Tag: Motley Fool

The S&P/ASX 200 Index (ASX: XJO) ended its winning streak in April. The benchmark index shed 0.9% of its value during the month to end it at 7,435 points.

Fortunately, not all shares dropped with the market. Here’s why these were the best performers on the ASX 200 in April:

Ramsay Health Care Limited (ASX: RHC)

The Ramsay Health Care share price was the best performer on the ASX 200 in April with a sizeable 24.5% gain. Investors were buying the private hospital operator’s shares after it received a takeover approach from a consortium led by KKR. The consortium has tabled a non-binding $88.00 cash per share offer to acquire the private hospital operator. This will be reduced by any dividends paid. Ramsay has granted the consortium due diligence access.

GrainCorp Ltd (ASX: GNC)

The GrainCorp share price was on form and charged 21.7%. This was despite there being no news out of the grain exporter. However, with global grain prices reaching 25-year highs recently, it appears as though investors are confident that GrainCorp will (at least) deliver on its recently upgraded earnings guidance for FY 2022.

AMP Ltd (ASX: AMP)

The AMP share price wasn’t far behind with a gain of 20.2% last month. This was driven by the announcement of a number of sale agreements for its private markets business, Collimate Capital. This culminated in the announcement of an agreement to sell its international infrastructure equity business to DigitalBridge for up to A$699 million late in the month. In total, the deals value the total Collimate Capital business at up to A$2.04 billion including the value of retained assets, and up to A$2.5 billion when including the maximum earnouts. AMP intends to return the majority of the sale proceeds to shareholders.

Viva Energy Group Ltd (ASX: VEA)

The Viva Energy share price was on form and raced 19.6% higher during the month. Investors were buying the fuel retailer’s shares after its positive form continued during the first quarter. Viva Energy reported a 9% increase total group volumes despite battling mobility restrictions caused by the floods. In addition, Viva Energy reported a big improvement in its Geelong Refining Margin. This went down well with UBS, which retained its buy rating and lifted its price target to $2.95.

The post These were the best performing ASX 200 shares in April appeared first on The Motley Fool Australia.

More reading

• Direct indexing: What is this latest investing fad?
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/O3bhc8S

Experts currently have a very favourable opinion about some impressive ASX shares. May 2022 could be the month to jump on some of these stocks.

Businesses that are growing revenue and profit at a double-digit rate could be opportunities after their recent declines.

Here are two such buy-rated ASX shares:

REA Group Limited (ASX: REA)

REA Group claims to be the leading property portal business in Australia with realestate.com.au.

It also has several other property-related digital assets including realcommercial and flatmates as well as investments in a number of international sites in Asia and the US.

Since the start of 2022, the REA Group share price has fallen almost 25%.

The ASX share has been growing profit and is seeing a recovery in listing volumes. In the FY22 first half, the company reported an “exceptional” performance. Core operations saw revenue growth of 37% to $590 million and net profit after tax (NPAT) growth of 31% to $226 million.

Its US investment Move Inc saw revenue growth of 19%, while REA India revenue growth was 125%.

In the first half of FY22, national residential listings were up 17%. January 2022 saw national residential listings rise another 14% year on year.

REA Group is rated as a buy by the broker Morgan Stanley, with a price target of $178. That’s an upside of around 40%.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a ASX healthcare technology share. It provides software for breast screening as well as administration tools for clinics.

The Volpara share price has fallen almost 20% in 2022.

The company has built up a market position in the US with coverage of 35.5% of women being screened at 31 March 2022.

This ASX share generates a large amount of its revenue from subscriptions through a software as a service (SaaS) model. Annual recurring revenue (ARR) is now around NZ$31.8 million. The quarter for the three months to 31 March 2022 showed subscription revenue growth of 39% to NZ$7.5 million, with SaaS client churn remaining “low”.

While the company has a leading position in the US, it is expanding in other regions with contracts. It has signed a distribution deal with IMS Giotto in Italy. Multiple orders are in place, with the possibility of up to 100.

It has also signed its first deal in the Middle East with Cleveland Clinic Abu Dhabi, which was recently named the top hospital in the UAE.

The company has a very high gross profit margin. In the FY22 first half, its gross margin was 91.4%.

Volpara is working on growing its average revenue per user (ARPU) by selling more modules to clients. It is also working on its lung cancer screening opportunity.

It’s rated as a buy by the broker Morgans with a price target of $1.94.

The post Buy these 2 impressive ASX shares in May 2022: experts appeared first on The Motley Fool Australia.

More reading

• 2 highly rated blue chip ASX 200 shares brokers rate as buys
• 2 ASX 200 shares Goldman Sachs rates as buy
• 2 rapidly growing ASX shares that are on sale: experts
• Volpara share price slips despite milestone CEO change
• 2 highly rated ASX 200 shares analysts are tipping as buys

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 positions in and has recommended VOLPARA FPO NZ. The Motley Fool Australia has positions in and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/G8VQfgL

In morning trade, the National Australia Bank Ltd (ASX: NAB) share price is in the red.

