deputy chair Daniel Crennan QC.

“The penalty imposed by the court reflects the very serious contraventions by MLC Nominees and NULIS.”

MLC Nominees and NULIS both admitted liability, with the judge taking the confession into account in determining the fine.

How much were clients ripped off?

MLC Nominees grabbed $33.6 million in fees from about 220,000 members of MasterKey Business Super and MasterKey Personal Super who didn’t even have a financial advisor. 

This went on for almost 4 years between 2012 and 2016.

MLC Nominees and NULIS also deducted about $71.9 million in fees off roughly 457,000 MasterKey Personal Super customers who did have an advisor but received no service.

That money spinner endured for more than 6 years from 2012 to 2018.

Justice Yates described the breaches as “very serious” and set the fines to match the large scale of the businesses.

The legal action started in September 2018, before the Royal Commission into the finance industry had started. However, NULIS’ behaviour was a case study during the famous enquiry.

More reading

• ASX 200 up 0.4%: Macquarie guidance disappoints, Cleanaway sinks on CEO behaviour reports
• Afterpay (ASX:APT) share price facing new competitive pressure
• Is the Zip (ASX:Z1P) share price a buy in the tech crash?
• Tech shares lead ASX rebound but Afterpay (ASX:APT) faces mounting competition
• ASX 200 up 0.7%: Nearmap (ASX:NEA) launches capital raising, Afterpay (ASX:APT) rebounds

Motley Fool contributor Tony Yoo 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 Flexigroup Limited (ASX: FXL) share price has been relatively stagnant today, despite an announcement about the launch of its ‘humm’ product in the New Zealand market.

The Flexigroup share price reached an intra-day high of $1.12 before closing at $1.09, up 0.9% for the day.

What does Flexigroup do?

Flexigroup is a diversified financial services group. It provides a range of innovative finance products to consumers and businesses through a large partner network. The buy now, pay later (BNPL) company currently services 2.2 million customers.

Humm landing in New Zealand

Flexigroup advised the market it has launched its humm product in New Zealand, following the success of its BNPL brand Oxipay. Through humm, the BNPL company is the first to offer terms of up to NZ$10,000 and is targeting new market segments.

The larger transactions are expected to help Kiwis with purchases such as solar, home furnishing, renovations, luxury retailing, fertility and healthcare. Flexigroup advised that retailers such as VIVO, The Cosmetic Clinic, Insulmax, MyBed, Beaurepaires and others will join the 2,400 businesses that are on the existing roster.

The launch of humm replaces Oxipay as Flexgroup’s BNPL brand in New Zealand. The company will migrate its existing customer database and distribution network to humm.

As the company seeks to unify all products, a name change will be put to a shareholder vote at the FY20 annual general meeting later this year.

Management commentary

Flexigroup New Zealand CEO and deputy group CEO Chris Lamers was enthusiastic about the new prospects on offer:

Our customers told us they love BNPL but were frustrated they couldn’t use it for purchases more than NZD1,000, or extend the payment terms. humm solves that problem. As well as meeting the needs of our current customers, it will appeal to families and homeowners more than traditional BNPL does. We have also made significant investments in our technology to ensure it provides the simplicity and functionality our retail partners need to drive sales and attract new customers.

Flexigroup CEO Rebecca James added that there is no other product in New Zealand that offers the same level of purchasing power and flexibility:

Humm was designed with a clearly differentiated proposition of financing larger transactions above NZ$1,000. While we are strongly leveraging our eCommerce capabilities, we are also focused on building and solidifying our in-store network for larger purchases, a key strength of humm which is difficult to replicate.

About the Flexigroup share price

The Flexigroup share price has not seen the same skyrocketing performance as some of the other BNPL players such as Afterpay Ltd(ASX: APT) and Zip Co Ltd (ASX: Z1P). Instead, it has steadily declined since 2013, losing almost 80%.

However things appear to be turning around. The Flexigroup share price has started to gain ground recently, up 286% from its 52-week low of 38 cents in March this year.

More reading

• How this new red tape could send the Afterpay share price tumbling
• Why Cleanaway, De Grey, Macquarie, & Zip shares are dropping lower
• Here are the 10 most shorted ASX shares
• How to position your ASX share portfolio for a downturn
• Is another stock market crash coming?

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended FlexiGroup Limited. 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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Are you looking to add some growth shares to your portfolio this week? Then you might want to consider buying the ones listed below.

I believe all three have the potential to deliver strong earnings growth over the next decade, which could make them long term market beaters.

