Tag: Motley Fool Australia

If you’re looking to boost your income with dividend shares, then you’re in luck.

The Australian share market has a good number of quality options for investors to choose from right now.

But which ones should you buy? Three of my favourite dividend shares are listed below:

BWP Trust (ASX: BWP)

BWP Trust is the largest owner of Bunnings Warehouse sites in Australia. It has a portfolio of 68 stores leased to the hardware giant and seven other retail showrooms. Pleasingly, thanks to the strength of the Bunnings business, the trust appears to have been unaffected by the pandemic and continues to collect rent as normal. As a result, it was able to provide a distribution estimate this week. It intends to declare a 9.27 cents per unit final distribution, which will bring its full year distribution to a total of 18.29 cents per unit. This equates to a 4.5% distribution yield.

Rural Funds Group (ASX: RFF)

Another dividend share for income investors to consider buying is Rural Funds. I think the agriculture-focused property group could be a great option due to its high quality property portfolio, periodic rental increases, and its lengthy tenancy agreements. In respect to the latter, at the end of the first half Rural Funds’ weighted average lease expiry stood at 11.5 years. I believe this gives it great visibility with its future earnings. In FY 2021 the company intends to lift its distribution to 11.28 cents per share. This works out to be a forward 5.6% distribution yield.

Telstra Corporation Ltd (ASX: TLS)

I think this telco giant is a great dividend share to buy. I’m a big fan of Telstra due to its improving outlook, defensive business, and generous yield. In respect to the former, I’m confident that a return to growth isn’t too far away thanks to the easing of the NBN headwind, its significant cost cutting program, and the arrival of 5G internet. Positively, in the meantime, I believe Telstra’s free cash flow will be sufficient to maintain its 16 cents per share dividend for the foreseeable future. This represents a fully franked 5.1% dividend yield. 

More reading

• Can 5G help push the Telstra share price higher by 2021?
• Why I would buy CBA and these ASX dividend shares
• 3 robust ASX dividend shares you need to own
• Ready to invest $5,000? I’d buy these ASX dividend shares today
• Why I think the Telstra share price could hit $4 in 2020

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

The post Why I think Telstra and these ASX dividend shares are strong buys appeared first on Motley Fool Australia.

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Every investor is on the lookout for bargain buys right now, but one ASX share that I’m not hearing much about is Qube Holdings Ltd (ASX: QUB).

What does Qube Holdings do?

Qube is Australia’s largest logistics provider and operates as a specialised integrated port services provider across Australia, New Zealand and South East Asia.

Qube has over 130 locations and more than 6,500 employees with a market capitalisation of over $5 billion.

That demonstrates an established (and successful) business to me, but why could Qube shares make you rich in 2020?

Why Qube Holdings shares could be in the buy zone

Part of the reason I’m looking at Qube Holdings shares is due to the coronavirus pandemic.

The shutdowns and border closures related to the pandemic in February and March hit the Qube share price hard.

In fact, the company’s shares went from a 52-week high to a 52-week low in the space of 2 months. In doing so, Qube’s value per share more than halved to just $1.64 per share.

While many S&P/ASX 200 Index (INDEXASX: XJO) constituents fell in that bear market, investors wear particularly bearish on logistics. There were concerns that supply chain disruptions would leave logistics providers like Qube without much business in 2020.

That hasn’t proven to be the case (so far). In fact, Qube Holdings shares have rocketed more than 50% higher since 23 March.

But I think looking at past growth just isn’t a wise strategy. In my mind, Qube has some huge growth potential as a disruptor in the logistics space.

I think Qube could be at the forefront of technological change and automation across Australia. That was highlighted to me by the group’s new warehouse automation project with Woolworths Group Ltd (ASX: WOW).

Woollies and Qube are set to spend at least $1.1 billion on the automated distribution centre in Sydney. Unfortunately, that means jobs are set to go at Woolworths. But what does it mean for Qube?

I think a strong execution on the Woollies facility could send Qube Holdings’ shares climbing higher in 2020. What’s more, it could be just the first of many automation projects that Qube gets involved in if it continues at its current pace.

