The S&P/ASX 200 Index (ASX: XJO) went up 0.5% today to 6,161 points.

It was another busy day for ASX 200 share reporting today:

Bingo Industries Ltd (ASX: BIN)

Bingo announced its FY20 result today. The Bingo share price went up 13%.

It said that underlying revenue rose by 21% to $486.7 million.

The underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 40.8% to $152.1 million. The underlying EBITDA margin improved by 440 basis points to 31.3%.

Operating free cashflow rose by 37.4% to $160.1 million.

Statutory net profit after tax (NPAT) rose by 196% to $66 million and statutory earnings per share (EPS) went up 159% to 10.1 cents.

Bingo’s board decided that the final FY20 dividend would be 1.5 cents per share, bringing the annual dividend to 3.7 cents per share, almost the same as last year’s 3.72 cents per share.

The company has seen momentum continue into FY21, however COVID-19 impacts may cause some disruption. But, infrastructure activity is expected to remain strong for the foreseeable future.

In order to maintain and grow volumes, Bingo expects the group EBITDA margin to decline by 200 basis points to 300 basis points, before rebounding to its longer term target of 30%.

It was the best performer in the ASX 200.

Ansell Limited (ASX: ANN)

Glovemaker business Ansell also reported its FY20 result today. The Ansell share price dropped 2%.

Ansell sales increased by 7.7% to US$1.6 billion with healthcare organic growth of 13.4% due to COVID-19 related demand – particularly for exam and single use products.

The business reported adjusted earnings before interest and tax (EBIT) rose by 8.3% year on year to US$219.7 million. Adjusted profit rose by 5.2% to US$158.7 million and EPS rose by 9.2% to US$1.218.

Ansell’s board increased its full year dividend by 7% to US$0.50 per share, up 7% compared to FY19.

In FY21 the company is expecting continuing strong demand for the exam and single use industry, though this is likely to result in increased costs. These costs are expected to be recovered, but it is likely to mean that the EBIT margin will be negatively impacted.

FY21 EPS is expected to be in the range of US$1.26 to US$1.38. This guidance reflects the uncertainties relating to raw materials, foreign exchange, the ability to increase prices and the ability to increase supply of needed products.

Blackmores Limited (ASX: BKL)

The Blackmores share price fell by 5.6% today after reporting its FY20 result, it was one of the worst performers in the ASX 200.

Blackmores saw FY20 revenue drop by 3% to $568 million, with international revenue growth of 30% on the prior year. However, Australian sales fell by 15% to $227 million driven by lower sales from Chinese led demand.

Blackmores China sales – which represents export accounts and in-country sales – dropped 16% to $103 million. The export business, impacted by regulatory changes and price discounting, was down 30% on the prior year.

Blackmores said that its EBITDA dropped by 42% to $50.7 million and EBIT dropped 61.6% to $29.4 million.

Profit after tax from continuing operations fell 68.3% to $16 million.

The ASX 200 share’s board decided not to pay a dividend due to COVID-19 uncertainty.

In FY21 the company is expecting full year profit growth in FY21 despite the additional cost variances which will arise from the first full year of Braeside manufacturing ownership. That profit growth is expected to largely come in the second half of the financial year. Due to COVID-19 uncertainties the company decided not to give full year FY21 guidance.

Blackmores believes it has taken the steps needed to rebuild. It has simplified its operating model, which should lead the company back to sustainable profit growth and restore future dividends.

More reading

• Afterpay share price leaps 7% today after 3 broker upgrades
• The latest ASX stocks that brokers just upgraded to “buy”
• Bingo Industries share price surges on 196% boost in profit
• Why Blackmores, MNF Group, Nanosonics, & Seven West Media are dropping lower
• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition

The post ASX 200 rises, Bingo jumps after reporting appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Qp0ss9

The Webjet Limited (ASX: WEB) share price gained 4.2% today. That’s enough to deliver shareholders over a 31% gain so far in August.

Webjet’s share price has now rebounded 64% from this year’s April 23 low. But that rebound has a long way to go before the company recovers from the massive hit it took as COVID-19 saw domestic and international travel grind to a virtual halt.

Despite the recent strong performance, year-to-date Webjet’s share price is still down 61%.

Webjet is an S&P/ASX 200 (INDEXASX: XJO) listed company. By comparison the ASX 200 is down 8% since January 2.

What does Webjet do?

Headquartered in Melbourne, Webjet is a digital focused travel agency operating in Australia and New Zealand, with customers across global consumer and wholesale markets.

