NextDC Ltd (ASX: NXT) shares are pushing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) data centre operator and developer closed yesterday trading for $12.81. In early afternoon trade on Tuesday, shares are swapping hands for $12.83 apiece, up 0.2%.

For some context, the ASX 200 is up 1.3% at this same time.

After sinking over the last three months of 2025, NextDC shares are up 2.4% in 2026, outpacing the 0.1% year to date losses posted by the benchmark index.

And with an eye on the year ahead, EnviroInvest’s Elio D’Amato forecasts more outperformance for the ASX AI stock (courtesy of The Bull).

Here’s why.

Should you buy NextDC shares today?

“NextDC develops and operates data centres across Australia,” D’Amato said.

Citing the first reason he’s bullish on the ASX 200 stock, he noted:

Net revenue of $189.2 million in the first half of fiscal year 2026 rose 13% on the prior corresponding period. Underlying EBITDA [earnings before interest, taxes, depreciation and amortisation] of $9.9 million was up 9%.

D’Amato’s buy recommendation on NextDC shares also hinges on the company’s environmentally friendly and efficient energy production.

According to D’Amato:

NXT sources renewable energy for its facilities and designs highly efficient cooling systems, reducing carbon intensity per megawatt. Digital infrastructure is energy intensive, but efficient operators are poised to benefit.

As for the third reason you may want to buy NextDC shares today, he concluded, “Structural demand and execution momentum, in our view, support further upside.”

Commenting on that demand following the release of the company’s half year results in February, NextDC CEO Craig Scroggie said, “Our record forward order book is expected to drive a material uplift in revenues and earnings as we deliver this capacity across the period to FY29.”

Advantage Aussie data centres

NextDC shares also could find themselves in the sweet spot amid new laws spruiked by United States President Donald Trump last week.

The proposed regulations would see the nation restrict AI chip exports to countries that don’t have US approval.

Commenting on the potential impact of the proposed laws, Belinda Dennett, CEO of Data Centres Australia – whose members include NextDC – said (quoted by The Australian Financial Review):

We would anticipate that Australia, as a Five Eyes security partner with the US and with the critical minerals trade deal negotiated by the Albanese government, would be at the top of the list to secure a licence under this proposal.

This would give Australia an advantage over other markets, adding to land availability, abundant renewable energy, political stability, a highly skilled workforce and globally recognised leading local data centre operators in making us a favourable destination for data centre investment.

The post 3 reasons to buy NextDC shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) financial shares are 1.85% higher as the market recovers from yesterday’s $90 billion rout.

Meanwhile, experts have recommended that investors sell two popular ASX 200 financial shares.

Here’s why.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

The Soul Pattinson share price is 1.5% higher at $38.35 on Tuesday, and up 16% over the past 12 months.

Soul Patts is a diversified investment house that invests across a range of industries and asset classes, including ASX shares.

On The Bull this week, Mark Elzayed from Investor Pulse revealed a sell rating on this ASX 200 financial share.

Elzayed explains his sell rating:

SOL has long earned its place in Australian portfolios because of its enviable dividend record and conservative stewardship.

Even so, we see grounds for a tactical exit.

The valuation has moved to a premium relative to underlying asset momentum, with the price-to-earnings ratio sitting well above its longer term average.

Elzayed also spoke of moderation across Soul Patts’ core holdings of New Hope Corporation Ltd (ASX: NHC) and TPG Telecom Ltd (ASX: TPG) shares and the Brickworks business.

(New Hope shares are among the biggest fallers of the ASX 200 on Tuesday — here’s why.)

Elzayed concluded:

Softer global coal prices are tempering the exceptional cash generation previously delivered by New Hope, while TPG continues to navigate an intensely competitive telecommunications landscape.

Absent a meaningful acquisition to reignite growth, the fading post-merger enthusiasm around the Brickworks restructuring could leave the shares marking time.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is $14.42, up 2.3% on Tuesday and down 25% over 12 months.