Foolish takeaway

No one knows what’s ahead for the economy or ASX shares in 2020. However, I like the look of Qube Holdings shares at their current price given what I see as strong growth prospects in the short to medium term.

More reading

• 5 things to watch on the ASX 200 on Friday
• In today’s market, should you buy ASX shares, buy gold, or hold cash?
• ASX 200 drops 2.5%, ASX travel shares dumped
• The BHP share price has jumped 40% higher in the last 3 months
• Top brokers recommending you buy these ASX shares in this market sell-off

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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 Freedom Foods Group Ltd (ASX: FNP) share price won’t be returning to trade any time soon after the diversified food company requested that its shares be suspended for 14 days.

Freedom Foods made the request while it further investigates its financial position following the sudden exit of its CEO and CFO this month.

What is happening at Freedom Foods?

As well as requesting the suspension of its shares, Freedom Foods provided an update on several corporate matters.

One of these was its inventory position. After writing down the carrying value of its inventory at the end of May by $25 million, the company has been further analysing its stock.

The company advised that this analysis suggests the need for further write downs to reflect the provisioning for obsolete stock, out of date stock, and product withdrawals. This is expected to lead to an additional write-down of $35 million, bringing the aggregate inventory write down for FY 2020 to ~$60 million.

Freedom Foods is also looking into inventory held outside the country to see if that needs to be written down.

In addition to this, the company notes that it has become aware that the initial estimate did not include inventory write-offs related to FY 2020 product withdrawals and deletions and accounting matters relating to costs of goods carried forward as a capital item that should have been included as cost of sales. This matter requires further investigation.

Doubtful debts.

Freedom Foods has also been looking into its doubtful debts. It has found that further bad debt provisioning is required and a reversal of prior period revenue recognition will be necessary in FY 2020.

This is expected to impact its EBITDA by approximately $10 million. Though, the company acknowledged that it may also be necessary to include adjustments to the timing of revenue that was reported in prior periods and debtor balances in the balance sheet.

And finally, the company has been looking into its employee share plan and found issues. It expects to incur a charge of $5.9 million after the issue of employee options were not completed.

Foolish Takeaway.

Overall, this is a very surprising and messy situation financially. Shareholders will no doubt be seeking answers to how this was able to happen.

More reading

• ASX 200 finishes higher, Afterpay hits new record
• Freedom Foods share price drops 14% as CEO goes “on leave”
• Short-sellers are stepping up their attack against these popular ASX shares
• 3 top ASX shares for growth, income, and value investors to buy today
• Can you get rich by investing $5,000 a year into ASX shares?

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

The post Here’s why the Freedom Foods share price will be suspended for 14 days appeared first on Motley Fool Australia.

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On Thursday the S&P/ASX 200 Index (ASX: XJO) was out of form and sank notably lower. The benchmark index fell a sizeable 2.5% to 5,817.7 points.

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

ASX 200 expected to rebound strongly.

The ASX 200 looks set to finish the week on a high after a strong night of trade on Wall Street. According to the latest SPI futures, the benchmark index is expected to open the day 69 points or 1.2% higher this morning. On Wall Street the Dow Jones rose 1.2%, the S&P 500 climbed 1.1%, and the Nasdaq index also rose 1.1%.

Bank shares to rise.

It looks likely to be a better day of trade for Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks. This follows a very positive night of trade for U.S. bank stocks, which played a key role in driving the major indices higher. The likes of Bank of America, JPMorgan, Citi, and Wells Fargo all climbed more than 3%.

Oil prices jump.

Energy producers Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could push higher on Friday after oil prices rebounded. According to Bloomberg, the WTI crude oil price is up 2.8% to US$39.09 a barrel and the Brent crude oil price is 3% higher at US$41.50 a barrel. Better than expected U.S. economic data gave oil prices a boost.

Qantas $1.9 billion equity raising.

The Qantas Airways Limited (ASX: QAN) share price could return from its trading halt this morning. The airline operator requested the halt on Thursday while it undertakes a $1.9 billion equity raising. This comprises a $1.4 billion fully underwritten placement to institutional investors and a $500 million share purchase plan. Qantas is raising the funds at $3.65 per share, which represents a 12.9% discount to its last close price.