Webjet’s business consists of a B2C division comprising the Webjet, Online Republic brands and WebBeds, and a B2B division comprising the Lots of Hotels and Sunhotels brands and FIT Ruums. The company’s operations are primarily online/technology-based.

Webjet shares first listed on the ASX in 1997.

What’s behind Webjet’s 31% share price leap in August?

Webjet’s 31% share price gains in August so far are even more remarkable when you take into account the company’s 11% loss last Thursday.

That loss followed on from the release of Webjet’s FY20 results, reporting a $143.6 million full-year loss.

Since Thursday’s close Webjet’s share price has rebounded 15%. That — and today’s 4.2% share price gains — will come as sour news to the legion of investors betting against the company.

Yesterday, Webjet led the pack of most shorted shares on the ASX with a short interest of 13.1%. That tells me that some short covering — when investors buy back shares they’ve sold short to escape increasing losses when share prices move higher — is likely responsible for some of today’s gains.

As for Webjet’s 31% share price gain since the beginning of August, this follows the trend of investors looking beyond the viral global shutdowns and towards the reopening of national and international travel. A trend that’s also seen big share price gains in August for companies like Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT).

When borders do fully reopen, it’s the well-managed but still beaten down stocks in the travel and leisure industries that could offer some of the biggest share price gains.

More reading

• Are Webjet and other ASX travel shares taking off?
• These are the 10 most shorted shares on the ASX
• ASX 200 down 0.8%, IDP Education soars
• Webjet share price crashes 12% lower: Is it time to buy?
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group 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.

The post Today’s strong performance sees Webjet’s share price leap 31% so far in August appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2YuHTau

Are you looking for a source of income in this low interest rate environment? Then check out the two ASX shares listed below.

Both offer investors generous dividend yields that smash the interest rates on offer with term deposits. Here’s why I like them:

Aventus Group (ASX: AVN)

The first ASX dividend share I would suggest income investors consider buying is Aventus. The retail property company’s shares have come under significant pressure this year because of the pandemic. However, I believe this selloff has been largely unwarranted due to its focus on large format retail parks and its reasonably high rental income weighting towards everyday needs.

For example, this morning Aventus released its full year results and revealed a 4.2% increase in funds from operations (FFO) to $100 million. It also reported solid rent collection of 87% through the COVID-19 period and a high occupancy rate of 98%. This is thanks to its blue chip tenant base which includes the likes of The Good Guys, ALDI, Bunnings, and Harvey Norman Holdings Limited (ASX: HVN). It also declared total distributions of 11.9 cents per security in FY 2020. Based on the current Aventus share price, this equates to a generous 5.3% yield.

BHP Group Ltd (ASX: BHP)

Another dividend share to consider buying is BHP. I believe the mining giant would be a great addition for investors that are not averse to investing in the resources sector. As well as offering a portfolio some added diversity, I believe it also provides solid potential returns for investors over the coming years.

This is thanks to BHP’s world class operations, its low costs, favourable commodity prices, and growth opportunities. In respect to commodity prices, the iron ore price is currently trading beyond US$120 a tonne. At this level BHP is generating material free cash flows from its Pilbara iron ore operations. This should put it in a position to deliver another generous dividend payment in FY 2021. Based on the current BHP share price, I estimate that it offers a forward fully franked ~5% dividend yield.

More reading

• The latest ASX stocks that brokers just upgraded to “buy”
• What are dividend shares and how do you find them?
• Aventus share price wobbles despite solid FY20 results
• Here are the highlights of this ASX reporting season
• ASX 200 Weekly Wrap: Blue chips, earnings drag ASX lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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.

The post Forget term deposits and buy these quality ASX income shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3jbkYc9

It has been a very interesting year for shareholders in all industries.  Market shocks and rebounds have become the norm in 2020.

The Macquarie Group Ltd (ASX: MQG) share price has been no different. It fell to as low as $70.45 in March and has now recovered to $128.96 (at the time of writing). So the question I was asked recently was: Can the Macquarie share price hit the $200 mark?

Macquarie share price at a glance

Valued at $47.47 billion, Macquarie is Australia’s fifth largest company on the ASX by market capitalisation.  The company specialises in global banking, financial, advisory, investment and fund management services.

Over the past few years, Macquarie has further diversified its business model, providing protection against future recessions.  It’s strong capital position and robust risk management framework has contributed to the company’s 51-year record of unbroken profitability.