At the time of writing, the banking giant’s shares are down over 1% to $32.24.

Why is the NAB share price in the red?

The NAB share price is falling on Monday after the bank released an update on its AUSTRAC investigation.

According to the release, NAB has entered into an Enforceable Undertaking (EU) with the government financial intelligence agency.

This follows an enforcement investigation undertaken by AUSTRAC, which commenced in June 2021, in relation to NAB’s compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.

Under the terms of the EU, NAB is required to:

• Complete a Remedial Action Plan (RAP) approved by AUSTRAC by 31 December 2024
• Address to AUSTRAC’s satisfaction any deficiencies or concerns with activities in the RAP identified by AUSTRAC
• Appoint an AUSTRAC-approved External Auditor who will provide a final report by 31 March 2025.

Taken longer to fix that ‘it should have’

NAB’s CEO, Ross McEwan, acknowledged that it has taken the bank longer than it should have to fix its AML/CTF issues.

He explained:

“We take our AML/CTF obligations very seriously. We acknowledge the concerns that led to AUSTRAC’s investigation. We will continue to work closely with AUSTRAC as we deliver the agreed further actions.

“We recognise it has taken us longer to fix the concerns raised than it should have. We welcome AUSTRAC’s acknowledgement that NAB has undertaken significant work to date – and we accept that there is more to do.

Mr McEwan highlights that the money laundering threat is evolving at an incredible rate and NAB is making it a priority to address this.

He commented:

“It is essential that everyone in our bank is focussed on getting the basics right, every time, and keeping our customers and bank safe. Keeping criminals out of the financial system is a top priority for NAB. We recognise our opportunity to better detect, deter and disrupt the flow of illegal money at a time when the threat is evolving at an incredible rate.

“We have a plan to make our bank simpler for customers to use, while safeguarding against the criminal threat. The EU provides a clear timeline as we further build capability, increase resourcing, continue to modernise our systems and improve controls and governance.”

The post NAB share price drops amid AUSTRAC update appeared first on The Motley Fool Australia.

More reading

• Here’s how the NAB share price stacked up in April
• Why NAB shares are this leading broker’s top big four pick
• 2 inflation-busting ASX dividend shares that brokers are tipping as buys
• Is the Westpac share price expensive in April?
• Here’s what the 5 biggest companies on the ASX 200 today were worth in 2000

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 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.

from The Motley Fool Australia https://ift.tt/QVM7Eg8

The Newcrest Mining Ltd (ASX: NCM) share price moved in circles last month, registering nil gains for the period.

Indeed, it was a disappointing finish, considering its shares touched a near 52-week high of $28.96 on 19 April.

Investors clearly have mixed feelings when it comes to deciding the value of Newcrest shares in the current climate.

The gold miner released its quarterly production report to the ASX late last month, upgrading its FY22 guidance. However, this wasn’t enough to excite the market which led shareholders to sell off the company’s shares.

Over the past week, Newcrest shares have fallen more than 6%, despite finishing 0.6% higher to $26.88 on Friday.

What happened to Newcrest shares last month?

While the company provided a robust trading update, the price of gold recently cooled, causing Newcrest shares to sink.

The yellow metal dropped 1.45% over the month to close at US$1897.35 an ounce.

This is a stark contrast to when gold was fetching as high as US$2,070.13 an ounce on 8 March.

The Russian war in Ukraine caused a steep hike in gold prices in the short term. And with potential interest rate hikes around the corner, this is having a negative effect on the safe-haven asset.

Traditionally, rising interest rates drag down the price of precious metals and it appears investors are bracing for impact.

The major banks are predicting that the Reserve Bank of Australia could lift interest rates as high as 1.50% in 2022.

Annual inflation has soared to 5.1%, the worst in the last 20 years which has led to escalating living costs.

Investors will have to wait and see until tomorrow if the Reserve Bank of Australia starts lifting the cash rate.

If this does happen, it will be the first increase in almost 12 years from the governing body.

About the Newcrest share price

Over the last 12 months, the Newcrest share price is relatively flat, with year to date up almost 10%.

On valuation grounds, Newcrest commands a market capitalisation of approximately $24.01 billion.

The post Own Newcrest shares? Here’s how the share price performed in April appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Newcrest share price slumps despite earnings guidance boost
• Can the gold price surge above US$2,000 again this year?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

from The Motley Fool Australia https://ift.tt/5gyjHNr

The AGL Energy Limited (ASX: AGL) share price has come under pressure on Monday.

In morning trade, the energy company’s shares are down 3.5% to $8.39.

Why is the AGL share price falling?

The catalyst for the weakness in the AGL share price on Monday has been the release of a profit warning.