Gold price largely flat.

Gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch today after the gold price traded mostly flat. According to CNBC, the spot gold price is down ever so slightly to US$1,773.80 an ounce.

More reading

• In today’s market, should you buy ASX shares, buy gold, or hold cash?
• ASX 200 drops 2.5%, ASX travel shares dumped
• The BHP share price has jumped 40% higher in the last 3 months
• Top brokers recommending you buy these ASX shares in this market sell-off
• Transurban Group and 1 other ASX share I’d buy in another share market crash

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

The post 5 things to watch on the ASX 200 on Friday appeared first on Motley Fool Australia.

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Are you looking to add a few dividends shares to your portfolio? Then take a look at the three shares I have picked out below.

All three offer above-average yields and look well-placed to grow their dividends over the coming years. They are as follows:

Aventus Group (ASX: AVN)

Aventus is a retail property company specialising in large format retail centres across Australia. In total, the company has a portfolio of 20 centres which are home to a diverse tenant base of 593 quality tenancies. These include many of the largest retailers in the country, with a high weighting towards everyday needs. I think this leaves Aventus well-placed for growth over the coming years. For now, Goldman Sachs recently forecast a ~17.3 cents per unit distribution in FY 2021. This equates to a massive forward ~8.1% distribution yield.

Fortescue Metals Group Limited (ASX: FMG)

Another top dividend share I would buy is Fortescue Metals. I think it is a great option because of the high prices that iron ore is commanding at present due to supply disruptions and robust demand. Combined with its improving production grades and low cost operations, Fortescue is currently generating high levels of free cash flow. I expect the majority of this to be returned to shareholders in the form of dividends in FY 2020 and FY 2021. As a result, I estimate that its shares currently provide investors with a forward fully franked dividend of at least 6%.

Macquarie Group Ltd (ASX: MQG)

A third and final ASX dividend share to consider buying right now is Macquarie. I think the investment bank is a great option for investors wanting exposure to the banking sector but are not keen on the big four. This is because it is a very different beast to the big four and generates its revenue from a wide range of channels. And while it won’t be immune from the pandemic, I believe it will bounce back strongly once the crisis passes. This could make it well worth snapping up shares with a long term view. At present, I estimate that its shares provide a partially franked forward yield of 3.9%.

More reading

• Add some diversity to your portfolio with these quality ETFs
• Top brokers recommending you buy these ASX shares in this market sell-off
• Why the risk of a market correction for the ASX 200 is rising
• Where to invest $10,000 in ASX 200 shares for 2030
• Ready to invest $5,000? I’d buy these ASX dividend shares today

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

The post These top ASX dividend shares could be great option for income investors appeared first on Motley Fool Australia.

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If you’re looking for a quick way to diversify your portfolio, then exchange traded funds (EFTs) could be the answer.

These financial instruments give investors exposure to a wide range of themes, countries, indices, and sectors through just a single investment.

But which ones should you buy? Three top ETFs that I like are listed below:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at buying is the BetaShares Asia Technology Tigers ETF. This ETF allows investors to gain exposure to a portfolio of exciting tech shares that are revolutionising the lives of billions of people in Asia. I believe the majority of these companies are well-placed for growth over the next decade and beyond. Included in the ETF are the likes of search engine company Baidu, ecommerce giants Alibaba and JD.com, electronics behemoth Samsung, and WeChat owner Tencent. 

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ETF which I think could provide strong returns for investors over the next decade is the BetaShares NASDAQ 100 ETF. As its name implies, this ETF provides investors with exposure to the 100 largest non-financial shares on the NASDAQ index. This includes giants such as Amazon, Facebook, and Microsoft. These companies have been growing at a very strong rate over the last decade and look well-placed to continue their positive form over the next 10 years. In light of this, I think the BetaShares NASDAQ 100 ETF could be a great addition to most portfolios today.