The economic outlook

The uncertain economic environment resulting from the coronavirus pandemic has certainly cast an unclear picture of the Australian banking industry.  What once was deemed safe blue-chip shares with reliable dividends has been marred with share price volatility and slashed surpluses affecting pay-outs to shareholders.

While banks tend to do well in times of market hysteria, cashing in on wild price swings in, Macquarie has been no different.

In its most recent market update in July, Macquarie CEO Shemara Wikramanayake said:

Macquarie’s markets-facing businesses were down on the first quarter of 2020, primarily due to significantly lower investment-related income in Macquarie’s Capital, partially offset by stronger contributions from certain divisions in commodities and global markets.

The global powerhouse has continued to maintain a conservative approach to capital, funding and liquidity that positions the group to respond constructively to COVID-19.

At June 30, Macquarie’s cash surplus position stood at $8.1 billion, well above the Australian Prudent Regulatory Authority’s strict capital requirements. Macquarie’s common Tier 1 ratio was 13.2 percent.

Macquarie Assets Management fell to $568 billion, down 5% by predominantly FX movements.  Although its Banking and Financial Services division grew 8% in total deposits to $69 billion from the previous quarter.

Macquarie’s bullish share price rise

The global powerhouse has been on the mends to recovery from the fallout of coronavirus.  The Macquarie share price is up 84% since it bottomed out in March, sitting just below its all-time high of $152.35 achieved in late February this year.

Interestingly, Macquarie has been steadily growing its earnings per share by 10%–15% over the last three years.  Earnings per share is considered an important tool to understanding the value of a business.  It is widely use to track a company’s performance.

Should, the company be able to continue this trend, the correlation between the value of the business and the profitability reported should, in essence, send the Macquarie share price higher.

It is a growth trajectory in the works for this banking giant.

Macquarie is expected to release its half year earnings for FY21 on 6 November.

Foolish Takeaway

I do believe that the Macquarie share price will reach the $200 mark.  Of course, with the business being so resilient in the face of such challenging conditions and strong capital to back it up, it is just a question of timing.

With almost 3 months remaining, perhaps the milestone won’t be reached by the end of this year.  However, there is a strong possibility it could attain that feat in 2021.

More reading

• 2 leading ASX shares for a blue chip portfolio
• 6 ASX giants pay $1 billion for ripping off customers
• 2 of the best ETFs for investing in ASX shares
• The latest ASX stocks upgraded by brokers to “buy” today
• The highest paid CEOs in the ASX 200

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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.

The post Can the Macquarie share price go to $200? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32rcXJD

Qantas Airways Limited (ASX: QAN) has announced a plan to outsource ground crew in order to axe up to 2,420 jobs.

The airline revealed its intentions on Tuesday afternoon, saying it had briefed staff and unions earlier in the day.

“Outsourcing this work to specialist ground handlers would save an estimated $100 million in operating costs each year,” said Qantas Domestic boss Andrew David.

“Today’s announcement will be very tough for our hard-working teams, most of whom have already been stood down for months without work. This obviously adds to the uncertainty but this is the unfortunate reality of what COVID-19 has done to our industry.”

The outsourcing reviews would take place in three different areas:

1. Outsourcing ground-handling operations at 10 Australian airports. This would cut up to 2,000 jobs.
2. Outsourcing bus services for customers and staff at Sydney Airport. This could impact up to 50 in-house employees.
3. Jetstar will outsource ground handling at 6 Australian airports. There are 370 jobs under threat from this move.

Qantas stated no customer-facing roles would be impacted by the proposals.

Other airlines do it already

Jetstar chief Gareth Evans said “every major airline” in the world outsources ground-handling operations.

“These ground handlers provide these services to many airlines at airports, rather than just one, and provide scalable resources, which makes them very cost effective,” he said.

“Contracting this work out also reduces the capital spend required each year. As an example, Qantas and Jetstar would need to invest a further $100 million on ground handling equipment over the next five years, such as tugs and bag loaders, if the work is kept in-house.”

The outsourcing revelations follow last week’s financial results, which saw Qantas lose $2.7 billion before tax for the 2020 financial year.

Qantas chief executive Alan Joyce at the time begged for national consistency in state border closures, which is crippling the company’s operations.

“We still don’t understand why states with zero cases for a long time have borders closed to states with zero cases. That doesn’t seem to make any medical sense or any advice that we  have seen.”

More reading

• Qantas CEO chopped, fleet grounded
• Top brokers name 3 ASX shares to sell next week
• Should you buy ASX shares before or after reporting season?
• ASX 200 down 1%: Qantas results, Afterpay hits record high, Webjet crashes lower
• Qantas reveals routes that are busier now than before Covid-19

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.

