If you’re looking to invest $10,000 into the share market in FY 2021, I think the three ASX shares listed below could be quality options.

I believe all three have the potential to beat the market over the next 12 months and beyond. Here’s why I like them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first option for investors to consider investing $10,000 into is the BetaShares NASDAQ 100 ETF. This exchange traded fund allows you to invest in the 100 largest non-financial businesses listed on the famous technology-focused NASDAQ index through a single investment. This means you’ll be investing in shares such as Amazon, Apple, Netflix, Facebook, Microsoft, and Google’s parent, Alphabet. I think these are among the highest quality businesses in the world and capable of driving the NASDAQ index higher in FY 2021 and throughout the 2020s.

NEXTDC Ltd (ASX: NXT)

Another option to consider for that $10,000 investment is NEXTDC. I believe the data centre operator is positioned perfectly to capitalise on the cloud computing boom. According to global technology research firm Gartner, it has forecast that 80% of all organisations will shift their workloads to third-party data centres by 2025. And given that this prediction was made pre-pandemic, I wouldn’t be surprised if this shift has accelerated. Overall, I expect this to lead to increasing demand for its innovative data centre outsourcing solutions. This should support solid earnings growth as the company scales.

ResMed Inc. (ASX: RMD)

Another ASX share to consider buying with the $10,000 is ResMed. I’m confident the medical device company can be a strong performer in FY 2021 and beyond. This is due to its focus on the sleep treatment market and the proliferation of obstructive sleep apnoea, which is driving increasing demand for its masks and software solutions. In addition to this, a second wave of coronavirus in a number of key markets looks likely to lead to strong ventilator sales in the near term.

More reading

• Here are 2 easy ways to invest in quality international shares on the ASX
• 2 quality ASX shares I would buy with $10,000 in July
• Why ResMed and these ASX shares have just hit new highs
• 3 five-star ASX stocks to buy in July
• 10 high quality ASX shares to buy in FY 2021

Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended 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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The S&P/ASX 200 Index (ASX: XJO) went up 1.4% today, defying the ongoing negativity with COVID-19.

This afternoon the Victorian Premier Daniel Andrews has announced that restrictions will be reintroduced for 10 Victorian suburbs. People will only be allowed to leave their house for four reasons. Those reasons are: for work or school, for care or care giving, for daily exercise, for food and other essentials. Police will actively enforce the suburb lockdowns with on-the-spot fines if people are out of their homes for anything other than the permitted reasons.

Collins Foods Ltd (ASX: CKF) delivers tasty returns

The ASX 200 fast food business announced its FY20 result today.

Revenue grew by 8.9% to $981.7 million. KFC Australia delivered same store sales growth of 3.5%. However, KFC Europe’s same store sales dropped 5.8% mainly due to COVID-19.

Collins Foods said that Taco Bell continues its expansion amidst high brand engagement, with recent shifts towards drive-thru and delivery channels.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) (pre AASB 16) grew 6.3% to $120.6 million. Underlying net profit after tax (NPAT) (pre AASB 16) rose by 5.1% to $47.3 million. Statutory NPAT came in at $31.3 million.

Collins Foods said that net debt was down to $203.2 million (compared to $212.5 million in FY19). The net leverage ratio was down to 1.69 times (compared to 1.87 times in FY19).

The board of Collins Foods decided to declare a final dividend of 10.5 cents per share, bringing the total FY20 dividend to 20 cents per share, up from 19.5 cents in FY19.

In FY21 Collins Foods wants to add up to 12 new KFC Australia restaurants, three to four European KFC restaurants and four to six Taco Bell restaurants.

Freedom Foods Group Ltd (ASX: FNP) CEO resigns

The board of ASX 200 company Freedom Foods announced today that last night it accepted the resignation of CEO and managing director Rory Macleod. He has resigned from all board and executive positions.

The company also announced that further to the update it released on 25 June 2020, it has engaged Ashurst and PwC to advise and assist with ongoing investigations into the company’s financial position.

Freedom Foods shares remain suspended.

Lifestyle Communities Limited (ASX: LIC) acquisition

The business has acquired a new 9-hectare site in Clyde which is located in the south east growth corridor.

The new site will add approximately another 230 homes which increases Lifestyle Communities portfolio to 4,518 home sites including sites in planning, development or under management.

Lifestyle Communities also announced an increase of its existing debt facility by $50 million and extended its tenor. The result of the amendments is a combined facility of $275 million comprising a $165 million tranche maturing in March 2024 and a $110 million tranche with a maturity of June 2025.

