Are ASX tech shares the only way to protect your portfolio against the coronavirus?

2020 has seen something akin to what Ray Dalio might call a ‘paradigm shift’ for investors right around the world. With a rampaging pandemic, the way we spend money has changed, and fast. And when we change how we spend money, it changes the manner in which every company on the ASX receives revenue. As the old adage goes, one person’s spending is another person’s income.

One massive facet of this ‘paradigm shift’ has been an acceleration of the trend towards all things digital. As most of us could barely leave the house over March and April, we had to change how we ate, how we shopped, how we worked and how we entertained ourselves. So it’s no surprise that US tech companies like Slack, Microsoft, Amazon and Netflix have seen their share prices balloon over the course of the year so far.

But what of ASX shares?

Comparatively speaking, the ASX doesn’t have as much exposure to the tech space as our friends over in the US. Lacking big names like Alphabet or Microsoft, our largest companies are still mostly banks and miners. Even the home-grown Atlassian now counts itself as a US tech company — our loss, their gain.

ASX tech shares on fire

But this hasn’t stopped ASX tech shares from receiving a lot of investor attention since March. Just think of Afterpay Ltd (ASX: APT). Its share price is up an astonishing 670% since 23 March. Or Appen Ltd (ASX: APX), up more than 100%. Maybe Seek Ltd (ASX: SEK) with 87%. Or Xero Limited (ASX: XRO) with 57%.

Meanwhile, a blue chip share like Westpac Banking Corp (ASX: WBC) is ‘only’ up a touch over 20% over the same period. Woolworths Group Ltd (ASX: WOW) shares haven’t offered too much relative upside either, with a 6.4% gain. And our largest company CSL Limited (ASX: CSL)? It’s gone backward since 23 March.

So are ASX tech shares (or US tech shares if you’re so inclined) the only way to protect your portfolio against the coronavirus pandemic?

Well, I do think the investing landscape has changed, and semi-permanently so. There’s no question that the pandemic has accelerated technological adoption. But I don’t think ASX tech shares are the only way to protect a portfolio.

Just this week, ASX gold miners like Newcrest Mining Limited (ASX: NCM) have been in the spotlight due to the price of gold breaking its all-time high. That’s one avenue of exploration to consider (no pun intended) for portfolio protection. Ditto with waste companies like Cleanaway Waste Management Ltd (ASX: CWY), which is about as far from an exciting tech stock as you can get.

It may be morbid to consider, but funeral provider InvoCare Limited (ASX: IVC) benefits from the former of the two certainties of life.

Foolish takeaway

Whatever happens with the coronavirus, companies like Cleanaway, InvoCare and Newcrest are going to have solid markets with solid demand. Thus, I don’t think you need to solely chase ASX tech shares for your portfolio if you don’t wish. There’s plenty of fish in the sea!

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Is the Newcrest share price a buy?
• What would deflation mean for your ASX shares?
• WAAAX shares see mixed recovery from COVID-19
• Top broker warns earnings expectations for the ASX reporting season are too high

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Newcrest Mining Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO, Appen Ltd, and Woolworths Limited. The Motley Fool Australia has recommended Alphabet (A shares), InvoCare Limited, and SEEK 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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If you’re looking for some dividend shares to buy in August, then I think it would be worth considering the three listed below.

Here’s why I think they are in the buy zone:

BWP Trust (ASX: BWP)

The first ASX dividend share I would buy is BWP. I’m a big fan of the real estate investment trust due to my belief that it is well-positioned to continue growing its income and distribution throughout the pandemic and beyond it. This is because BWP’s warehouses are predominantly leased to home improvement giant, Bunnings Warehouse. Given how Bunnings is one of the best retailers in the country and government stimulus is supporting the home improvement market, I believe the risk of store closures and rental defaults is extremely low and periodic rental increases remain possible. At present I estimate that its units offer a FY 2021 4.7% yield.

Lendlease Group (ASX: LLC)

Another dividend share that I would suggest income investors consider buying is Lendlease. The international property and infrastructure company had a tough time in FY 2020 and reported a material drop in profits. However, I believe the worst is now behind the company and it is well-placed to return to growth. Especially given its burgeoning global development pipeline, which includes a mega project with Google. I estimate that the company will pay a 57 cents per share dividend next year. Based on the current Lendlease share price, this equates to a 4.9% dividend yield.

Rural Funds Group (ASX: RFF)

A final ASX dividend share to consider buying is Rural Funds. I think the agriculture-focused property group is one of the best income options due to the quality and diversity of its assets and its very positive long term outlook. This is thanks to its long tenancy agreements with some of the biggest players in the industry and their periodic rental increases. I believe this puts Rural Funds in a position to continue growing its distribution during the pandemic and beyond. In FY 2021 it expects to pay shareholders a 11.28 cents per share distribution. Based on the latest Rural Funds share price, this equates to a 5.6% yield.

More reading

• 2 ASX shares I would buy for growth and income today
• Why I would buy Coles and these ASX dividend shares today
• Beat low interest rates on savings accounts with these ASX dividend shares
• Value stocks to rise on strong A$ and broker picks the cheapest ASX stocks to buy today
• 2 of the best ASX dividend shares to buy 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 RURALFUNDS STAPLED. 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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On Tuesday the S&P/ASX 200 Index (ASX: XJO) gave back its strong morning gains to finish the day lower. The benchmark index fell 0.4% to 6,020.5 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to drop lower.

The ASX 200 is expected to drop lower again on Wednesday after a poor night of trade on Wall Street. According to the latest SPI futures, the benchmark index is expected to fall 24 points or 0.4% at the open. On Wall Street the Dow Jones fell 0.8%, the S&P 500 dropped 0.65%, and the Nasdaq tumbled 1.3% lower.

Rio Tinto half year results.

The Rio Tinto Limited (ASX: RIO) share price will be one to watch on Wednesday when it releases its half year results. According to a note out of Goldman Sachs, it expects the mining giant to report underlying earnings of US$4 billion and underlying EBITDA of US$9.1 billion. In respect to its dividend, Goldman is expecting Rio Tinto to declare a US$1.51 per share interim dividend.

Virgin Money UK Q3 update.

The Virgin Money UK PLC (ASX: VUK) share price could be on the rise today following the release of its third quarter update after the market close on Tuesday. The UK-based bank reported a 4.8% increase in customer deposits to £67.7 billion and a 5.7% increase in Business lending growth to £8.8 billion. Over in the UK, the Virgin Money share price rose 2.5% overnight.

Oil prices pull back.

Energy producers including Oil Search Limited (ASX: OSH) and Santos Ltd (ASX: STO) could come under pressure today after oil prices pulled back. According to Bloomberg, the WTI crude oil price fell 1.3% to US$41.06 a barrel and the Brent crude oil price dropped 0.35% to US$43.26 a barrel. Oil prices tumbled after rising coronavirus cases sparked demand fears.

Gold price jumps again.

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could be on the rise again on Wednesday after the gold price continued its ascent. According to CNBC, the spot gold price rose 1% to US$1,950.30 an ounce. This could be the start of even greater rises, with some analysts tipping the price of the precious metal to go materially higher from here.

More reading

• Are ASX tech shares the only way to protect your portfolio against the coronavirus?
• Is the Newcrest share price a buy?
• ASX 200 down 0.4%, Credit Corp and Temple & Webster impress
• Will Rio Tinto pay a special dividend tomorrow?
• Virgin Money UK share price on watch after Q3 update

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

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