VanEck Vectors Australian Banks ETF (ASX: MVB)

Another option to consider is the VanEck Vectors Australian Banks ETF. I think this ETF is perfect for investors that want exposure to the banking sector but can’t decide which bank to buy. This is because this ETF gives investors access to all of the big four banks and also the regional banks and investment bank Macquarie Group Ltd (ASX: MQG). And given the dividends that these shares pay, I expect it to provide a generous yield in the region of 5% in FY 2021.

More reading

• These top ASX dividend shares could be great option for income investors
• Where I would spend $2000 on ASX shares right now
• Top brokers recommending you buy these ASX shares in this market sell-off
• Why the risk of a market correction for the ASX 200 is rising
• Ready to invest $5,000? I’d buy these ASX dividend shares today

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. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF and Macquarie Group Limited. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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 Add some diversity to your portfolio with these quality ETFs appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (INDEXASX: XJO) was hammered 2.5% lower on Thursday as ASX travel and oil shares were hit hard.

The big share market move came as the International Monetary Fund (IMF) warned of a bleak economic outlook and fears of a “second wave” spooked investors.

No one knows if this will be just another day of volatility or if we’re headed for another bear market.

If it’s going to be the latter, should you be buying ASX shares or cash and gold right now?

Why buying and holding ASX shares is a good strategy

As with all investing, each investment decision is obviously up to the individual and will change with circumstances.

That being said, buying and holding ASX shares has proven to be a good strategy over a number of decades.

If you’re a little worried about market losses, just remember that they’re only paper losses until you sell. If you’re still holding shares, you haven’t actually lost anything until you pull the trigger.

In the February–March bear market, we saw some irrational investing by a lot of first-timers. People panicked as ASX shares fell across nearly all sectors before buying back their shares in April or May.

This is just a form of market timing. Yesterday, I wrote a little bit about why you don’t have to time the market to get rich. Given the sharp losses across the ASX 200 yesterday led by Flight Centre Travel Group Ltd (ASX: FLT), I think it’s worth reiterating.

If you have a long-term investment horizon (i.e. retirement) then what happens today or tomorrow shouldn’t matter. Day-to-day ASX share price movements are just noise – the key is to invest in high-quality companies with long-term potential.

So… what about cash and gold?

I think both cash and gold can have a place in a well-rounded investment strategy. Both have different characteristics including safety (both), liquidity (cash) and inflation hedging properties (gold).

However, I don’t think changing your investment strategy in the midst of a pandemic is necessarily a wise move.

I won’t be loading up on cash and gold even if the share market falls further. If anything, I’ll be trying to deploy what cash I do have into cheap ASX shares.

More reading

• ASX 200 drops 2.5%, ASX travel shares dumped
• The BHP share price has jumped 40% higher in the last 3 months
• Top brokers recommending you buy these ASX shares in this market sell-off
• Transurban Group and 1 other ASX share I’d buy in another share market crash
• ASX retailers beware! Amazon.com is gearing up for its next major attack

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

The post In today’s market, should you buy ASX shares, buy gold, or hold cash? appeared first on Motley Fool Australia.

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The Openpay Group Ltd (ASX: OPY) share price is having one of those ‘ordinary’ days today. Openpay shares are down more than 9% today to $2.25. This is despite no major news out of the company.

But that’s not why we’re talking about Openpay today.

Instead, let’s talk about the company’s recent performance. Openpay started the year going for $1.24 a share. Its pre-COVID-19 high of $1.40 came on 13 February (just in time for Valentine’s Day). Then the March market crash happened and Openpay was smashed. Its shares dropping all the way down to 32 cents on 23 March (a loss of 77%).

But since 23 March things have really got juicy. On today’s prices, anyone who bought into Openpay on 23 March would be sitting on a tidy 600% gain right now. That’s the highest return to date for any ASX company over a $50 million market capitalisation that I know of (even beating fellow payments company Afterpay Ltd (ASX: APT) ). 

It gets even better. On 4 June, the company’s shares popped all the way up to $4 a share on a surge of buying activity. Anyone purchasing Openpay at 32 cents in March and selling them at $4 in June would have enjoyed a return of 1,150%. Of course, its shares didn’t last long at $4. After another week, the shares were back to around the levels we see today. But hey, it’s always fun dreaming of what could have been!

