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With just a few hours of trade left in this first week of FY 2025, the S&P/ASX 200 Index (ASX: XJO) is up 0.8% with three ASX 200 stocks doing a lot of the heavy lifting.

Which companies are leading the benchmark higher in these early days of the new financial year?

Read on!

ASX 200 stocks at the top of the FY 2025 leaderboard

The third-best ASX 200 stock in the budding new financial year is Lynas Rare Earths Ltd (ASX: LYC).

Shares in the rare earths miner closed last Friday, the final trading day of FY 2024, at $5.93 apiece. In afternoon trade today, shares are swapping hands for $6.57.

That sees the Lynas share price up 10.8% over the week.

This strong performance is likely linked to the company’s 27 June announcement that its Lynas Malaysia business is aiming for first production of two separated heavy rare earths products in 2025.

The plant will produce separated dysprosium (Dy) and terbium (Tb), both critical elements in the high-performance rare earth permanent magnets found in numerous high-tech devices and EVs.

Moving on to the second-best ASX 200 stock performer in these early days of FY 2025, we have Magellan Financial Group Ltd (ASX: MFG).

Shares in the fund manager closed out FY 2024 trading for $8.42. At the time of writing, shares are changing hands for $9.39 apiece. That puts the Magellan share price up 11.5% over the week.

The Magellan share price closed in the green every day this week, and it looks set to do so again today.

The biggest boost for the ASX 200 stock came yesterday when the company updated the market on its funds under management. After experiencing net money outflows of $100 million in May, flows into and out of its funds were flat in June. Magellan is also set to pay out some $200 million in dividends in July.

Which brings as to the top-performing ASX 200 stock in this first week of the 2025 financial year, Whitehaven Coal Ltd (ASX: WHC).

Shares in the coal miner closed on 28 June trading for $7.65. At the time of writing, shares are trading for $8.96 apiece.

This sees the Whitehaven share price up a whopping 17.1% over the first week of FY 2025.

Whitehaven received some unexpected tailwinds this week alongside other ASX coal miners after Anglo American (LSE: AAL) was forced to suspend production at its Grosvenor coal mine in Queensland following an underground fire.

With an eye towards safety and significant fire damage likely within the mine, Anglo American said it expects coal production at the project to remain suspended for at least several months.

The post 3 high-flying ASX 200 stocks leading the charge into FY 2025 appeared first on The Motley Fool Australia.

More reading

• Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher
• Up 15% in a month: Are Magellan shares still cheap enough to buy?
• Top brokers agree that Lynas shares are ‘undervalued’
• Broker sees Whitehaven shares and one other coal stock as top buys
• Here are the top 10 ASX 200 shares today

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.

The Qantas Airways Ltd (ASX: QAN) share price encountered some turbulence in the financial year just past.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed out FY 2023 trading for $6.20. On 28 June, the last trading day of FY 2024, shares ended the day trading for $5.85.

That saw the Qantas share price down 5.6% over the 12 months.

For some context, the ASX 200 gained 7.8% over this same period.

So, why did the Flying Kangaroo trail the benchmark index?

What happened with the Qantas share price in FY 2024?

The first month of FY 2024 started out strongly for the airline, with the Qantas share price up 7.9% at $6.69 on 24 July.

But not even the company’s blockbuster FY 2023 results, released on 24 August, could keep the stock from sinking all the way to $4.74 a share by 19 October,

Highlights of those results included a 118% year on year increase in revenue to $19.8 billion, with underlying profit before tax of $2.5 billion, roaring back from an FY 2022 loss. Qantas also announced a 500 million on-market share buyback on the day.

However, the strong performance was overshadowed by a steady stream of negative publicity.

That included allegations from the Australian Competition and Consumer Commission (ACCC) that Qantas sold tickets to flights that were already cancelled and the Federal Court ruling that the airline illegally fired 1,700 workers, outsourcing their jobs during the pandemic.

The Qantas share price also faced headwinds, with reports of lengthy flight delays and missing baggage. Investors were then caught off guard by CEO Alan Joyce’s earlier-than-expected departure on 5 September.

The airline’s new CEO, Vanessa Hudson, quickly rolled out plans to rebuild the company’s brand and regain customer trust.