The post Qantas to cut 2,420 more jobs appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/31rU6OY

The Stockland Corporation Ltd (ASX: SGP) share price was one of the strongest performers on the S&P/ASX 200 Index (ASX: XJO) on Tuesday following the release of its full year results.

The diversified property company’s shares ended the day with a gain of almost 6.5% to $3.86.

How did Stockland perform in FY 2020?

Stockland was a relatively solid performer in FY 2020, all things considered.

For the 12 months ended 30 June 2020, it reported an 8% decline in funds from operations (FFO) to $825 million. This decline was largely the result of COVID-19 impacts on its business. Stockland’s FFO per share fell 7.2% to 34.7 cents or 4.6% to 31 cents on an adjusted basis.

As with many other property companies, the pandemic has led to a sizeable devaluation of its commercial property. It recorded a net Commercial Property devaluation of $464 million during the year and a net fair value decline of $116 million in Retirement Living. This ultimately led to Stockland reporting a statutory loss of $14 million for the year.

Nevertheless, its net operating cashflows were robust at $1.1 billion in FY 2020, which reflects strong residential settlements.

This allowed Stockland to declare a full year distribution per security of 24.1 cents, which represents a distribution payout ratio of 70% and is fully covered by its operating cashflows

Managing Director and CEO, Mark Steinert, said: “I am pleased to announce a full year result which reflects the benefits of our diversified portfolio, particularly in light of the economic challenges presented by the Australian bushfires and the COVID-19 pandemic. We have tackled these challenges proactively and decisively, responding to these unprecedented events to both protect our business and position us well for the future.”

“We continued to successfully execute our group strategy throughout the year despite these challenges and this is reflected in the underlying performance of the business. FFO was down 8.0% to $825 million and FFO per security was 34.7 cents down 7.2%, reflecting COVID-19 impacts across our business particularly on our Retail Town Centres, offset by growth in Communities, Workplace and Logistics,” he added.

FY 2021 outlook.

As with many of its peers, Stockland will not be providing guidance for FY 2021 at this stage due to the uncertainty around COVID-19 impacts.

It intends to continue to monitor the impact of the pandemic and its implications for its strategy and business.

Mr Steinert commented: “We remain focused on creating Australia’s most liveable and sustainable communities, accelerating our Logistics development pipeline and future proofing our Retail Town Centres.”

“The impact of COVID-19 is extensive and has created significant and continuing uncertainty. We have seen reasonable resilience to the impact of the pandemic due to the provision of essential services, our sub-regional and non-metropolitan retail exposure, and the strength of our leading Communities business.”

“Nonetheless, there have been significant impacts on our people, customers, residents and different parts of our business. We will continue to monitor the impacts of COVID-19 and the implications for our business, while remaining agile in our execution of strategic priorities,” he added.

Positively, the chief executive believes Stockland is well-positioned to ride out the storm.

“With a strong liquidity position, we are well placed to respond to increased demand in housing and logistics and relative strength of convenience based retail centres. I am incredibly proud of how the team and business is performing. Whilst it is difficult to predict the outcome of FY21 with certainty, in the coming months, we are committed to the continuing execution of our strategy and positioning the business for the future,“ Mr Steinert concluded.

More reading

• 2 ASX shares to buy and 2 to avoid as deflation bites

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.

The post Stockland share price jumps over 6% following solid FY 2020 result appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/34I63m3

The Covid-19 pandemic this year has seen a surge of amateur retail punters have a go at short-term day trading.

But in volatile times, it’s more important than ever to invest in shares for the long-term. That’s the philosophy we follow and encourage here at The Motley Fool.

So when Vanguard this year launched an online investment platform that actually gave users no choice but to play the long game, we were intrigued.

“This challenging period will eventually pass,” Vanguard Australia managing director Frank Kolimago said at the launch. 

“And Personal Investor will help long-term investors to be well-positioned to benefit when it does.”

Vanguard Australia head of Personal Investor, Balaji Gopal, told The Motley Fool this week that the platform made it easier to invest directly into the company’s fund products.

“Vanguard ETFs you can buy without any brokerage fee on our platform. But we also offer ASX300 securities,” Gopal said.

With access limited to in-house exchange-traded finds (ETFs), managed funds and just the 300 largest ASX-listed companies, Vanguard is discouraging short-term trading.

“Everything we’re doing is to enhance that long-term investing mindset,” he said.