Still time to buy Openpay shares?

Well, that depends on your view of the future of the buy now, pay later sector. Unlike its rivals Afterpay and Zip Co Ltd (ASX: Z1P), Openpay focuses on more ‘expensive’ purchased — think cars, healthcare and home improvement.

I think this niche is a great area for Openpay to be focusing on, but it remains to be seen whether it can fend off other BNPL providers and really cement its dominance. This company only floated on the ASX in December of last year, but early signs are very promising. In May, for instance, Openpay reported that it’s customer numbers had increased by more than 130% year on year in the month of May. With its current market capitalisation of ~$244 million, there is definitely room for growth here.

Foolish takeaway

Whilst I did get some FOMO (fear of missing out) looking at Openpay’s recent performance, I don’t think I’ll be jumping on this share in the near future.

It’s still very early days for this company, and I think it will need to pull off a herculean task in carving out a successful presence in the buy now, pay later space. A space which seems to be getting more crowded every week. As such, I’ll be sitting on the sidelines on this one.

More reading

• Could one of these ASX shares be ‘the next Afterpay’?
• Why Xero and these ASX tech shares just hit record highs
• 3 high quality ASX shares I would buy if there were another market crash
• ASX 200 finishes higher, Afterpay hits new record
• 3 ASX payments shares that could double your money

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 Purchasing Openpay shares in March in would have pocketed you this return appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) dropped 2.5% today to 5,818 points.

Investors are becoming more fearful about the spread of COVID-19 again. The S&P 500 (INX) fell by 2.6% overnight and the ASX generally follows what international share markets do in the short-term.

ASX travel shares and banks sell off

Some of the ASX 200 shares that are most at risk of another COVID-19 uncontrolled outbreak were the ones that fell the most today.

The share price of Flight Centre Travel Group Ltd (ASX: FLT) fell by 11%.

Webjet Limited (ASX: WEB) suffered a share price decline of 8.6%.

The Corporate Travel Management Ltd (ASX: CTD) share price dropped 8%.

It wasn’t just ASX 200 travel shares that declined today.

The Commonwealth Bank of Australia (ASX: CBA) share price fell 2.3%, the Westpac Banking Corp (ASX: WBC) share price dropped 3.5%, the Australia and New Zealand Banking Group (ASX: ANZ) share price declined 3.1% and the National Australia Bank Ltd (ASX: NAB) share price dropped 3.5%.

CSL Limited’s (ASX: CSL) deal

Healthcare leader CSL announced it is going to acquire the exclusive global license rights to commercialise an adeno-associated virus (AAV) gene therapy program called AMT-061 for the treatment of haemophilia B. The AMT-061 program, currently in phase 3 clinical trials, could be one of the first gene therapies to provide potential long-term benefits to patients with haemophilia B.

If AMT-061 is successful, appropriate candidate haemophilia B patients would be able to have a one-time treatment to restore factor IX plasma level activity to functional levels capable of eliminating the need for frequent and ongoing replacement therapies.

The ASX 200 business will start with an upfront US$450 million payment to uniQure followed by regulatory and commercial sales milestone payments and royalties.

Qantas Airways Limited (ASX: QAN) turnaround plan

Qantas has announced a $1.9 billion capital raising to help the business remain financially strong during the next three years.

It is looking to raise approximately $1.4 billion in a fully underwritten institutional placement and up to $500 million in a non-underwritten share purchase plan. The placement price is $3.65 per share, which is a 12.9% discount to the last traded price. The new shares represent a 25% increase to the total shares on issue.

Qantas unveiled a plan that is targeting $15 billion of lower costs over three years in line with reduced flying activity including fuel consumption savings. It hopes to achieve $1 billion per annum of ongoing cost savings from FY23 with productivity improvements.

The ASX 200 airline is going to cut 6,000 jobs across all parts of the business. It will continue to stand down 15,000 employees, particularly those associated with international operations. It will also ground up to 100 of its aircraft for up to 12 months (or more). Some leased aircraft may be returned as they fall due.

