Tag: Motley Fool Australia

Last week, the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) both cracked the 6,000 point mark with ease. With markets continuing to defy odds and seemingly ignoring economic woes, here are 3 ASX 200 shares you could consider buying in July. 

1. Tyro Payments Ltd (ASX: TYR) 

The Tyro Payments share price struggled to make headway in late June. Increasing fears of a second wave of COVID-19, particularly in Victoria, and escalating lockdown measures could be the main drivers of this share price slump. These impact on policy decisions such as expanding restaurant dine-in capacity and allowing stadiums to reopen. This, in turn, could slow the return of normal business activity which is vital for Tyro’s EFTPOS terminal turnover.  

The company has committed to providing the market with weekly transaction value updates. By the end of FY20, Tyro delivered a 15% increase in transactions compared to FY19. From 1 July to 3 July, transaction values were up a significant 40% on the prior corresponding period. I believe Tyro’s numbers are reflecting Australia’s pent-up consumer demand and a slow but steady return to normal. As such, I’m confident the combination of recovering economic activity, a move away from cash and Tyro’s competitive pricing makes it a strong ASX 200 stock to consider buying this month. 

2. Pointsbet Holdings Ltd (ASX: PBH) 

The Pointsbet business has been performing strongly despite the significant disruption of COVID-19 to key sporting leagues such as the NRL, AFL and NBA. The company had previously announced an agreement in Australia to become the exclusive wagering partner for Fox Sports AFL during the 2020 season. Pointbet’s continued strong performance has also been driven by a shift to online gambling, increase in racing turnover and an improvement in the company’s overall product offering leading to a greater share of wallet from existing clients. 

The United States market represents a significant opportunity as more states continue to legalise sports betting. I believe Pointsbet is in a strong position to continue growing its market share and presence in a number of US states. The planned recommencement of key sports such as the NBA, MLB and PGA should also help restore confidence in the Pointsbet share price. 

3. EML Payments Ltd (ASX: EML) 

EML follows a similar narrative to Tyro with improving economic activity and the gradual reopening of shopping malls across various countries. There are many reasons EML could represent a leading ASX 200 recovery stock to buy in July. 

EML’s acquisition of Prepaid Financial Services (PFS) has reduced the company’s dependence on gift cards (particularly shopping centre gift cards) for revenue. EML’s general purpose reloadable (GPR) business, which includes products such as salary packaging, digital banking products and gaming, now represents more than 50% of its revenues. This is the first time in the company’s history that it is deriving the majority of its revenue from GPR programs. The renegotiated acquisition terms of PFS now places EML in a better capital position with $125m in cash as at 30 April 2020. I believe an improvement in economic activity and the company’s strong balance sheet make it a strong buy case at today’s prices.

More reading

• Why Electro Optic Systems, Mayne Pharma, Tyro, & WAM Leaders are racing higher
• 10 more top broker ASX share picks for FY21
• ASX 200 closes 0.4% higher, Cochlear share price up 6%
• Why Lovisa, PointsBet, Transurban, & WiseTech shares are racing higher
• PointsBet share price zooms 5% higher on Detroit Tigers deal

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd and Tyro Payments. The Motley Fool Australia owns shares of and has recommended Emerchants Limited. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you don’t currently have sufficient funds to invest across a large number of different shares, then exchange traded funds (ETFs) could be the answer.

ETFs allow you to invest in a particular theme, index, or industry through just a single investment.