“Small caps can grow faster than large caps, but they can also lose their profitability due to their size. Large caps are better covered and more diversified.”

It’s not about broking

Vanguard obviously prefers Personal Investor users to put money into its own index and managed funds. 

“Broking is not going to be our business… We don’t want to be a broker,” Gopal said.

“We would rather investors invested in truly diversified portfolios, which is what our funds and ETFs offer.”

But it added the ASX300 direct investment capability as a value-add, admitting some customers would become interested in ownership of specific companies.

Shares can be purchased with a brokerage fee of $19.95 or 0.15% per trade, whichever is greater.

Under the covers, the broking functionality is provided by an undisclosed “reputable” third party supplier.

Usage of the Personal Investor platform attracts an annual fee of 0.2% of the total account balance, capped at $600.

Stay the course

Regardless of whether they buy ETFs or direct shares, Gopal would like the Covid-19 novices to go about investing the right way.

“There are some investor groups that are chasing [quick] returns and high-yielding stocks,” he said.

“But we think there’s merit in talking about the benefits of low-cost, long-term investing. Just staying the course.”

More reading

• Is the Vanguard MSCI Index International Shares ETF the best long-term investment?
• Is now a good time to buy Magellan shares?
• Why I’ve gone cold on ASX REITs
• 3 quality ASX shares for a beginner’s share portfolio
• These ASX ETFs could generate strong long term returns

Motley Fool contributor Tony Yoo owns shares of Vanguard Australian Property Securities Index Etf, Vanguard MSCI Index International Shares (Hedged) ETF, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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.

The post This share platform forces you to invest long-term appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gsTjBE

If you’re wanting to gain exposure to the growing middle class in China and throughout Asia, you could invest in the likes of A2 Milk Company Ltd (ASX: A2M) and Treasury Wine Estates Ltd (ASX: TWE).

Both companies have been growing their sales in this market at a rapid rate over the last few years. Though, the latter may be off the cards right now due to concerns about a Chinese anti-dumping investigation into wines from Australia.

But that isn’t the only way to gain exposure to this growing population. Another way you can gain exposure to this thematic is through ETFs that are investing directly into these countries.

Two to consider are listed below. Here’s why I think they could be great options for investors:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first Asia-focused ETF to look at is the BetaShares Asia Technology Tigers ETF. It tracks the performance of the 50 largest and most influential technology and ecommerce companies in Asia market (excluding Japan). These companies include the likes of ecommerce star Alibaba, electronics giant Samsung, and WeChat owner Tencent Holdings. I believe these quality companies are well-positioned for growth over the long term thanks to the positive tailwinds being experienced in the rapidly growing Asian economy. Overall, I expect this to lead to the BetaShares Asia Technology Tigers ETF outperforming most major markets such as the ASX 200.

VanEck Vectors China New Economy ETF (ASX: CNEW)

Another exchange traded fund to consider buying is the VanEck Vectors China New Economy ETF. It gives Australian investors exposure to the growing Chinese economy through a total of 120 promising companies. This includes the most fundamentally sound companies in China which have the best growth prospects in sectors making up ‘the New Economy’. These are sectors such as technology, healthcare, consumer staples, and consumer discretionary. If the Chinese economy continues its strong growth over the next decade, these companies should grow with it.

More reading

• Where to invest $5,000 into ASX shares immediately
• 3 big surprises from the a2 Milk Company full year results
• Leading brokers name 3 ASX shares to buy today
• Could these 2 ASX growth shares that crashed last week be a buy?
• Last week’s worst performing ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of A2 Milk. 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.

The post These ASX ETFs will give you exposure to China’s growing middle class appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2EvbQA7

Is iShares S&P 500 ETF (ASX: IVV) the best long-term investment for Aussie investors? There are certainly lots of positives. 

Who provides iShares S&P 500 ETF?

Blackrock is the provider of the iShares group of exchange-traded funds (ETFs). It’s a US asset manager which manages billions of dollars of capital. It provides some of the cheapest ETFs available to Aussie investors and global investors around the world.

About iShares S&P 500 ETF

This particular ETF gives investors exposure to the S&P 500, which is 500 of the biggest and most profitable businesses listed in the US.

The S&P 500 is an index that has been around for decades. So there is plenty of history that investors can look through and know there is ample liquidity for making investments.

Costs

One of the biggest things for ETF investors to look at is the annual cost of the investment. ETFs are just tracking the changes and returns of the index, so the lower the costs the better. When costs are lower it increases the net returns for investors, which is exactly what investors should want.

iShares S&P 500 ETF has an annual management fee cost of just 0.04% per annum. That’s one of the lowest ETF fees for Australian investors. Almost all of the gross returns become net returns in an investor’s portfolio. 