Also on The Bull this week, John Athanasiou from Red Leaf Securities gave the insurance giant a sell rating.

Athanasiou explained:

While premium rate increases have helped, we believe margin expansion is peaking. Earnings are exposed to claims inflation, natural catastrophe volatility and regulatory scrutiny.

Half year results to December 31, 2025 highlighted these risks. Profit after tax of $263 million was down from $1.1 billion in the prior corresponding period. Cash earnings were hit by higher natural hazard costs and the interim dividend was reduced.

Suncorp declared a fully franked interim dividend of 17 cents per share for 1H FY26, down from 41 cents per share in 1H FY25.

The Suncorp interim dividend represents a payout ratio of 68% of cash earnings, and will be paid on 31 March.

Athanasiou added:

Much of the recent improvement reflects cyclical conditions rather than structural change.

In our view, the valuation is vulnerable given competitive pricing pressure and rising affordability concerns. 

The post 2 ASX 200 financial shares to sell: Experts appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Technology shares on the ASX have had a rough run over the past year.

Rising interest rates, concerns about artificial intelligence (AI) disruption, and broader market volatility have pushed many growth stocks significantly lower.

But for long-term investors, this sell-off may be creating opportunities.

One ASX tech stock that could be worth considering right now is WiseTech Global Ltd (ASX: WTC).

At the time of writing, the WiseTech share price is $51.55, up 1.76% today.

Even after this small rebound, the stock remains well below where it traded last year.

A huge fall from its highs

WiseTech shares have fallen dramatically over the past 12 months.

The stock reached a 52-week high of $121.31 in July last year, before sliding as investor sentiment towards tech companies deteriorated.

More recently, the share price dropped to $40.59 on 13 February, marking its lowest level in almost 4 years.

Although the stock has bounced from that level, it is still trading more than 50% below its peak.

That steep decline could be one reason why the current valuation is starting to look far more attractive.

A global logistics software leader

WiseTech develops software used by freight forwarders and logistics companies around the world.

Its flagship platform, CargoWise, helps businesses manage complex global supply chains. Once embedded in a customer’s operations, the software tends to become deeply integrated into their systems.

That creates high switching costs and strong recurring revenue for the company.

WiseTech continues to expand its platform through product development and acquisitions. Management is also investing heavily in automation and AI, which could help customers improve efficiency and reduce costs.

Technical indicators suggest a recovery may be building

From a technical outlook, there are signs that the worst of the selling pressure may be easing.

The stock recently found support around the $40 to $45 range, where buyers stepped in during February.

Since then, the share price has been trending higher and is now approaching potential resistance near $60.

Momentum indicators are also improving. The relative strength index (RSI) is currently around 52, suggesting the stock is neither overbought nor oversold.

Meanwhile, the share price is trading slightly above its Bollinger Band midpoint, which can indicate a short-term recovery trend.

If momentum continues to build, a move back toward the $70 to $80 range could be possible over time.

Foolish takeaway

WiseTech shares have fallen well below their highs, but the underlying business continues to expand.

If the company delivers on its growth strategy and tech sentiment improves, the current share price could prove a compelling long-term opportunity.

For this reason, WiseTech could be one ASX tech stock worth watching closely right now.

The post What’s a great ASX tech stock to buy right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Life360 Inc (ASX: 360) shares are flying higher in early afternoon trade on Tuesday. At the time of writing, the ASX tech stock is up 10.49% to $22.54 a piece.

Today’s rally means the US-based software development company’s shares are now 30.56% lower year to date and just 2% below where they were this time last year.

The tech stock has been caught up amid the tech-sector-wide sell-off over the past 6 months. This was driven by a growing fear that companies’ core services could be replaced by AI. At the same time, there was concern that tech sector share prices had become overinflated.

Why are Life360 shares flying higher today?

Today’s share price reversal is great news for investors after the stock crashed 18% this time last week, off the back of its FY25 financial results. 