There are countless ETFs out there for investors to choose from, but three of my favourites are listed below. Here’s why I like them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF could be a top option for ASX investors. This fund tracks the performance of an index of the 50 largest technology and online retail companies that have their main area of business in Asia (excluding Japan). These companies are among the fastest-growing in the region and look exceptionally well-positioned to be market-beaters over the next decade. Among its biggest holdings you’ll find the likes of Alibaba, Baidu, JD.com, and Tencent.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another exchange traded fund which I think has the potential to outperform the ASX 200 is the BetaShares NASDAQ 100 ETF. As you might have guessed from its name, this exchange traded fund gives investors exposure to the 100 largest businesses on Wall Street’s technology-focused NASDAQ index. As a result, through a single investment investors will be getting a slice of tech behemoths such as Amazon, Apple, Alphabet, Facebook, Microsoft, and Netflix. Other notable holdings include Starbucks, Tesla, and Zoom.  

iShares Global Healthcare ETF (ASX: IXJ)

A final exchange traded fund to consider buying is the iShares Global Healthcare ETF. I think this is a great option for investors that are looking for exposure to the healthcare sector. This is because this exchange traded fund gives investors access to many of the biggest and brightest healthcare companies in the world. This includes CSL Ltd (ASX: CSL), Johnson & Johnson, Novartis, Ramsay Health Care Limited (ASX: RHC), and Sanofi. Given the positive outlook for the healthcare sector over the next couple of decades due to ageing populations and increased chronic disease, I believe it could provide strong returns for investors,

More reading

• Why I sold this ASX ETF last week
• Where to invest $20,000 into ASX shares for market-beating returns
• Where to invest $10,000 into ASX shares in July
• Where I would invest $10,000 into ASX shares in FY 2021
• Here are 2 easy ways to invest in quality international shares on the ASX

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 BETANASDAQ ETF UNITS and CSL Ltd. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS, Ramsay Health Care Limited, and Sonic Healthcare 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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On Tuesday, the Magellan Financial Group Ltd (ASX: MFG) share price has risen by more than 3% to $64.39 per share at the time of writing. The share price gains came off the back of Magellan’s most recent funds under management update. 

What was in the announcement?

The announcement detailed Magellan Financial Group’s most recent funds under management. In June, Magellan saw net fund inflows of $249 million. This included net retail inflows of $173 million along with net institutional inflows of $76 million.

The group reported that its average funds under management were $95.5 billion for the year ended June 30 2020. This was a 26% increase on the year ended 30 June 2019, which saw average funds under management of $75.8 billion.

The announcement also revealed that in July, Magellan will pay distributions of approximately $650 million. This will be reflected in the next month’s funds under management announcement. 

The company estimates that it will receive performance fees of approximately $81 million for the year ended 30 June 2020.

How has Magellan performed recently?

Magellan Financial Group is a fund manager that invests in global equities and global infrastructure. It has offices in Australia, New Zealand and the US and manages more than $97 billion. Magellan has 34 experienced investment professionals on its staff.

Magellan invests in what it names “the world’s best companies”. It has over 10 listed and unlisted equities and infrastructure funds.

In June, Magellan launched its fourth ETF product, the Airlie Australian Share Fund, which is intended to bring together the features of an unlisted fund and active ETF into a single unit in a single fund.

Magellan now has over $2.5 billion in ETF funds under management and 35,000 ETF unit holders.

For the half year to 31 December 2019, Magellan had a net profit after tax of $216.8 million. This was a 12.8% increase on the same period in the prior year. Performance fees for the half year to December 2019 were $41.7 million.

The Magellan share price is up 110% from its 52 week low of $30.10. It has returned nearly 9% since the beginning of the year and is up 17.87% since this time in 2019.

More reading

• Why Australian Ethical, Magellan, St Barbara, & Sezzle shares are zooming higher
• 5 things to watch on the ASX 200 on Friday
• This ASX fund manager is still ultra-bearish on shares
• How I’d build a $100,000 portfolio for ASX dividend shares
• Top brokers name 3 ASX shares to sell right now

Motley Fool contributor Chris Chitty 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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The BHP Group Ltd (ASX: BHP) share price is rallying even after a broker downgrade, although the same can’t be said for two other ASX stocks that got the chop.

Shares in the Big Australian jumped 1.8% during lunch time trade to $36.29 when the S&P/ASX 200 Index (Index:^AXJO) climbed 0.7%.

Its outperformance comes despite Credit Suisse’s move to lower its recommendation on the UK and ASX-listed miner to “neutral” from “outperform”.