A welcome updraft

The Qantas share price took a marked turn for the better in March, leaping 16.8% from 6 March through to the end of FY 2024.

The big turnaround came not long after the ASX 200 airline released its half-year results on 22 February.

Qantas reported $11.1 billion in revenue for the six months, up 12.3% year on year. And while underlying profit before tax declined by 12.8%, profits still came in at a solid $1.3 billion. Qantas also announced another $400 million on-market share buyback on the day.

As for the new financial year, the Qantas share price is up 2.6% as we near the end of the first trading week of FY 2025.

The post Why did the Qantas share price fly backwards in FY 2024? appeared first on The Motley Fool Australia.

More reading

• Why these losing ASX stocks could be a better buy than AI right now
• Are Qantas or ANZ shares a better buy?
• Qantas share price drops 3% amid Qatar rumours
• Qantas shares lift amid new investment in next-generation aircraft
• Can the Qantas share price keep flying higher in FY25?

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.

When it comes to growing your retirement savings, choosing between different investment options can be crucial.

One popular choice for Australians is the Vanguard Australian Shares Index ETF (ASX: VAS), known for its passive investment approach and low fees. But how does it stack up against your superannuation fund?

Vanguard Australian Shares Index ETF (ASX: VAS) performance

VAS is designed to track the performance of the S&P/ASX 300 Index (ASX: XKO), which includes Australia’s top 300 companies listed on the Australian Securities Exchange (ASX). It offers investors a diversified exposure to the Australian stock market, aiming to replicate its performance.

According to Vanguard, the ETF performances for each time period to 31 May 2024 have been as follows:

• 12.8% over the 12 months to 31 May 2024
• 6.5% per year over the 3 years to 31 May 2024
• 7.8% per year over the 5 years to 31 May 2024
• 7.7% per year over the 10 years to 31 May 2024

As designed, the VAS ETF returns closely follow S&P ASX 300 Index returns, which rose 8.04% per year over the last 10 years to June 2024. This annual return is split into the price return of 3.74% and income return of 4.3%.

I note the comparison period is different by one month, explaining slight differences in returns. But we can say that over a long period, say 10 years, the index fund generates an annual return of approximately 8%. This means your invested capital would double every nine years, assuming reinvestment of your dividends.

What’s the average investment return from super funds?

Before we make this comparison, it is important to remember that your superannuation fund, unlike the VAS ETF, may invest in assets beyond Australian shares, such as international stocks, bonds, property, and cash. Its performance will depend on the asset allocation strategy chosen by the fund managers.

For the purpose of this comparison, let’s simply assume a ‘balanced’ super fund.

According to Chant West, as my colleague Sebastian summarised, the average returns of the average Australian balanced fund (41%-60% of growth assets) were as follows:

• 9.4% over the 12 months to 31 May 2024
• 5.3% per year over the 3 years to 31 May 2024
• 6.7% per year over the 5 years to 31 May 2024
• 7.2% per year over the 10 years to 31 May 2024

The Association of Superannuation Funds of Australia (ASFA) provides estimates for all super funds based on historical data. While this data is only available to June 2023, ASFA believes that superannuation funds achieved average annual returns as follows:

• 9.2% over the 12 months to 30 June 2023
• 5.8% per year over the 5 years to 30 June 2023
• 7.4% per year over the 10 years to 30 June 2023

Making an informed decision

As reviewed above, a simple comparison based on performance history suggests the VAS ETF is doing slightly better than an average super fund.

After all, there’s a reason why legendary investor Warren Buffett advocates index investing. With that said, there are other things to consider before jumping to your conclusion.

• Performance history: Compare the annual returns of VAS with your super fund over the same period.
• Asset allocation: Understand how much of your super fund is allocated to Australian shares compared to other assets.
• Personal preferences: Evaluate whether you prefer a hands-on approach with ETF investments like VAS or rely on professional management through your super fund.

Overall, the VAS ETF appears to be a good place to consider for your retirement planning.

The VAS ETF is up 7.89% over the past year to $96.86.

The post Is the Vanguard Australian Shares Index ETF (VAS) outperforming your super fund? appeared first on The Motley Fool Australia.