Life360 delivered record growth in both its subscription and international segments, by 33% and 26% year-on-year, respectively. The company also said that it expects strong growth to continue in FY26. The news saw investors flock to the stock, with the share price spiking 15% in early morning trade on the same day. But then the share price took a significant U-turn, potentially due to investors taking their gains off the table.

Now that the dust has settled, it seems as if many are buying back into the growth stock.

There has been no price-sensitive news from the company today to explain the share price spike.

The rebound in tech stocks is evident across many stocks in the S&P/ASX 200 Information Technology Index (ASX: XIJ) today, raising questions about whether ASX technology shares have finally hit the bottom.

At the time of writing, the index is 1.75% higher for the day.

Are Life360 shares a buy, sell or hold for the remainder of 2026?

TradingView data shows that most analysts are extremely optimistic about Life360’s outlook over the next 12 months. 

Out of 15 analysts, 12 have a buy or strong buy rating. Another three have a hold rating on the stock. 

The average target price is $39.82, implying a huge potential 77.13% upside at the time of writing. But some are even more bullish, expecting the stock to rocket 126.50% to $50.94 apiece over the next 12 months.

The team at Bell Potter recently confirmed its buy rating on Life360’s shares with a price target of $40. The broker said it is pleased with the company’s guidance for FY26 and sees now as a good time for investors to pick up shares in this rapidly growing company. 

Morgan Stanley has an overweight rating and $50 target price on the stock. The team said it believes Life360 is well-positioned for strong long-term growth. They added that its defensive qualities and large user base make it difficult for AI to disrupt or replace the company’s business model. 

The post Why are Life360 shares soaring 10% higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Energy prices have been all over the place following the conflict in the Middle East. The share prices of oil companies were sent sharply higher, before returning back down again.

Trying to time the market when there are shocks such as this can be a bit of a fool’s game. Instead, if you believe that global instability is likely to remain high and want to take a long-term view, it’s reasonable to infer that global defence spending will also remain higher than normal, and that energy prices might stay high.

On the spending front this is indeed the case with many countries around the world looking to bolster their armed forces following less confidence in global alliances.

So where does that leave investors?

On the Australian market there are some defence-specific stocks such as Austal Ltd (ASX: ASB), DroneShield Ltd (ASX: DRO) and Electro Optic Systems Ltd (ASX: EOS), but if you’re looking for less volatility, the following defence ASX ETFs might be the way to go.

Global X Defence ETF (ASX: DTEC)

DTEC ETF is a fairly modestly-sized defence ETF which says in its fact sheet that global defence spending has grown at an annualised rate of 4.3% for the past 40 years.

It goes on to say:

Increasing global tensions are driving nations to boost defence spending, reflecting heightened national security concerns and a competitive push to maintain strategic advantage.

DTEC says it invests in companies “with a revenue filter’ with exposure to AI, drones and cybersecurity, “capturing the future of innovation in defence”.

VanEck Global Defence ETF (ASX: DFND)

DFND ETF is quite different from the previous ASX ETF, in that it specifically aims to invest in larger companies that generate at least 50% of their revenues from the defence sector.

The companies it invests in must have a market capitalisation greater than US$1 billion and a 3-month average daily trading volume of at least US$1 million.

This defence ETF has $315.4 million in net assets currently and is invested into 36 companies.

DFND says it provides, “exposure to the largest global companies involved in aerospace and defence, research and consulting, application software and electronic equipment & instruments, that are typically under-represented in benchmarks”.

Betashares Global Defence ETC (ASX: ARMR)

ARMR ETF currently has a wider remit still, providing exposure to “up to 60” global companies which derive more than 50% of their revenues from defence.

At the moment these companies include BAE Systems, Lockheed Martin, General Dynamics and Palantir Technologies.

ARMR will only invest in companies which are headquartered in NATO or NATO-allied countries.