Here’s why I would buy and hold these ASX growth shares for at least 10 years:

Bravura Solutions Ltd (ASX: BVS)

The first ASX growth share to consider buying is Bravura. The shares of the provider of software products and services to the wealth management and funds administration industries have come under pressure recently following its subdued guidance for FY 2021. While the warning that its earnings could be flat in FY 2021 because of the pandemic was disappointing, I believe the share price weakness has been severely overdone. Especially given its portfolio of quality software solutions, strong recurring revenues, massive market opportunity, and strong long term growth potential. I think these make the Bravura share price great value at under 20x earnings.

Kogan.com Ltd (ASX: KGN)

Another ASX growth share I would consider buying is this ecommerce company. The Kogan share price has been an exceptionally strong performer in 2020. And while this means it isn’t the bargain buy that it was a few months ago, I still see value in its shares for long term investors. I believe Kogan is well-placed to continue its strong sales and earnings growth over the next decade thanks to the growing popularity of its website, more spending online, and its acquisition opportunities.

Pushpay Holdings Group Ltd (ASX: PPH)

A third ASX growth share to buy is Pushpay. I think the fast-growing donor management platform provider for the faith sector is one of the best options on the share market right now. This is due to its leadership position in a niche but very lucrative market. In FY 2021 Pushpay expects to more than double its operating earnings once again. Pleasingly, I don’t expect its rapid growth to end any time soon. Nor does management. It is targeting a 50% share of the medium to large church market in the future. This represents a US$1 billion opportunity and compares to FY 2020’s revenue of US$127.5 million.

More reading

• Where I’d invest $20,000 into ASX shares right now
• Leading brokers name 3 ASX shares to buy today
• Forget day trading and get rich with these top ASX shares
• Buy these ASX growth shares after the market selloff
• 3 personal finance tips to help strong investing

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 Kogan.com ltd and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Bravura Solutions Ltd. The Motley Fool Australia has recommended Kogan.com ltd and PUSHPAY FPO NZX. 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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A dividend yield of 6.45% is rare on the ASX share market these days. Very rare indeed. Some of the big four ASX bank shares used to offer dividend yields in this ballpark. But that was before 2020 pummeled the global banking sector. Today, you’d be lucky to get a 3% yield from a bank share.

Even an exchange-traded fund (ETF) which focuses on holding the ASX’s best dividend shares can’t match this yield. The Vanguard Australian Shares High Yield ETF (ASX: VHY) currently anticipates a 3.3% forward dividend, as an example.

So where would we find this monstrous 6.45% yield today? The iShares J.P. Morgan USD Emerging Markets Bond ETF (ASX: IHEB), that’s where.

This ETF is a little different as it actually doesn’t hold shares at all. Instead, this fund holds fixed-interest investments instead, otherwise known as bonds.

Now, I’ve made my views on the role of bonds in a 2020 portfolio clear in previous articles. Long story short, I have said investors should avoid holding bonds for almost any reason in 2020.

But the bonds that I was discussing then are government bonds issued by the Australian Government. The bonds that IHEB holds are a whole different kettle of fish.

Bond vs bond

IHEB also holds a collection of government bonds. But instead of being issued by governments of advanced economies like Australia or the United States, IHEB holds bonds from governments in ’emerging markets’ countries. The top issuers of the bonds held in this ETF are instead from Uruguay, Russia, Argentina, Peru, Kuwait and Ecuador, among others.

These kinds of countries are not viewed as ‘safe’ as a country like Australia or the US for investing purposes, even if they are priced in US dollars. Thus, these bonds don’t benefit from the ‘risk-free’ perception that Australia and the US enjoy. While that does mean investors get to enjoy far higher interest rates on their loaned capital, it also increases the risk for that investor.

For example, it’s unthinkable to us Aussies that our government could ‘default’ on its debt, which has never occurred anyway. That makes lending money to the government a very sleep-friendly activity. But take Argentina instead. This is a country that has defaulted on its sovereign debt multiple times of the past 100 years. And when a borrower defaults, it’s not good news for the creditor.

That explains why an ETF tracking Australian government bonds like the Vanguard Australian Government Bond Index ETF (ASX: VGB) currently offers a running yield of 2.78%, wheres IHEB is offering 6.45%.

Should you ignore a 6.45% yield?

Whilst I think IHEB is an interesting option to consider for dividend income, I think investors should be very cautious with this investment. There’s a small chance that any of the countries that issue the bonds that make up this ETF could default on their debts or otherwise have other difficulties funding their bond obligations. And that could in turn result in a permanent capital loss.

If income is an important investing objective of your portfolio, I think there’s a good case for a small allocation to this ETF. But I wouldn’t be putting any capital in that you can’t afford to lose either.