The managing director of Lifestyle Communities, James Kelly, said: “We are seeing a number of high-quality sites come to market because of the change in macro conditions. The increase in facility size is an important step to ensure we have capacity to secure additional sites that meet our site selection criteria as they become available.”

Nufarm Limited (ASX: NUF) announces changes to global manufacturing footprint

After the market had closed, ASX 200 agri business Nufarm announced that it’s going to cease manufacture of insecticides and fungicides at its Raymond Road site in Laverton, Australia and curtail herbicide manufacturing at its operations in Linz, Austria.

Nufarm expects that the initiatives announced will deliver an improvement to earnings before interest, tax, depreciation and amortisation (EBITDA) of up to $15 million per annum. However, there will be one-off cash costs relating to the restructuring of approximately AU$25 million, which will be partially offset by proceeds from the future sale of the Raymond Road property.

More reading

• Why the Telstra share price lost 18% in FY20
• Why the TPG share price is up 38% in FY20
• Top brokers name the latest ASX shares to buy today
• What to expect from ASX 200 shares in FY2021
• Morgans picks the best FY21 ASX buys for the COVID-19 world

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Collins Foods Limited and Freedom Foods 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.

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Now that the 2020 financial year has officially ended for ASX shares (as of market close), we can take a definitive look at how individual companies have performed over the last 12 months.

Due to the coronavirus pandemic, most ASX shares have recorded heavy losses over the past year, although there have been quite a few exceptions. Telstra Corporation Ltd (ASX: TLS) is not one of those exceptions, much to the chagrin of its shareholders.

Telstra shares started the financial year last July at $3.83. Today, those same shares have ended the trading day at $3.13, which means the Telstra share price has returned -18.28% over the period. Even accounting for Telstra’s hefty dividend payments, shareholders are still underwater. Over the same period, the S&P/ASX 200 Index (ASX: XJO) is down around -11.3%, which means Telstra has lagged the broader market too.

Why have Telstra shares underperformed in FY20?

The Telstra share price has been under pressure for a few years now. Remember, this was a company that was commanding a $6.50 per share price tag 5 years ago.

Telstra has been suffering throughout the rollout of the National Broadband Network (NBN). This has taken away Telstra’s ownership of the old copper ducts and networks which are still lucrative telecommunications infrastructure. Telstra used to be able to charge its competitors for the use of this infrastructure, which was obviously a great position to be in. Now, it has to compete on a level playing field, which, while great for consumers, is bad for Telstra’s bottom line.

Telstra has also been out of favour because it is set to gain a newly beefed-up competitor in the form of the recently merged Vodafone-TPG Telecom Ltd (ASX: TPM). The ACCC initially blocked the TPG merger from going ahead, but an appeal to the Federal Court has resulted in the roadblock being rescinded. Coincidentally, today is the first ASX trading day of the new TPG. Since TPG was a formidable competitor in the fixed-line space and Vodafone in the mobile space, the combined company could cause a headache for Telstra’s market dominance. Although personally, I don’t see it as quite as significant a threat as perhaps some other investors. Even so, the market appears to be betting on TPG shares over Telstra right now.

Is Telstra a bargain buy today?

At its current level, I actually think there is a lot to like about the Telstra share price. Telstra commands the lion’s share of the Aussie telco market. It has a strong brand, an arguably superior mobile network and is also the market leader in investment in the new 5G technology, which is set to supersede the current-generation 4G mobile network over the next year or two.

Telstra also pays a healthy dividend of 16 cents per share on a trailing basis (including the special NBN payments). On current prices, that would give Telstra a trailing yield of 5.09%, or 7.27% grossed-up.

For a strong dividend share with potential 5G upside, I think Telstra shares are well worth considering for FY2021.

More reading

• ASX 200 rises 1.4%, Collins Foods delivers tasty returns
• Why the TPG share price is up 38% in FY20
• Top brokers name the latest ASX shares to buy today
• Telstra and this ASX 200 share could be top picks for retirees
• What to expect from ASX 200 shares in FY2021

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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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Of all the S&P/ASX 200 Index (ASX: XJO) shares that have delivered outperforming returns for investors in the 2020 financial year, I think TPG Telecom Ltd (ASX: TPM) is one of the most surprising. After all, an ASX telco isn’t the first place most investors look in the search for a market-beating investment.

But the performance of the TPG share price over FY2020 has warranted a re-think of this logic. TPG shares began FY20 at $6.47. Today (on the eve of the new financial year), those same shares will set you back $8.93. That represents a 38.02% gain for TPG shareholders over the past 12 months.

Why has the TPG share price hit the roof?