Betashares Global Energy Companies Currency Hedged ETF (ASX: FUEL)

And finally, if you’re looking for broad exposure to the energy sector, this Betashares ASX ETF provides just that, investing globally into companies including Chevron, ExxonMobil and Shell.

The post If you think global instability will persist, these ASX ETFs might be for you appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Periods of market volatility can leave investors wondering whether they should buy ASX shares while prices are falling, or sit on the sidelines and conserve cash.

That dilemma has been front of mind this week. The ASX 200 tumbled on Monday after oil prices surged in response to escalating tensions in the Middle East. Markets have partially recovered today, which is a reminder of how quickly sentiment can shift.

When markets move sharply like this, it can feel uncomfortable to invest. But these swings are also a normal part of long-term investing.

Volatility is part of the journey

Share markets rarely move in a straight line. Even during long bull markets there are corrections, geopolitical shocks, and sudden shifts in investor sentiment.

Events such as wars, inflation scares, or interest rate concerns often trigger short-term selloffs. Yet historically the market has tended to recover and move higher over longer periods as company earnings continue to grow.

That is why many experienced investors try to avoid making big decisions based solely on short-term headlines.

Why going all-in can be risky

One challenge during volatile periods is timing. It is extremely difficult to know whether the market has already hit its low point or whether further declines are coming.

Investing all your available cash at once can therefore be risky. If ASX shares fall further after you invest, it can feel discouraging even if the long-term outlook remains positive.

This is why many investors prefer a more gradual approach.

The case for dollar-cost averaging

Dollar-cost averaging (DCA) is a strategy where you invest money into the market at regular intervals rather than committing a large lump sum at once.

For example, instead of investing $10,000 immediately, you might invest $1,000 each month over the next 10 months.

This approach helps smooth out the effects of market volatility. Sometimes you will buy shares when prices are higher, and sometimes when they are lower. Over time, this can reduce the pressure of trying to pick the perfect entry point.

Many long-term investors have used this strategy to steadily build positions in high-quality companies such as ResMed Inc. (ASX: RMD), REA Group Ltd (ASX: REA), or Xero Ltd (ASX: XRO). Others prefer exchange traded funds (ETFs) like the iShares S&P 500 ETF (ASX: IVV) to gain broad exposure to global markets.

Patience usually wins

The most important factor in long-term investing is often not timing the market perfectly, but simply staying invested.

Volatility can feel unsettling in the moment, but over decades the share market has historically rewarded patient investors.

Rather than choosing between buying ASX shares or holding cash entirely, many investors strike a balance. Keeping some cash on hand can provide flexibility, while gradually investing over time allows you to take advantage of market dips.

In uncertain markets, a disciplined approach often proves far more valuable than trying to predict the next short-term move.

The post Should I buy ASX shares or look to conserve cash right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in REA Group, ResMed, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed, Xero, and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended ResMed and Xero. The Motley Fool Australia has recommended iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Woodside Energy Group Ltd (ASX: WDS) share price has tumbled 4.66% in morning trade on Tuesday. At the time of writing the shares have dropped to $29.90 a piece.

Despite today’s decline, the ASX energy shares are still 26.37% higher for the year-to-date and 30.51% higher than this time 12 months ago.

Why has the Woodside share price slumped today?

Rising oil prices have acted as a strong tailwind for Woodside shares over the past 10 days. Conflict in the Middle East has threatened the movement of oil in the region while shipping disruptions and production cuts caused prices to skyrocket to a multi-year high.

Trading Economics data shows that the price of WTI crude oil surged to a 4.5-year high of nearly US$120 per barrel yesterday after major Middle Eastern producers began cutting output following disruptions in the Strait of Hormuz. 

With tanker traffic heavily restricted, several key producers, including Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq, have started curbing production as storage facilities fill quickly.

What was a tailwind for the Woodside share price just a week ago, has now caused a reversal in the energy company’s share price. 

The price of oil has cooled to around US$85 per barrel, at the time of writing. The latest drop follows an announcement from US President Donald Trump that he thinks the war with Iran is nearing its end. 