More reading

• Why ASX income investors need to consider these dividend ETFs in 2020
• 2 ASX ETFs that can solve your income needs
• Forget Westpac’s term deposits and buy these ASX dividend shares
• How to earn a passive income of $50,000 with ASX dividend shares
• 2 quality ASX dividend shares for income investors to buy today

Motley Fool contributor Sebastian Bowen owns shares of Vanguard Australian Shares High Yield Etf. 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 Ecograf Ltd (ASX: EGR) share price soared higher today. Shares were up a phenomenal 51% by the closing bell after hitting intraday gains of more than 75%.

Today’s big surge puts the battery material supplier’s share price well into the green in 2020, up 56% since 2 January. For comparison the All Ordinaries Index (ASX: XAO) is down 11% year-to-date.

That’s a remarkable gain for Ecograf’s share price, considering it wasn’t spared the carnage that ensnared most ASX shares following the COVID-19 panic selling. From 31 January through to 2 April the share price tumbled 67%. Since that low shares are up 317%, owing much to today’s big bounce.

At the current price of 12 cents per share, Ecograf has a market cap of $43 million.

What does Ecograf do?

Ecograf aims to become a key player in supplying environmentally friendly natural flake and battery (spherical) graphite products to its customers. Those include the established (refractory, recarburiser, lubricant) and the emerging (lithium-ion battery) global markets.

EcoGraf plans to operate a diversified graphite portfolio, supplying high-quality Tanzanian natural flake graphite products. Working with TanzGraphite, Ecograf is targeting established markets in Asia and Europe. The company’s multi-hub development is commencing in Kwinana, Western Australia to supply environmentally responsible battery graphite for lithium-ion batteries.

How did Ecograf respond to the ASX query?

When a company’s share price rises at a blistering pace, the ASX tends to take notice. Today it requested an explanation from Ecograf in the form of a price query.

The company promptly responded, stating, “EGR is not aware of any information concerning it that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities.”

So is there any other reason that Ecograf’s share price may have shot higher today, alongside a large surge in the volume of shares traded?

According to Ecograf: “EGR notes an improved sentiment for battery mineral markets as increased production of electric vehicles and lithium-ion batteries are considered a key support for global COVID-19 economic recovery plans.”

The company also mentioned the Aussie government’s increased focus to secure supplies of critical resources, like battery graphite, outside of China. It also stated: “EGR notes today’s articles from the Age and the Sydney Morning Herald that reflect this sentiment and quote EGR’s Managing Director, Andrew Spinks.”

Ecograf had no other explanation and noted that improved sentiment was beyond its control.

Following today’s 51% leap, the Ecograf share price will be one to watch.

More reading

• Where I’d invest $20,000 into ASX shares right now
• NAB penalised $57.5 million for ripping off customers
• Flexigroup launches humm in New Zealand
• Buy and hold these stellar ASX growth shares for 10 years
• This fixed-interest ETF offers a 6.45% dividend yield

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 Mayne Pharma Group Ltd (ASX: MYX) share price is leaping higher today, up 7.58% in late afternoon trading.

This will come as welcome news to shareholders who saw Maybe Pharma’s share price fall 11% in the 4 days following the release of its full year 2020 financial results on 21 August. Investors sold off shares after the company reported a 13% fall in revenue and a net loss after tax of $93 million.

Mayne Pharma’s share price, like most shares on the ASX, was savaged during the COVID-19 panic selling earlier this year, falling 59% from 20 January through to the low on 19 March. Since that low, the Mayne Pharma share price has rebounded to gain 74%. Year-to-date it’s down 23%.

By contrast the All Ordinaries Index (ASX: XAO) is down 11% in 2020.

At the current price of 36 cents per share, Mayne Pharma has a market cap of $596 million.

What does Mayne Pharma do?

Mayne Pharma Group is a technology driven pharmaceutical company. It applies its drug delivery expertise to commercialise branded and generic pharmaceuticals with expertise in formulating complex oral and topical dose forms. The company also provides contract development and manufacturing services to more than 100 clients worldwide.

Mayne Pharma has product development and manufacturing facilities in Salisbury, Australia and Greenville, North Carolina in the United States. The company has a global reach through its distribution partners in Australia, North America, Europe and Asia.

Mayne Pharma shares first traded on the ASX in 2007.

Why is the Mayne Pharma share price up today?

The Mayne Pharma share price is surging today on no major breaking news.

Large daily share price swings aren’t all that unusual for Mayne Pharma. Today’s surge is likely due to several factors.

Following the recent selloff, investors are seeing value at the company’s current share price. While its revenues were down over FY19, its international sales grew 4% year-on-year.