More reading

• Why it’s a big day for ASX ETFs
• Want the latest Vanguard Australian Shares Index ETF dividend? Here’s what to do
• Buy these ASX ETFs in July for passive income
• Is the FY25 outlook compelling for the Vanguard Australian Shares Index ETF (VAS)?
• What kind of return could I expect by investing $200 monthly into ASX shares?

Motley Fool contributor Kate Lee 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.

The S&P/ASX 200 Index (ASX: XJO) appears to have run out of steam on Friday. In afternoon trade, the benchmark index is down slightly to 7,824 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are racing higher on Friday:

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel Pharmaceuticals share price is up 14% to $17.34. Investors have been buying this pharmaceuticals company’s shares following the release of an update on the CUV151 study. It is evaluating the DNA-repair capacity of afamelanotide on skin of healthy volunteers exposed to ultraviolet (UV) radiation. Chief scientific officer, Dr Dennis Wright, commented: “The results from RNA sequencing complement the earlier results we saw from immunohistochemistry, in that afamelanotide consistently seems to assist repair of UV-damaged DNA in the skin.”

Guzman Y Gomez Ltd (ASX: GYG)

The Guzman Y Gomez share price is up 4% to $27.78. It appears that some investors believe this quick service restaurant operator’s shares were oversold in recent sessions. One broker that thinks this is the case is Morgans. Earlier this week, the broker initiated coverage on the company’s shares with an add rating and $30.80 price target. This implies upside of almost 11% for investors.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price is up a further 4% to $9.44. Investors have been buying this fund manager’s shares since the release of its monthly update on Thursday. Magellan revealed that net flows were flat in June. This comprised net retail outflows of $0.2 billion and net institutional inflows of $0.2 billion. The company also estimates that it will be entitled to performance fees of approximately $19 million for FY 2024. The market may be pleased but analysts at Macquarie weren’t impressed. The broekr retained its underperform rating and lowered its price target on its shares to $8.20.

Sandfire Resources Ltd (ASX: SFR)

The Sandfire Resources share price is up 1.5% to $9.21. This follows the release of an updated mineral resource estimate for its MATSA asset in Spain. The new estimate totals 172.8Mt at 1.3% copper, 2.8% zinc, 1.0% led and 38.6g/t silver. Sandfire’s CEO, Brendan Harris, said: “It’s pleasing to see the team at MATSA continue to build on our improved orebody knowledge. We have been successful in replacing mining depletion and are now seeing the beginnings of the resource and reserve growth potential we believe will be a key driver of value at MATSA.”

The post Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher appeared first on The Motley Fool Australia.

More reading

• Up 15% in a month: Are Magellan shares still cheap enough to buy?
• Why is this ASX 300 healthcare stock surging 12% today?
• Here are the top 10 ASX 200 shares today
• Why Arafura Rare Earths, Magellan, Metro Mining, and Santos shares are racing higher
• Inflows: Magellan shares spike 7% as institutions pile in

Motley Fool contributor James Mickleboro 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Santos Ltd (ASX: STO) share price is pushing lower on Friday and is currently trading less than 1% down at $7.68 apiece.

This move follows a sharp decline from the weekly high of $8.16 per share on Thursday, as speculation mounted that Santos had found itself a potential buyer.

Who else than Saudi Aramco, the majorly state-owned Saudi Arabian oil company, was the prospect, according to Bloomberg.

However, the Saudi oil giant debunked reports about a potential takeover today. Whilst there is no direct evidence investors are unhappy about this, the Santos share price has subsequently drifted lower on Friday.

Here’s a closer look.

Aramco denies interest in Santos

Saudi Aramco has clarified that media reports suggesting it was considering a bid for Santos are false, according to Reuters.

This statement came in response to Bloomberg’s report on Thursday, which indicated that Saudi Aramco and Abu Dhabi National Oil Company were exploring bids for Santos.

The Santos share price surged on speculation about the possible takeover. On Thursday, shares climbed around 4% to $8.00 as investors reacted to the news.

But without any confirmation from Santos or Saudi Aramco on the matter, the excitement was short-lived.