Trump has also said he plans to waive oil-related sanctions and have the US Navy escort tankers through the Strait of Hormuz. Meanwhile, G7 finance ministers said it will release oil from strategic reserves if necessary.

What’s next for the Woodside share price?

While the cooling crude oil price has caused a slump in the Woodside share price today, the company’s financials are still very strong.

The oil and gas giant reported a strong 2025 result in late-February which confirmed an all-time high full-year production of 198.8 million barrels of oil equivalent (MMboe), topping guidance. 

Its costs fell 4% for the calendar year, and while revenue dropped 1%, its EBITDA was in line with 2024. 

But the experts are still neutral about the near-term outlook for the stock.

While the outlook for the company itself is promising, ongoing conflict in the Middle East adds to concern about near-term volatility and share price risk. 

TradingView data shows that 6 out of 15 analysts have a buy or strong buy rating on Woodside shares. Another seven have a hold rating, and two have a sell rating.

The average target price of $29.22 implies a potential 2.28% downside at the time of writing. 

The post What’s next for the Woodside share price? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) shares are off to the races today.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $169.45. During the Tuesday lunch hour, shares are changing hands for $173.00 apiece, up 2.1%.

For some context, the ASX 200 is up 1.4% at this same time.

Shares in Australia’s biggest bank stock have been strongly outperforming since slumping to nine-month lows of $147.22 on 21 January.

How strongly?

Well, investors who bought at market close on 21 January will have booked gains of 17.5% at current levels.

And that’s not including the fully franked $2.35 interim dividend they’ll receive on 30 March. (CBA traded ex-dividend on 18 February.)

If we add that back into the current share price, then the accumulated value of CBA shares has soared 19.1% in just seven weeks.

Which brings us back to our headline question.

Should you still buy CBA shares today?

Red Leaf Securities’ John Athanasiou recently ran his slide rule over the big four bank stock (courtesy of The Bull).

“CBA remains the highest quality bank, supported by scale, technology leadership and a dominant retail franchise,” he said.

“Credit quality is stable, arrears are contained and capital levels are strong. Recent half year results in fiscal year 2026 beat expectations, which the market welcomed,” Athanasiou added.

But Athanasiou isn’t ready to pull the trigger on CBA shares at current levels, with a hold recommendation on the stock.

He noted:

However, much of this quality is already reflected in its premium valuation. With loan growth moderating and net interest margins normalising, earnings growth is likely to be steady as opposed to spectacular.

CBA trades on a price to earnings (P/E) ratio of around 28 times, the highest of the ASX 200 bank stocks.

On the passive income front, Athanasiou said, “The dividend supports total returns, making it a reliable core holding.”

CBA trades on a fully franked trailing dividend yield of 2.9%.

As for his hold recommendation, Athanasiou concluded, “Upside is limited at current prices. However, existing investors should maintain exposure, while new capital may find better growth or valuation opportunities elsewhere.”

What’s the latest from the big four bank?

CBA reported its half year results on 11 February.

Highlights included an expectation-beating cash net profit after tax (NPAT) of $5.45 billion. That was up 6% on CBA’s H1 FY 2025 cash NPAT.

CBA shares closed up 6.8% on the day of the results release.

The post Up 19% in 7 weeks, are CBA shares a good buy today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NexGen Energy Ltd (ASX: NXG) shares are trading significantly higher today amid broad support for the uranium sector; however, it’s the company’s longer-term plans that have brokers attaching bullish share price targets.

The ASX uranium stock has more than doubled over the past 12 months – indeed, for those who got in at the low of $6.44, it has almost tripled to now be changing hands for $17.56.

But three brokers we surveyed all thought the company’s shares had further to go.

So let’s look at the big news underpinning the share price rise in recent days.

Major approval a milestone

Naturally, the ructions in the energy market from the war in the Middle East have played a part in bolstering support for uranium shares; however, NexGen has had some big news of its own.