Well positioned but fully priced

It’s the strength of its balance sheet and the relatively positive outlook for iron ore that is probably keeping investors onside. Such qualities are hard to find in an increasingly uncertain world due to the COVID-19 outbreak.

But Credit Suisse doesn’t believe these positive attributes are enough to keep the stock as a “buy” after the recent rally in the BHP share price.

“We still regard BHP’s balance sheet as being robust and see little risk to dividends with FY20E yields at 5%,” said the broker.

“However, we think yields are no longer attractive enough to serve as a trigger to push the stock price higher.”

Credit Suisse’s price target on BHP is $37 a share.

Unconstructive headwinds

But the Lendlease Group (ASX: LLC) share price wasn’t quite as lucky. Shares in the engineering and construction group tumbled 2.8% to $12.31 at the time of writing after JP Morgan cut its recommendation to “neutral” from “overweight” today.

The broker pared its enthusiasm for the stock as it believes its construction division is likely to face earnings headwinds.

“Lendlease last week recognized a A$260m EBITDA loss (JPMe) in 2H20 for construction,” said JP Morgan.

“We revise down our forecast construction earnings, assuming lower-than-normal productivity for the next six months, a decline in backlog revenue for the next two years, as market-wide construction in resi and commercial is assumed to decline (typically 50% of book), and some moderation in segment margins.”

The broker’s 12-month price target on the stock is $13.50 a share.

Makings of a poor trade

Another stock to fall on a downgrade is the ASX Ltd (ASX: ASX) share price, which fell 0.9% to $86.59.

UBS cut its rating on the stock to “sell” from “neutral” after shares in our share market operator outperformed and has recovered all its losses from the COVID-19 bear market.

The stock was lifted by an increase in share trading activity from retail investors and a large number of capital raisings.

“Despite this, ASX’s key Derivatives segment has been an area of weakness with volumes -12% on pcp in 2H (June -28%) with our Futures volume regression analysis pointing to further growth headwinds into FY21E (UBSe +0% in FY21E),” said UBS.

“Given delays to its CHESS replacement (now slated April-22), project spend may remain elevated near term.

“While ASX offers a defensive 2.6% dividend yield, its 33.7x 12mth forward PE (UBSe) is at odds with its more moderate medium-term growth outlook.”

The broker’s price target on the stock is $75 a share.

More reading

• These 2 ASX medical shares are on the rise after major announcements
• Here’s what ASX investors need to know about the RBA’s rate decision today
• Leading brokers name 3 ASX 200 shares to sell today
• Where to invest $1,000 in ASX tech shares today
• Why these ASX tech shares should be on your radar

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited. 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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ASX medical shares have been in the spotlight lately, with 2 dropping major announcements yesterday. Mesoblast Limited (ASX: MSB) and Mayne Pharma Group Ltd (ASX: MYX) both saw share price bounces yesterday following their announcements, which look set to expand distribution of their products. 

What did Mesoblast announce?

Mesoblast announced its stem cell medicine Remestemcel-L will be available for compassionate use to treat children with COVID-19 in the United States. The product will be made available under an expanded access protocol, which allows patients with an immediately life threatening condition to gain access to an investigational medical product. 

Remestemcel-L will be used to treat COVID-19-infected children with complications of multisystem inflammatory syndrome (MIS). It has previously been used in children with graft versus host disease which provides a body of safety and efficacy data. This data suggested the product might be of therapeutic benefit in patients with MIS. The use of the treatment in children extends the potential application of this stem cell therapy beyond adults with severe acute respiratory distress syndrome. 

The Mesoblast share price was up over 11% yesterday following the announcement, although today it has dropped back by 3.47% to $3.62 per share at the time of writing. Recent rises in the Mesoblast share price have led to it joining the S&P/ASX 200 Index (ASX: XJO) in the most recent quarterly rebalance. The company reported in June that Remestemcel-L led to improved outcomes in patients with inflammatory lung diseases. 