In an emailed statement on Thursday, the Saudi oil giant clarified it had no intentions to buy Santos, nor was it considering an offer to buy the company.

It said that reports “it was considering an offer for Santos are inaccurate”, per Reuters.

The question was never whether Saudi Aramco has the means to buy Santos.

In 2023, it posted net income of US$32.6 billion. That’s more than Apple Inc‘s income of $19.8 billion and Google owner Alphabet Inc‘s $19.7 billion net profit for the same year.

This isn’t the first time Santos has been in the merger spotlight. Just six months ago, the company engaged in preliminary discussions with Woodside Energy Group Ltd (ASX: WDS) for a potential merger.

However, these talks ended without a deal.

What’s next for the Santos share price?

Despite the recent decline, brokers are positive on the Santos share price.

Goldman Sachs reinstated Santos as a buy in a February note with a price target of $8.35. It highlights expected production growth at its key sites over the next three years.

With key growth project Barossa materially de-risked following the Federal Court’s Jan 15 Judgment to lift the injunction halting pipeline installation and a lack of challenges to NOPSEMA project approvals, we see attractive valuation.

Meanwhile, consensus rates Santos a buy, according to CommSec.

While the initial excitement around a potential takeover has faded, it’s crucial to stay informed and consider the broader market dynamics before making any investment decisions.

Santos is up nearly 5% in the past year.

The post Santos share price goes red as takeover rumours turn into hot air appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why Arafura Rare Earths, Magellan, Metro Mining, and Santos shares are racing higher
• Santos share price smashing the benchmark amid new takeover rumours
• Are Woodside shares a better buy than rival Santos?
• 5 things to watch on the ASX 200 on Tuesday

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Zach Bristow 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 Alphabet, Apple, and Goldman Sachs Group. The Motley Fool Australia has recommended Alphabet and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Magellan Financial Group Ltd (ASX: MFG) shares have been in focus lately, with the stock trading a whopping 15.3% higher over the past month.

Shares in the formerly embattled fund manager are currently swapping hands at $9.55 per share, up 5.29% from the open on Friday.

But is it time to snap up these shares, or is it too early in the turnaround story? Here’s a look.

Magellan shares? Not for Macquarie

Investors have bought Magellan this week after its monthly funds flow update showed outflows drying up. This was coupled with a significant lift in performance fees for FY24 to $19 million.

These performance fees could signify a stronger performance of its investment strategies.

Investment bank Macquarie remains cautious about Magellan, keeping its ‘underperform’ rating despite the recent share price surge.

Analyst Brendan Carrig argued that Magellan’s funds management business was “still not cheap enough”, and that it might be “too early in the turnaround” to buy just yet, according to The Australian.

With the funds management business trading on about 11.1 times FY25 earnings, the market is already pricing in a recovery, but investment performance hasn’t improved enough to drive a recovery in flows.

Carrig warns that retail outflows might increase in H1 FY25, as a mammoth $3.4 billion of close-ended funds under Magellan’s management is set to become open-ended.

Open-ended funds allow for ongoing and new contributions, whereas closed-ended funds do not allow for new investments. It remains to be seen what effect this will have on Magellan’s assets.

Fund outflows beginning to slow

Magellan shares were in favour this week following an update on the company’s funds under management (FUM) for June. The stock is up more than 7% since Monday.

The latest FUM update showed that new money flows were flat compared to the previous month. Retail investors pulled a net $0.2 billion out in June, but institutional flows were a net positive $0.2 billion.

This brings institutional FUM to $19.6 billion by the end of June.

Insiders have also been active on Magellan shares lately. Deputy Chair Hamish McLennan recently sold nearly $545,000 worth of his shares, more than 60% of his interest in the company.

On the flip side, Director Cathy Kovacs bought $100,000 worth of Magellan shares.

Analysts have mixed views on Magellan shares. Macquarie’s reiterated underperform rating contrasts with UBS’s bullish buy rating and target of $10.25.

Morgans rates the stock as a hold with a target of $9.67. According to CommSec, the consensus of analysts estimates rates Magellan a hold.

Should you buy Magellan shares now?

While the recent price increase and positive FUM trends are encouraging, it’s crucial to consider the mixed analyst views and the potential for increased retail outflows in the near term.