The company said late last week that it had received the final approval necessary to build its Rook 1 uranium mine in Canada, which will be among the biggest in the world once it comes into production.

The company said regarding the project last week:

When fully operational, the Rook I Project will be the largest single source and environmentally elite uranium mine globally, incorporating state-of-the-art extraction and safety systems. In production, Rook I is capable of producing up to 30 million pounds annually – representing over 20% of the current global uranium fuel supply and over 50% of western world supply.

The company added that now that approvals were in place, it was set to begin construction.

The team, procurement, engineering, vendors, contractors and capital are in place to commence construction activities with advanced site and shaft sinking preparation. NexGen has already made its Final Investment Decision with official construction commencing in summer 2026. As per the Rook I Project schedule, construction will take 4 years from commencement.

ASX uranium stock looking cheap

The team at Shaw and Partners have had a look at the announcement, and they like what they see.

They said in a note to clients this week:

In our view the uranium market is in the early stages of a ‘super-cycle’ and we expect to see prices increase to ~US$200/lb before reverting to a long-term sustainable price of US$120/lb next decade. NexGen is one of our preferred exposures to the super-cycle. We retain our buy recommendation and $22.90 price target which is based on a DCF valuation.

UBS also has a buy recommendation on the ASX uranium stock with a price target of $21, while Bell Potter has a price target of $19.

The post Up more than 100% in a year, this ASX uranium stock has further to go, brokers say appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Building an ASX share portfolio can be a delicate process. You obviously want to pack your portfolio full of shares of the highest quality. But you also want to be sure that if a crisis hits the share market, your investments are financial sound and well insulated against any permanent capital loss. This can be a tricky balance. One of the ways I protect my own portfolio for this purpose is with an ASX exchange-traded fund (ETF).

The ETF in question is the VanEck Morningstar Wide Moat ETF (ASX: MOAT).This fund is a rather unique ETF on the ASX. Instead of tracking a simple index, as the Vanguard Australian Shares Index ETF (ASX: VAS) or the iShares S&P 500 ETF (ASX: IVV) do, MOAT invests in a concentrated portfolio of carefully-selected stocks.

These stocks hail from the Untied States, and have to check several boxes before gaining admission to the MOAT portfolio. One of those boxes is being available at a fair valuation. But the most important one is possessing a wide economic moat.

A ‘moat’ is an investing concept first coined by legendary investor Warren Buffett. It refers to an intrinsic competitive advantage that a company can possess, that helps the company ride out economic cycles, as well as fend off competition.

How does this wide moat ETF protect an ASX share portfolio?

This moat could come in several forms. It could be a powerful brand that consumers trust, or a cost advantage that allows the company to consistently charge lower prices than competitors. it could be providing a product or service that consumers find difficult to avoid, or else possessing an intellectual property that the company solely owns.

Companies that possess strong moats are usually long-term winners. Warren Buffett himself has stated that he looks for these sorts of advantages in every investment he buys.

The VanEck Wide Moat ETF is full of them. We can see this in action by looking at this fund’s holdings. As it currently stands, the MOAT portfolio counts stocks like Boeing, Airbnb, Clorox, Nike, Cadbury-owner Mondelez International, Adobe and Microsoft as current holdings.

These are all dominant, profitable companies that possess at least one form of a moat. It could be the enduring appeal of Mondelez’s brands like Cadbury or Oreo, or the essential nature of the software products that Microsoft or Adobe provide. The resilient nature of these stocks provide a lot of stability for my portfolio, and help me sleep well at night. As such, I am very happy to have the VanEck Morningstar Wide Moat ETF in my ASX portfolio, especially in a week like the one we are having.

The post This ASX ETF is my stock portfolio’s shield appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Microsoft, Mondelez International, VanEck Morningstar Wide Moat ETF, and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Airbnb, Boeing, Microsoft, Nike, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool Australia has recommended Adobe, Airbnb, Microsoft, Nike, VanEck Morningstar Wide Moat ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.