The past year has been a perfect storm for TPG shares, with several events coming together in the telco’s favour. Firstly, TPG’s planned merger with Vodafone has been greenlit by shareholders and the Federal Court after initially being blocked by the ACCC on competition grounds. This enables TPG to merge its high-performing, fixed-line network of customers with Vodafone’s established market of mobile customers. This ‘new TPG’ looks better set to take the fight up to its competitors in Optus and Telstra Corporation Ltd (ASX: TLS). The combined entity (which officially listed today) is due to start ordinary trading in its own right soon, under the far more appropriate ‘TPG’ ticker symbol.

Secondly, shareholders have also been excited about TPG’s spin-off of its Singapore telco business into another separate entity, Tuas Limited (ASX: TUA), which also hit the boards this morning. As part of this ‘bait and switch’ merger/de-merger, TPG shareholders are also looking forward to a special 49 cents per share dividend which is set to be paid on 13 July.

All of these factors have combined to push sentiment surrounding TPG shares to new highs.

Is TPG still a buy today?

I think the new TPG is shaping up to become a force to be reckoned with on the ASX telco scene. It looks as though the company will benefit from synergies with Vodafone, and TPG’s enigmatic-but-highly-rated CEO David Teoh is a proven performer. However, I do think TPG still has its work cut out for it in competing with Telstra. Telstra has always been the dominant business in the ASX telco space, and I don’t see TPG erasing this advantage anytime soon. Telstra still has the lion’s share of both the fixed-line and mobile markets, and will likely continue holding on tightly to these due to the company’s strong brand and dominant mobile network.

Furthermore, I’m far more bullish on Telstra’s 5G network plans than TPG’s, with the latter acknowledging it has fallen behind in the 5G race. 5G promises to be the ‘next big thing’ in telco, with higher speeds, lower latency and almost limitless ‘Internet of Things’ applications being touted. Even though TPG shares have been the winner in FY2020, I’m still betting on Telstra for the rest of the decade.

More reading

• Top brokers name the latest ASX shares to buy today
• Telstra and this ASX 200 share could be top picks for retirees
• What to expect from ASX 200 shares in FY2021
• Morgans picks the best FY21 ASX buys for the COVID-19 world
• Afterpay shares have exploded 142% in FY20

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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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One area of the market that I’m particularly bullish on over the long term is the tech sector.

In this sector I believe there are a good number of shares that could generate strong returns for investors throughout the 2020s.

Three of the best ASX tech shares to buy in FY 2021 are listed below. Here’s why I think they are great long term options:

Altium Limited (ASX: ALU)

The first ASX tech share to consider buying is Altium. It is the printed circuit board (PCB) design software provider behind the Altium Designer platform. This award-winning platform is used by almost 50,000 users to connect with every facet of the PCB design process. While FY 2020 has been a disappointing year because of the disruption caused by the pandemic, I believe the future remains as positive as ever. Especially given how 5G internet is supporting the rise of connected devices globally. I expect this to result in strong demand for electronic design software over the next decade.

Pushpay Holdings Ltd (ASX: PPH)

Another ASX tech share to consider buying is Pushpay. It is a donor management system provider which has a strong and growing presence in the church market. In fact, as of the end of FY 2020, it has a total of 10,896 customer using its platform. From these customers, Pushpay generated US$127.5 million in revenue. While this is a significant number, it is still only scratching at the surface of management’s medium term target. It is aiming to win a 50% share of the medium to large church market, which represents a $1 billion revenue opportunity. Given the quality of its platform and the recent acquisition of Church Community Builder, I believe it will get there.

Xero Limited (ASX: XRO)

A third ASX tech share to consider buying in FY 2021 is Xero. It is a New Zealand-based cloud accounting software company which has been growing its customer base at a rapid rate over the last few years. So much so, Xero finished FY 2020 with a total of 2.285 million subscribers. This was a 26% lift on the prior corresponding period. And combined with an increase in average revenue per user, the company reported a 30% increase in operating revenue to NZ$718.2 million. The good news is that I’m confident Xero still has a long runway for growth. This is thanks to its massive global market opportunity and its high quality and sticky product. As a result, I think it could be a great buy and hold option.

More reading

• Can ASX fintech shares withstand a falling market?
• Why Pushpay, Ramelius, Saracen, & WiseTech are dropping lower
• These 3 companies have incredible switching cost moats
• Are you in your 20s? Here’s why I would buy these quality ASX shares
• These are the 3 reasons I own Pushpay shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium, PUSHPAY FPO NZX, and Xero. The Motley Fool Australia has recommended 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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