Investors may also be buying shares ahead of any news on Mayne Pharma’s Nextstellis contraceptive product. The company has already received US FDA filing acceptance and is in the process of completing the licensing procedures in the US and here in Australia.

With other projects in the pipeline also progressing, today’s share price rise could indicate good news to come. Or, at least, expectations thereof.

More reading

• Auscann (ASX:AC8) share price up 6% on phase I study results
• How the China rift could spur these ASX tech share prices to new records
• ASX 200 Weekly Wrap: ASX 200 hits 4 straight weeks of losses
• Why the Retail Food Group (ASX:RFG) share price is up 4%
• Myer (ASX:MYR) share price dives 15% as FY20 results fail to impress

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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I think there are a few ASX shares that would definitely be worth buying if there’s another crash.

The COVID-19 crash during March was a great opportunity to buy businesses at much cheaper prices. Just look at how much shares like Afterpay Ltd (ASX: APT), Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW) have risen since March.

There are some ASX shares that I’ve got my eye on in-case there’s another crash:

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical is one of the most promising listed fund managers in my opinion. It’s one of the few managers consistently growing funds under management (FUM). Magellan Financial Group Ltd (ASX: MFG) is a great manager, but its market cap is around 20 times bigger than Australian Ethical. I think the ethically-focused manager has more growth potential.

FY20 was a solid year with Australian Ethical’s funds under management (FUM) rising by 19% to $4.05 billion with net inflows of $660 million (doubling compared to FY19). Excluding performance fees, revenue and underlying profit after tax (UPAT) both rose by 15%. Reported net profit grew by 46% to $9.5 million.

What I find particularly attractive about the ASX share is that it is a superannuation provider. Superannuation FUM has a lot of growth potential due to the mandatory contributions and the tax advantages.

Fund managers are very scalable businesses. Once the foundations are set up, most of the new FUM just adds to profit. Occasionally Australian Ethical may need to add a few more employees, but more FUM should allow it to grow profit and occasionally cut fees which will help grow FUM even faster.

Australian Ethical’s balance sheet is in a strong position. It has no debt and it had $21.4 million of cash at the end of FY20.

I like that the company is steadily growing its dividend. In FY20 it grew its dividend by 20% to 6 cents per share, including a special performance fee dividend of 1 cent per share.

Altium Limited (ASX: ALU)

Altium is one of the highest-quality ASX shares in my opinion. It has long-term focused management with an aim of being the clear number one electronic PCB software business in the world.

The ASX share has already won over many of the world’s best businesses as clients like Space X, Apple, Microsoft, Google, Disney, Tesla, John Deere and so on.

Altium has a strong balance sheet with no debt. Its cash balance grew by 16% to US$93 million, which is the best way to keep the business strong during this difficult period.

I thought it was a good sign for future profit growth that Altium grew its subscription base by 17% to 51,006 in FY20 with a 15% increase in new Altium Designer seats sold to 9,251.

The ASX share is committed to regularly updating its software for users, which is an attractive proposition if it’s constantly improving. Subscribers are more likely to upgrade to Altium 365 – the cloud offering – if people think it’s the best and will keep getting better.

Altium expenses all of its research and development. This is good and means Altium’s valuation isn’t as crazy compared to other businesses which have high levels of depreciation and amortisation that spread out the expense over multiple years.

The ASX share is steadily growing its dividend for investors. Long-term investors are now getting a solid yield on their original cost. However, at the current Altium share price it only offers a starting dividend yield of 1.2%.

It’s currently trading at 52x FY22’s estimated earnings.

Foolish takeaway

I think both of these ASX shares are very high-quality and worth being in a portfolio. However, despite falling in recent weeks, both are still quite pricey. I’d be more happy to buy both Altium and Australian Ethical shares if they fell another 10%.

More reading

• 4 of the best ASX 200 shares to buy in September
• Is the Altium (ASX:ALU) share price a strong buy?
• Could these exciting small cap tech shares be the next Afterpay (ASX:APT) and Altium (ASX:ALU)?
• Should you buy these beaten down ASX 200 shares?
• 3 outstanding ASX shares to buy and hold for decades

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd., Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Australian Ethical Investment Ltd., Kogan.com ltd, and Temple & Webster Group Ltd. 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 Sezzle Inc (ASX: SZL) share price has fallen 45.28% in the last 2 weeks. It closed today at $5.86 after trading at $10.27 only 2 weeks ago. This comes as the buy now, pay later (BNPL) sector sees investor enthusiasm moderating.

Why is the Sezzle share price falling

The Sezzle share price has fallen in line with the rest of the BNPL sector which boomed to new highs before dropping recently as investors exited the ‘overvalued’ sector.