What did Mayne Pharma announce?

Yesterday, Mayne Pharma announced a new supply agreement for US generic oral contraceptive products. The agreement covers 13 products, including 5 not previously marketed by Mayne Pharma. Four of the additional products are FDA approved and include generic equivalents of the 2 highest prescribed oral contraceptive products in the US. 

Mayne Pharma reports that the annual US market sales for the 5 new products are US$500 million. Investors approved of the deal, sending the Mayne Pharma share price nearly 4% higher yesterday and another 2.82% higher today to 44 cents per share. 

Commenting on the deal, CEO Scott Richards said: “this transaction expands our women’s health portfolio and secures supply on more favourable terms.”

Mayne has been seeking to optimise its supply network to improve product costs and add complementary generic products. This latest agreement ticks both those boxes. 

Foolish takeaway

ASX medical shares Mesoblast and Mayne Pharma are making promising advancements in their respective markets, which investors are betting will lead to long-term results. 

More reading

• Why brokers have just downgraded BHP and these ASX stocks today
• Here’s what ASX investors need to know about the RBA’s rate decision today
• Leading brokers name 3 ASX 200 shares to sell today
• Where to invest $1,000 in ASX tech shares today
• Why these ASX tech shares should be on your radar

Motley Fool contributor Kate O’Brien owns shares of Mayne Pharma Group Limited. 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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Investors search for quality companies. Customers search for quality goods and services. All investors are also customers. This is why many investors look to their own spending patterns to identify potential investment opportunities. Have you started using buy now, pay later (BNPL) services such as Afterpay Ltd (ASX: APT)? Do you shop at one of the major supermarket outlets? 

Looking at your own spending habits can lead you to the ASX shares behind the products and services you use. If you love a particular brand or product, take a look at the company behind it – it could be a fruitful investment opportunity. In fact, you’re probably already a customer of multiple ASX shares. Here we take a look at 3 of them. 

Afterpay 

Afterpay is the largest of the BNPL providers on the ASX by market capitalisation. The Afterpay share price dropped to a low of $8.90 in the March correction, but has since posted a huge comeback, gaining 658% to trade at $67.50. Based on recent share price rises, the company is close to joining the S&P/ASX 20 (ASX: XTL). 

Operating in Australia, Zealand, the United States and the UK, Afterpay extends credit to customers, allowing them to make purchases that are paid off in fortnightly instalments. According to research by Roy Morgan, BNPL services such as Afterpay had been used by nearly 2 million Australians in September last year, double the number the previous year. 

According to a report by Worldpay, the BNPL sector will have doubled its market share to 4 million users, or 1 in 5 Australians by 2023. Afterpay reported it had 3.2 million active customers in Australia and New Zealand in March 2020, a 21% increase over the 2.6 million it had in March 2019. The United States and UK are considered key growth markets for the company. In May Afterpay reached 5 million customers in the US and last month it hit 1 million customers in the UK. 

Despite its massive market capitalisation, it is worth remembering that Afterpay is not yet profitable. In 1H FY20 Afterpay recorded $4.8 billion in underlying sales, which gave it a total income of $212.2 million, a 105% increase on 1H FY19. Nonetheless the company recorded a statutory loss after tax of $31.6 million, although this was impacted by one-off and non-cash items. Profitability should come as Afterpay increases active customers numbers and transaction volumes. By FY22, Afterpay is aiming for +$20 billion in transaction volumes. 

Coles Group Ltd (ASX: COL)

Coles is ubiquitous as the second largest supermarket group in Australia. If you don’t shop at Woolworths Group Ltd (ASX: WOW), chances are you shop at Coles. The company is behind some 2,500 retail outlets nationally, including 800 supermarkets, 900 liquor stores, and more than 700 fuel and convenience retailers. 