Based on this, it would be wise to watch for further improvements. Either way, remember to conduct your own due diligence and consider your own personal risk tolerances in any decision-making.

The post Up 15% in a month: Are Magellan shares still cheap enough to buy? appeared first on The Motley Fool Australia.

More reading

• Why Clinuvel, Guzman y Gomez, Magellan, and Sandfire shares are charging higher
• Here are the top 10 ASX 200 shares today
• Why Arafura Rare Earths, Magellan, Metro Mining, and Santos shares are racing higher
• Inflows: Magellan shares spike 7% as institutions pile in
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Zach Bristow 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down slightly to 7,828 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Boss Energy Ltd (ASX: BOE)

The Boss Energy share price is down 4.5% to $3.88. This appears to have been driven by a broker note out of Macquarie this morning. Although the broker remains positive on the uranium producer, it has cut its price target by almost 17% from $6.00 to $5.00. Elsewhere, another note out Morgan Stanley reveals that it has held firm with its equal weight rating and trimmed its price target to $4.55. This is due to production ramp up and cost concerns.

DroneShield Ltd (ASX: DRO)

The DroneShield share price is down 3.5% to $1.94. This may have been driven by profit taking from some investors after this counter drone technology company’s shares delivered incredible returns in recent months. In fact, even after today’s weakness, the DroneShield share price is up approximately 400% since the start of the year. This has been driven by impressive sales growth and its very positive outlook thanks to new contracts and industry tailwinds.

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo Interactive share price is down 3% to $16.59. This morning, analysts at Citi initiated coverage on the online lottery ticket seller with a bearish view. According to the note, the broker has slapped a sell rating on the company’s shares with a price target of $15.00. This implies potential downside of approximately 10% from current levels. It believes the market is too optimistic on Jumbo’s earnings and suspects that it could fall short of expectations in FY 2025. Looking further out, it also highlights key renewals that create significant earnings risks in the coming years.

RAIZ Invest Ltd (ASX: RZI)

The RAIZ Invest share price is down over 2.5% to 36.5 cents. This morning, this micro-investing platform provider announced that it would be exiting the Malaysia market. Following the completion of a strategic review, it has agreed with its joint venture partner to close the business. Raiz CEO, Brendan Malone, said: “The decision to close the Malaysian Operations will enable Raiz to focus on strengthening and expanding its Australian business. With our continued product innovation and our marketing campaign, we are confident the Raiz Australian business will continue to grow and deliver a strong economic performance for shareholders.”

The post Why Boss Energy, DroneShield, Jumbo, and Raiz shares are falling today appeared first on The Motley Fool Australia.

More reading

• ‘Geopolitical risk is unlikely to subside’: Should you pile into ASX defence shares right now?
• 5 ASX All Ords shares that rose 250% to 700% in FY24
• DroneShield share price roars to yet another all-time high in 2024 surge
• ASX 200 uranium stock storms higher on first shipment
• Here are the top 10 ASX 200 shares today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro 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 DroneShield, Jumbo Interactive, and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Jumbo Interactive. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investing in ASX Real Estate Investment Trusts (REITs) is a popular strategy for those looking to gain exposure to the property market without the complexities of direct ownership.

The Australian markets are home to a basket of long-standing REITs that have rewarded shareholders with dividends and long-term capital gains.

Although FY24 was a challenging year for the sector, commercial real estate valuations have been marked down, and some ASX REITs saw large share price declines last year.

Not all incurred the same fate, though. Three were standouts. Let’s examine the top-performing ASX REITs of FY24.

Scentre Group (ASX: SCG)

In third place on the list is Scentre Group, which owns and operates Westfield shopping centres in Australia and New Zealand. Its shareholders saw impressive gains coming into the new year.

The ASX REIT hit 52-week closing lows of $2.39 apiece in October. Investors then drove it higher before it peaked at $3.39 on 22 March.

In total, Scentre Group has rallied more than 21% in the last year, a more than 12% advantage over the S&P/ASX 200 Index (ASX: XJO).

In its latest update, Scentre noted that customer visits to its 42 Westfield destinations totalled 175 million in the first nine months of 2024.