While the company’s share price has now fallen significantly from its high of $11.83 last month, it is still up 238.55% since the beginning of the year when investors crowded to buy into BNPL companies. This trend appears to be turning around as investors start to see that the sector could be overinflated relative to future earnings of companies that offer BNPL services.

Investors are also concerned about competition, with payments giant PayPal recently announcing it was entering the sector. It may be hard for Sezzle and other buy now pay later providers to compete with PayPal’s existing size and customer reach and this may concern investors.

In August, Sezzle released record results for the half year to 30 June 2020. Underlying merchant sales rose 338% year on year to $445.20 and total income rose 384% year on year to $30.1 million. Merchant fees increased 390% year on year in the half year to 30 June 2020. Sezzle had 1.5 million active consumers on its platform at 30 June 2020 and 16,112 active merchants.

In August, Sezzle announced that it had raised $7.2 million through a securities purchase plan at a price of $5.30 per share. This followed an institutional placement in July through which Sezzle raised $79.1 million at $5.30 per share. 

In July, Sezzle announced a partnership with Plaid to allow US customers to link their bank accounts to the Sezzle platform. 

About the Sezzle share price

The Sezzle share price is up 1505.71% since its 52-week low of 35 cents and up 238.55% since the beginning of the year. The Sezzle share price is up 178.85% since this time last year.

More reading

• Are higher P/E ratios really here to stay?
• 3 exotic ASX tech ETFs you might want to add to your portfolio today
• Why the Afterpay (ASX:APT) and Sezzle (ASX:SZL) share prices are falling again today
• Tech shares lead ASX rebound but Afterpay (ASX:APT) faces mounting competition
• Why the Laybuy (ASX:LBY) share price is tanking today

Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia has recommended Sezzle 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 love ASX shares that offer investors both growth and income prospects. Both are equally important when it comes to total shareholder returns. Yet some investors prefer growth over income or vice versa. I’m not so picky, and as such if a company is offering good growth prospects with a growing income stream on the side, I’ll be interested. So here are 2 ASX shares that I believe offer just that this week.

MFF Capital Investments Ltd (ASX: MFF)

MFF is a Listed Investment Company (LIC) and one of my favourite companies on the ASX. As a LIC, MFF invests in a portfolio of other shares on behalf of its owners. In MFF’s case, these shares are usually located in the United States. It currently holds a portfolio of growth-orientated companies, the largest of which are US payments giants Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA). Other holdings (as of 31 August) include Home Depot Inc (NYSE: HD), Berkshire Hathaway Inc (NYSE: BRK.B) and Microsoft Corporation (NASDAQ: MSFT).

MFF is a growth-focused LIC at its core. But it has also recently beefed up its income chops. MFF has been paying a small but growing dividend over the past few years. It will be paying a 3 cents per share dividend in November, up from the 2.5 cents per share that was paid out in MFF’s 2020 interim dividend. If MFF pays out 6 cents per share in dividends in FY21, it gives MFF shares a forward dividend yield of 2.32% on current pricing. But it gets better. In its 2020 earnings report, MFF’ management declared that they intend to increase MFF’s annual dividend to 10 cents per share over the next few years. That would equate to a forward yield of 3.86%. As such, I think this is a top share for both growth and income today.

iShares Global 100 ETF (ASX: IOO)

Our second ASX share for growth and income is this exchange-traded fund (ETF) from BlackRock’s iShares. IOO holds 100 of the largest companies across the advanced economies of the world. You’ll find all of the big American companies here like Apple Inc. (NASDAQ: AAPL), Facebook, Inc. (NASDAQ: FB) and Amazon.com, Inc. (NASDAQ: AMZN), as well as some other names like Nestle and Toyota that you might be familiar with.

IOO has been a solid performer over the past decade, delivering an average return of 13.1% per annum. But IOO is also a solid income share. It currently offers a trailing yield of 1.56%, which should rise next year when the worst of the pandemic is behind us, in my opinion. As a rock-solid investment that offers growth, income and stability, I think IOO is a great option to consider.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Facebook, Magellan Flagship Fund Ltd, Mastercard, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Berkshire Hathaway (B shares), Facebook, Mastercard, Microsoft, and Visa and recommends the following options: long January 2022 $1920 calls on Amazon, short January 2021 $200 puts on Berkshire Hathaway (B shares), short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, short September 2020 $200 calls on Berkshire Hathaway (B shares), long January 2021 $200 calls on Berkshire Hathaway (B shares), and long January 2021 $85 calls on Microsoft. The Motley Fool Australia has recommended Amazon, Apple, Berkshire Hathaway (B shares), Facebook, and Mastercard. 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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