The cost of implementing this plan is expected to cost $1 billion with most of it realised during FY21.

Bapcor Ltd (ASX: BAP) reports large growth

Bapcor announced it has seen a large amount of sales growth for two of its main divisions.

The ASX 200 auto parts business said its retail segment experienced strong demand in May and June with Autobarn same store sales increasing over 45% from the prior year. On a full year basis to the end of June 2020, it is estimated that Autobarn same store sales will increase by approximately 8%.

Burson Trade has also experienced strong demand in May and June with same store sales growth to be up approximately 10%. On a full year basis, Bruson same store sales growth is expected to be around 5%.

Bapcor’s segments that suffered most heavily due to COVID-19 were New Zealand, specialist wholesale and Thailand. These segments are also recovering.

Management is now experiencing net profit after tax (before significant items) for FY20 to be in the range of $84 million to $88 million.

More reading

• In today’s market, should you buy ASX shares, buy gold, or hold cash?
• The BHP share price has jumped 40% higher in the last 3 months
• Top brokers recommending you buy these ASX shares in this market sell-off
• 3 quality ASX shares offering shareholders generous dividends
• Transurban Group and 1 other ASX share I’d buy in another share market crash

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor, Corporate Travel Management Limited, and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post ASX 200 drops 2.5%, ASX travel shares dumped appeared first on Motley Fool Australia.

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So, you have some spare cash to invest in shares right now? Maybe this is your first time investing in ASX shares, or maybe you are looking to top up your ASX share portfolio.

Either way, with the S&P/ASX 200 Index (ASX: XJO) still well down on its pre-coronavirus highs and market confidence continuing to gradually improve, now could be a good time to invest.

Here we take a close look at 2 of my top ASX share picks right now: BetaShares NASDAQ 100 ETF (ASX: NDQ) and Wesfarmers Ltd (ASX: WES).

BetaShares NASDAQ 100

My first ASX share investment recommendation is an exchange-traded fund (ETF). The advantage of ETFs over regular listed shares is that you get instant diversification to a wide range of listed companies.

The BetaShares NASDAQ 100 ETF invests in a basket of shares on the US NASDAQ exchange. It is comprised of the 100 largest, non-financial businesses on this exchange and is home to some of the world’s most successful businesses, with a high proportion of tech companies. These include tech giants such as Amazon, Google, Facebook, Microsoft, Netflix and Apple. Many are world-leading brands, and many also have strong and dominant positions in their individual market niches.

Given Australia’s tech sector is very small compared to the US market, purchasing this ETF gives you instant access to a much larger tech market not normally available via the ASX.

It’s also an easier (and cheaper) way to get exposure to the US tech market than by investing directly in US-listed tech companies. Buying individual US shares requires a separate trading account, and the transactions fees are also higher than they are for regular ASX shares.

Wesfarmers

Although Wesfarmers is a single listed company, one attribute that it has in common with an ETF like BetaShares NASDAQ 100 ETF is its strong sector diversification. Purchasing this ASX share gives you instant access to Wesfarmers’ expansive portfolio of high-quality companies.

Wesfarmers is a highly diversified business with operations in general retail segments including home improvement and outdoor living, apparel and general merchandise and office supplies. It also has exposure to industrial segments with operations in chemicals, energy and fertilisers, and industrial and safety products. This diversification provides a buffer to various parts of the economic cycle.

Wesfarmers also has a strong balance sheet, positioning it well to ride out the current crisis. It also has witnessed strong demand from its online retail offerings during the coronavirus pandemic.

Foolish takeaway

While both are very different investments, I believe that the BetaShares NASDAQ 100 ETF and Wesfarmers are worthy of consideration for adding to your ASX share portfolio. Both provide strong market diversification in 2 very different markets, and could be well placed to outperform the ASX 200 over the next 5 years, in my view.

More reading

• ASX retailers beware! Amazon.com is gearing up for its next major attack
• 3 robust ASX dividend shares you need to own
• Coronavirus second wave potential could drive investment portfolio changes
• 3 quality ASX dividend shares you can buy today
• Here are 3 Australian share market trends to watch this week

Phil Harpur 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. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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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