Given the essential nature of the goods Coles sells, its share price was relatively resilient in the March downturn. The Coles share price fell 17% from a February high of $17.17 to a low of $14.21 in March, but has since recovered and is currently trading at $17.16. The onset of coronavirus resulted in panic-buying and stockpiling, which boosted Coles’ sales. Beyond this, Australians continue to spend more time living and working from home, resulting in increased demand for household products. 

Coles reported a 12.9% increase on third quarter sales with revenue rising to $8.32 billion. Supermarket sales increased by 13.8%, the division’s 50th consecutive quarter of comparable sales growth. Liquor sales rose by 7.2% and express sales by 4.3%. Coles Online sales revenue grew by 14% in the third quarter, despite home delivery being temporarily suspended in March. 

According to Roy Morgan, Coles has 26.6% market share of the Australian grocery market. This makes Coles shares a defensive staple, despite operating in one of the most competitive industries in Australia. Revenue for the grocery industry is predicted to grow by 4.6% in 2019–20, up from 2.3% thanks to the COVID-19 pandemic. Nonetheless, price competition from competitors such as Aldi had led Coles to expand its private-label product range, with more than 260 products added in the third quarter. 

Adairs Ltd (ASX: ADH)

Adairs is a leader in the Australian homewares space, a sector that has benefitted from consumers spending more time at home. Adairs retails everything from bed linen to houseplants, with a strong online presence that customers took advantage of during lockdown. 

Many Australians are upgrading home furnishings and manchester as a result of spending more time at home. This was evident in Adairs latest trading update, which saw sales growth despite the closure of stores between March and May. In the 24 weeks to 14 June 2020, store sales increased 5.3% and online sales by a massive 92.6%. The surge in online sales saw total sales growth of 27.4% for the half year to 14 June and 15.7% for the 50 weeks to 14 June. 

In the update, Adairs managing director Mark Ronan stated:

Our omni channel strategy and focus on the home decorating and furnishings category has served us well during this period where our customers have spent significantly more time at home. Since Adairs stores re-opened we have seen strong sales across both the store network and online channel as customers return for the in store service and experience they expect from Adairs.

Last year, Adairs acquired online furniture retailer Mocka, which also saw a surge in sales during lockdown. Mocka’s sales were up by 52.1% in the 24 weeks to 14 June 2020. Over FY20, Mocka is expected to contribute $27–$28 million in sales, representing sales for the 30 weeks it has been under Adairs ownership. 

The Adairs share price was rocked in the March correction but has since staged a strong recovery. The share price fell 80% from a high of $2.62 in February to a low of 50 cents in March, but has since surged 388% and is currently trading at $2.44. Full year results will be released next month, however Adairs has provided sales guidance of $385 million to $390 million. 

More reading

• Afterpay’s founders are selling shares. Should you?
• Why retirees should buy Coles and Telstra shares for income
• Leading brokers name 3 ASX 200 shares to sell today
• ASX 200 up 0.1%: Afterpay announces capital raising, big four banks lower ahead of RBA meeting
• Does Afterpay have a competitive advantage?

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO, COLESGROUP DEF SET, and Woolworths 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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The Appen Ltd (ASX: APX) share price has been on form again on Tuesday and charged higher.

The shares of the global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence (AI) have climbed 3% to hit a new record high of $36.90.

This latest gain means that Appen’s shares have now rocketed 135% higher since hitting a 52-week low of $15.70 in March.

Is it too late to buy Appen shares?

Based on the current Appen share price, I estimate that its shares are changing hands at approximately 43x FY 2021.

While this is certainly a premium to the market average and does mean they carry a lot of risk, I still see a lot of value in Appen’s shares for long-term focused investors.

Last year a company presentation advised that the AI market is expected to grow to be worth between US$169 billion and US$191 billion per annum by 2025.

This puts Appen in a particularly strong position for growth, because an estimated 10% of spending in this market goes towards data labelling. That means Appen’s addressable market could be worth US$17 billion to US$19 billion in five years.

This is materially more than the revenue of $536 million it generated in FY 2019.