Holdings

An ETF’s performance is essentially down to the performance of its underlying holdings.

I’ve already mentioned that iShares S&P 500 ETF owns 500 businesses in its portfolio. The quality of that portfolio is apparent when you look at its largest holdings.

Based on the latest disclosure, its largest positions were as follows: Apple, Microsoft, Amazon, Alphabet, Facebook, Berkshire Hathaway, Johnson & Johnson, Visa, Proctor & Gamble, Ndivia, Home Depot, Mastercard, UnitedHealth, JPMorgan Chase, Verizon, Paypal, Walt Disney, Adobe and Netflix.

Many of the above businesses are leaders in their industries. They have very large economic ‘moats’ and it would take an incredible performance from a challenger to displace them.

But don’t think of these businesses as American businesses. Most of them are global businesses. PayPal enables payments and transfers across the world. Facebook and Alphabet/Google advertise in almost every country. Johnson & Johnson products are used all over the world, as are Proctor & Gamble products. The world’s global payment network is run by Visa and Mastercard. And so on. 

iShares S&P 500 ETF has a great listing of holdings. With 500 businesses it provides a lot of diversification. However, the biggest allocation is to tech businesses with a weighting of 28%. Normally, having that much weighting to a sector could be detrimental to the idea of diversification. But I think the weighting is a positive of the ETF – technology companies are proving to be resilient to COVID-19 impacts and they have strong long-term growth prospects.

Returns

iShares S&P 500 ETF has delivered excellent returns over the past decade – despite COVID-19. Over the last 10 years to 31 July 2020 the ETF has delivered average returns per annum of 16.4%. That’s a really strong run.

Past performance is definitely not a guarantee of future performance, however it shows the types of returns that the underlying holdings can produce.

Is it a good buy today?

Over the long-term it’s important to recognise that earnings and share prices tend to keep rising. However, there can be heavy volatility, like we saw earlier this year with the market crash.

I think iShares S&P 500 ETF is one of the best (and cheapest) ways to benefit from the steady march of the share market going higher over the decades.

But, with a price/earnings ratio of almost 23 it’s quite highly valued. There is also an upcoming US election, so there may well be some volatility later this year. I think the ETF can be part of a regular investment plan, though I wouldn’t want to invest a lump sum this year until closer to the US election, or perhaps until just after it.

More reading

• 2 ASX shares to buy for growth and income
• Here’s how much money you can actually make from investing in ASX shares

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.

The post Is iShares S&P 500 ETF the best long-term investment? appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/32hHxoQ

If you’re looking to add tech shares to your portfolio in September, then I would suggest you consider the ones listed below.

I believe both of these ASX tech shares have the potential to generate very strong returns for investors over the next decade. Here’s why I would buy them:

Appen Ltd (ASX: APX)

Appen is the leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). It prepares the data for the models of some of the world’s biggest tech companies. This includes the likes of Amazon, Apple, Microsoft, and Facebook.

Demand for these services is expected to grow strongly over the next decade as companies invest heavily in AI. This bodes well for Appen given its leadership position in the industry thanks to its million-strong team of crowd-sourced workers. Overall, I believe it is well-positioned to deliver strong earnings growth over the next decade and beyond.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay is a donor management platform provider for the faith sector. It has been a very impressive performer in recent years and particularly in FY 2020 when it reported a 33% increase in revenue to US$127.5 million. This was driven by a 39% increase in total processing volume to US$5 billion, a 42% lift in customer numbers to 10,896, and flat average revenue per user of US$1,317 per month.

But perhaps most impressive was the operating leverage it achieved during the year. Pushpay delivered a whopping 1,506% increase in earnings before interest, tax, depreciation, amortisation and foreign currency gains/losses (EBITDAF) to US$25.1 million. The good news is that management is expecting another strong year in FY 2021. It has provided guidance for the doubling of its EBITDAF. Despite this growth, Pushpay is still only scratching at the surface of a niche but lucrative market opportunity. This gives it a long runway for growth and could make the Pushpay share price a long term market beater.

More reading

• 2 of the best ETFs for investing in ASX shares
• Are these ASX shares future millionaire makers?
• 3 ASX growth shares to buy in September
• 5 things to watch on the ASX 200 next week
• Where to invest $100,000 into ASX shares right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Appen 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.

The post 2 top ASX tech shares to buy in September appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3lereSk