Tenant sales reached $6.5 billion in Q1 2024, and its portfolio occupancy is almost full.

Scentre Group anticipates Funds From Operations (FFO) to grow by up to 5.4% in 2024, with distributions expected to increase by at least 3.6%. Distributions are to REITs what dividends are to individual stocks

If correct, this could make the ASX REIT an attractive choice for income-focused investors.

HMC Capital Ltd (ASX: HMC)

The second-best REIT for FY24 was HMC Capital, an alternative asset manager focused predominantly on real estate. It is not structured as an ASX REIT per se but operates two REITs.

HMC completed the acquisition of Payton Capital this month, a private credit fund manager in the commercial real estate space.

This move is the first in HMC’s efforts to establish a $5 billion “diversified private credit asset management platform over the medium-term”.

Macquarie recently upgraded HMC to a buy, setting a price target of $7.97. Meanwhile, consensus rates the ASX REIT a hold, per CommSec.

Goodman Group (ASX: GMG)

In first place as the top-performing REIT for FY24 was Goodman Group.

Goodman’s value grew the most in FY24, with its share price soaring by 73% over the last 12 months.

This global integrated property group focuses on industrial and commercial properties, including warehouses and, more recently, data centres.

According to my colleague James, data centres are in high demand due to the rise of e-commerce and digitalisation – a positive for Goodman shares.

Based on this, Citi rates the ASX REIT a buy with a price target of $40.00 per share.

Barrenjoey recently downgraded Goodman to an underweight rating, citing caution “on the market’s lofty expectations”, according to The Australian Financial Review.

Meanwhile, according to CommSec, consensus rates Goodman a buy. However, the decision is split. Five rate it a buy, 4 a hold, and 2 a sell.

If Citi’s valuation is correct, it signifies an upside potential of more than 13% at the current Goodman price.

Goodman had a market capitalisation of around 66 billion at the end of FY24.

ASX REIT’s continue

Goodman Group, Scentre Group, and HMC Capital represent some of the best ASX REITs of FY24, each offering unique strengths and growth prospects.

Time will tell if these current trends will continue. As always, remember to conduct your own due diligence.

The post Here are the best ASX REITS of FY24 (a $66 billion company grew the most) appeared first on The Motley Fool Australia.

More reading

• Shares vs. property: Which delivered the best growth in FY24?
• 4 excellent ASX 200 blue chip shares to supercharge your investment portfolio
• What this expert predicts will be the best-performing ASX sectors in FY25
• 3 super strong blue chip ASX 200 shares to buy in July
• 3 ASX shares that could create lasting generational wealth

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow 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 Goodman Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Top ASX defence shares have delivered some absolutely eye-watering gains over the past year.

What kinds of gains are we talking about?

Well, over the past 12 months, the All Ordinaries Index (ASX: XAO) has gained a healthy 8%.

Now, here’s how these leading ASX defence shares have performed over that same period:

• Electro Optic Systems Holdings Ltd (ASX: EOS) shares are up 99%
• Codan Ltd (ASX: CDA) shares are up 54%
• AML3D Ltd (ASX: AL3) shares are up 280%
• Droneshield Ltd (ASX: DRO) shares are up 704%

Now those are the kinds of returns you want to see in your portfolio!

What do these companies do?

You may be familiar with these ASX defence shares already.

If not, here’s a quick snapshot of what they do.

Electro Optic Systems has two business divisions: Defence Systems and Space Systems. The company’s products include remote weapon systems and counter-drone technology. Electro Optic Systems recently inked a defence contract with a Western European nation.

Codan develops rugged electronics solutions for government, corporate, and consumer markets worldwide and has contracts with both the military and law enforcement. Among the favourable market fundamentals that the ASX defence share cited in its half-year reports was “increasing global military and defence spend in the Five Eyes Intelligence community.”

AML3D designs and constructs 3D parts using metal additive manufacturing technology. The company recently signed new contracts with the United States Navy.

And Droneshield provides drone detection and disruption solutions to the defence sectors, commercial airports, prisons, and other critical infrastructure. Droneshield has multiple government defence contracts, including with the US.

Can ASX defence shares keep on delivering?