And given the company’s leadership position in the market and its high quality customer base, I believe it is well-positioned to grow its market share strongly over the next decade.

Especially following the acquisition of Figure Eight. This business has a strong position in the government sector and looks well-placed to capture a slice of growing government spending on AI.

For example, Appen has previously noted that the US government has a US$5 billion AI budget and the UK government has a £2.3 billion AI budget.

Foolish Takeaway.

Although Appen’s shares are not cheap, I believe its extremely positive long-term outlook justifies the premium.

As a result, I think they would be great buy and hold options along with fellow tech shares Altium Limited (ASX: ALU) and Xero Limited (ASX: XRO).

More reading

• Why CSL and these ASX 200 shares could be fantastic buy and hold options
• 3 of the best ASX tech shares to buy in July
• 2 fantastic ASX tech shares to buy and hold
• Why I would buy Appen and this ASX growth share right now
• What’s next for WAAAX 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 and Xero. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If the stock and currency markets were hoping to get some direction from the Reserve Bank of Australia (RBA) this afternoon, they would be left disappointed.

The  S&P/ASX 200 Index (Index:^AXJO) didn’t react to the RBA’s interest rate decision while the Australia dollar barely blinked as it stayed around 69.6 US cents.

Rates effectively at zero

The central bank held the official cash rate steady at a record low of 0.25% and left its targeted yield on the three-year Australian government bond at the same level.

Given that interest rates can’t go lower, especially not when the RBA already ruled out negative rates here, what else could governor Philip Lowe do?

But this doesn’t mean there weren’t a few interesting takeaways for ASX investors from Dr Lowe’s monetary statement.

RBA just as confused as the rest

What stood out the most this time was that the RBA looked as clueless about the economic outlook as the rest of us.

The statement highlighted the “severe downturn” in the global economy due to the COVID-19 pandemic and the sharp rise in unemployment.

It then highlighted recent positives like how leading indicators have turned up, signalling that “the worst of the global economic contraction has now passed”.

But it wasn’t ready to say anything more substantive about the outlook for the Australian economy except that the road ahead will be “bumpy” and will depend on the containment of the coronavirus.

Tell us something we don’t know already! No wonder currency and equity investors were so unmoved.

What did take me by surprise is that the RBA didn’t push the government to keep stimulus measures in place like it did in its last statement.

Given that Federal Treasurer Josh Frydenberg is scheduled to give an update on this issue in two weeks, I thought this would be an opportune time for the RBA to say something more.

Flushed with cash

The second takeaway is more encouraging. Our bond market is functioning well despite the COVID-19 hit to global markets.

It’s working so well that the RBA didn’t have to pull its quantitative easing (QE) trigger again by buying Australian government bonds. The board also believes it’s providing more than enough cash to the broader financial system.

This is good news as it shows that there is enough liquidity to keep the gears turning in the Australian economy.

Implications for ASX bank stocks

Perhaps the bigger takeaway for investors is that ASX banks like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have sufficient access to capital to keep lending.

The abundance of liquidity won’t help overcome bad debt worries that weighing on ASX banks, nor will it make it easier for Aussies without stable income from borrowing, but it’s at least one less thing bank shareholders will need to fret about.

More reading

• Leading brokers name 3 ASX 200 shares to sell today
• Where to invest $1,000 in ASX tech shares today
• Why these ASX tech shares should be on your radar
• 3 quality ASX shares to buy right now with $3,000
• 2 exotic ETFs for your ASX portfolio

Motley Fool contributor Brendon Lau owns shares of Commonwealth Bank of Australia and Westpac Banking. Connect with me on Twitter @brenlau.

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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Rather than leaving a spare $5,000 sitting in a bank account, I would suggest investors put their money to work in the share market.

After all, as small an investment as it might seem, on a long enough time horizon a $5,000 investment can grow into something significant.

According to Fidelity, the Australian share market has provided an average annual return of 9.2% in the 30-year period between 1990 and 2020. That means a single $5,000 investment in 1990 would have grown to be worth a massive $70,000 today.

With that in mind, here’s where I would invest $5,000 today:

a2 Milk Company Ltd (ASX: A2M)

Demand for a2 Milk’s infant formula from Chinese consumers has been growing at a rapid rate in recent years. This has led to the infant formula and fresh milk company delivering stellar earnings growth. And while its growth is likely to moderate in the coming years, I still expect it to be at a level that most companies would be envious of. Especially given its modest market share in China and expanding fresh milk footprint. Furthermore, the company could accelerate its growth inorganically if it chooses to put its hefty cash balance to work. There is speculation it could make an acquisition or launch a new product in the near term.

Ramsay Health Care Limited (ASX: RHC)

I think this private hospital operator would be a fantastic buy and hold investment option. Although trading conditions are admittedly tough at present and its growth is likely to be subdued in the near term, I’m very positive on its longer term outlook. This is because, as the global population ages, I believe demand for healthcare services will increase substantially. I feel this puts Ramsay and its expansive global network of private hospitals in a strong position to deliver solid earnings growth for decades to come.

More reading

• Is the Ramsay Health Care share price a buy?
• Why I would buy a2 Milk and this ASX growth share right now
• Here’s how to play China’s V-shaped growth story
• Why I would buy Appen and this ASX growth share right now
• Why I would buy and hold a2 Milk and this ASX 200 share until 2030

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Do you have $5,000 to invest? Here are the ASX shares I would buy right now appeared first on Motley Fool Australia.

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I don’t really like selling ASX shares. For the entirety of my investing career, I have been a net buyer of shares (and sometimes a net holder), but never a net seller. The great investor Warren Buffett once told us that his favourite holding period for a share is ‘forever’. This is a sentiment I share.

But last week, I did sell one of my investments. It wasn’t an easy decision, and the inevitable has happened in that those shares have now appreciated far beyond my selling price. But I sold all the same and I’m glad I did.

The share I sold was the iShares Asia 50 ETF (ASX: IAA).

What is the iShares Asia 50 ETF?

The iShares Asia 50 is an exchange-traded fund (ETF) that holds 50 of the largest companies across the Asian region, according to the S&P Asia 50 Index. Its largest exposure is to China, but it also holds companies from South Korea, Taiwan, Hong Kong and Singapore. Its largest individual companies include Tencent Holdings, Samsung, and Taiwan Semiconductor Manufacturing Company.

Why did I sell this ASX ETF?

I sold my position in the IAA ETF for 2 reasons.

Firstly, I think it’s prudent right now to increase the cash position in my portfolio. The ASX, as well as global share markets, have had an incredible run since the lows we saw in March. IAA’s largest holding, Tencent, has run up more than 20% in the last month alone, which was an orange flag for me. This ETF was therefore one holding I was happy to take some profits on and use to bump up the cash position of my portfolio as part of a risk management strategy.

Secondly, there’s an ETF that I prefer over IAA. I think exposure to emerging markets like China and Taiwan is important in a 21st-century portfolio. But IAA doesn’t include some of Asia’s biggest names in tech, like Alibaba, Baidu, iQiYi and JD.com.

However, the BetaShares Asia Technology Tigers ETF (ASX: ASIA) does, as it uses a slightly different index as its benchmark. For this reason, I think ASIA is better placed than IAA to capture the value that emerging markets can bring to the table over the next few years .

As such, it’s my intention to eventually redeploy my capital from the IAA sale into the ASIA ETF. But I’m in no rush at the current prices and am happy to sit on my gains from this sale until the markets take a chill pill and come back from their current levels.

More reading

• Where to invest $20,000 into ASX shares for market-beating returns
• Here are 2 easy ways to invest in quality international shares on the ASX
• Add some diversity to your portfolio with these quality ETFs
• Why ETFs are great for passive investing
• I don’t normally buy ETFs, but I would buy these 2

Motley Fool contributor Sebastian Bowen owns shares of Baidu. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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