The conundrum with investing in ASX defence shares is that they tend to perform much better during times of high or rising global tensions.

While we ardently hope for world peace to break out, an event that would likely see ASX defence shares sold down, that’s unfortunately not the most likely scenario.

Indeed, in addressing the mid-2024 outlook, Ronald Temple, chief market strategist at Lazard, says bluntly, “Geopolitical risk is unlikely to subside.”

According to Temple:

The war in Ukraine looks nowhere near resolution and … a Trump presidency may inject even more volatility into the geopolitical landscape given uncertainty over his support for European and Asian allies and his plan to broadly raise US tariffs.

Then there’s the potential powder keg in the Middle East as Israel’s battle against Hamas drags on.

Temple notes that, “The risk of expansion of the current hostilities to include an expanded confrontation with Hezbollah has increased meaningfully.”

But the most worrisome conflict the world faces is a potential shooting war between the US and China.

Temple says:

The most consequential geopolitical risk is a confrontation between China and the United States. Ongoing skirmishes in the South China Sea between China and the Philippines appear to be the most likely source of potential near-term conflict.

We fervently hope wiser, calmer heads will prevail and step away from the brink.

Until then, these top ASX defence shares could well continue to deliver market-beating returns.

The post ‘Geopolitical risk is unlikely to subside’: Should you pile into ASX defence shares right now? 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 positions in and has recommended DroneShield and Electro Optic Systems. 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.

The ASX small-cap share end of the market could be an attractive area to invest in according to one fund manager.

All of the great, large businesses of today were small businesses at one point. Of course, not every small business is going to become a big company.

The good, smaller stocks could deliver good returns if they’re able to scale up effectively. Additionally, smaller companies are typically under-researched compared to their larger peers, which can lead to discounted valuations.

Ronald Temple, Lazard‘s chief market strategist, has made a number of interesting observations about where he thinks value is at the moment and what he believes could happen next with markets.

Opportunity for ASX small-cap shares

Temple believes non-US markets are trading on “much less demanding valuation multiples”. Some markets may benefit from accelerating growth while US growth “decelerates”.

He also suggested non-US companies are typically more exposed to floating-rate debt – where the interest rate changes as central bank rates change – which “should benefit them disproportionately” as rate cuts happen outside of the US.

The market strategist also suggested that non-US companies could “enjoy a more significant recovery in revenue and earnings from current levels as their economies were less resilient after the pandemic than the US economy, which benefited from much larger fiscal and monetary stimulus.”

Temple suggests the outlook is shifting, and short-term interest rates are going to head lower, which could lead to reduced earnings for cash, which could be bad news for people over-allocated to cash. He acknowledged some people may be reluctant to invest at, or near, record highs for share markets. What’s the answer? The expert said:

My view is that the best approach is to allocate capital away from cash to riskier assets while identifying those “risky” assets that are less correlated to the most expensive parts of the global equity market (e.g., tech and AI leaders) and instead invest in areas of the market that have more unrecognized upside going forward. These include emerging markets, Japan, small-cap, and infrastructure-related equities.

This could spell good news for ASX small-cap shares.

Expectations for the rest of 2024

Temple outlined a number of thoughts about macroeconomic events that could occur in the second half of 2024. Some of these events could cause volatility for ASX small-cap shares.

He expects US growth and inflation to decelerate, allowing the US Federal Reserve to cut rates in the second half of 2024. A “razor’s-edge” US election could have “significant economic and market implications”.

The market strategist expects China’s housing challenges to persist but with the cumulative effects of stimulus lifting growth. However, the West’s efforts to defend their industries against Chinese competition are expected “to stiffen, adding to elevated tensions over China’s support for Russian aggression in Ukraine.”

Japan’s inflation “normalisation” is expected to persist, leading households to reassess their asset allocation. Finally, slowing inflation in Europe is expected to enable a material easing of interest rates, adding “additional momentum to already-accelerating growth”.

While the prospects look promising for ASX small-cap shares, the market segment is not guaranteed to outperform. But, it’s certainly worthwhile keeping an eye out for exciting ASX small-cap shares, in my opinion.

The post Is it time to jump back into ASX small-cap shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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.