According to the release, AGL has downgraded its earnings guidance for FY 2022 due to a generator fault at Unit 2 of the Loy Yang A Power Station in Victoria in April.

AGL now expects its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be between $1,230 million and $1,300 million. This is down from its previous guidance range of between $1,275 million and $1,400 million.

It will be a similar story on the bottom line, with underlying profit after tax for FY 2022 now expected to be between $220 million and $270 million. This is down from AGL’s previous guidance range of between $260 million to $340 million.

What about FY 2023?

The release explains that AGL currently expects the unit to return to service by 1 August. Engineering assessments are continuing and AGL will inform the market of any material changes to this timeframe.

In light of this, the financial impact from the event will be split between FY 2022 and FY 2023. This will be approximately $60 million pre-tax ($41 million after tax) in FY 2022 and approximately $13 million pre-tax ($9 million after tax) in FY 2023.

The company also revealed that it is focused on affordability and reliability for its customers and is reviewing whether any upcoming planned outages in the rest of the generation portfolio can be shifted to help mitigate AGL’s shorter energy position in the market.

The post AGL share price tumbles on earnings guidance downgrade appeared first on The Motley Fool Australia.

More reading

• How much is the AGL dividend payout ratio?
• Why is the AGL share price outperforming today?
• Own AGL shares? Experts weigh in on outage fallout
• Why AGL, Hub24, Rio Tinto, and Zip shares are dropping
• Faults and financials: Why is the AGL share price getting zapped 6% today?

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 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.

from The Motley Fool Australia https://ift.tt/LvEGrP7

The Treasury Wine Estates Ltd (ASX: TWE) share price has traded sideways over the past four months.

Investors quickly snapped up the winemaking and distribution giant’s shares following the company’s first-half results.

The strong bidding led Treasury Wine shares to accelerate from $10.54 on 15 February to $11.77 the following day.

Although this represents a gain of 11.6%, its shares have gradually retraced to $11.27 at Friday’s market close. This means that the company’s shares are now down 9% for 2022.

What did Treasury Wine last report?

Treasury Wine updated the ASX in mid-February with its financial scorecard for the six months ending 31 December.

The company reported mixed numbers across key financial metrics.

Namely, net sales revenue declined 10.1% to $1,267 million over the prior corresponding year. The weakened result reflected the impact of the United States commercial portfolio divestiture and the decline in shipments to mainland China.

On the bottom line, Treasury Wine recorded a fall of 7.5% in net profit after tax (NPAT) to $109.1 million.

While the decline in earnings was expected, investors chose to focus on the CEO’s comments on the company’s outlook.

Treasury Wine boss Mr Tim Ford said that trading conditions for the second half will be broadly consistent with H1 FY22.

However, looking further ahead, the company’s “financial objective remains to deliver sustainable top-line growth and high single-digit average earnings growth over the long-term.”

How much is Treasury Wine scheduled to pay in dividends?

With the company’s latest interim dividend of 15 cents per share paid last month, investors may be wondering what’s next.

Goldman Sachs is forecasting Treasury Wine to reward shareholders with a total FY22 dividend payment of 31 cents. This implies a final dividend payment of 16 cents per share for the second half.

When calculating against the current share price, Treasury Wine is trailing on a forecast fully-franked dividend yield of 2.75%. It is expected that the payout ratio will be at 65%, in line with the company’s guidance of 55% to 70%.

It’s worth remembering that the company has been a relatively consistent dividend payer over the years. Before the onset of COVID-19, the company had been paying shareholders fully-franked dividends of up to 20 cents on a biannual basis.

When looking at these numbers from above, the 2.75% dividend yield falls short of the Treasury Wine share price decline.

If the company’s shares can make a turnaround and reach the $12 mark – what it was trading at throughout the 12 months – then the dividend yield is worth its weight.

About the Treasury Wine share price

In 2022, the Treasury Wine share price has risen 10% in value, regardless of the short-term volatility.

Based on valuation grounds, Treasury Wine commands a market capitalisation of approximately $8.14 billion.

The post The Treasury Wine share price has tumbled 9% in 2022, so is the dividend yield worth its weight? appeared first on The Motley Fool Australia.

More reading

• Can the Treasury Wine share price recover from its post-China hangover?
• 2 ASX shares ripe to buy at current prices: expert
• Top broker tips Treasury Wine share price to rise almost 25%
• Leading brokers name 3 ASX shares to buy today
• Can the Treasury Wine share price have a better month in April?

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

from The Motley Fool Australia https://ift.tt/YnfsyXq

The Rio Tinto Ltd (ASX: RIO) share price tumbled last month after the company reported a disappointing quarterly trading update.

At Friday’s market close and for end of April, the mining giant’s shares finished almost 5% down. This is despite the company edging around 4% higher in the last three trading days of the month.

What’s going on with Rio Tinto shares?

Investors were heading for the exits as the Rio Tinto share price fell more than 10% following the company’s first-quarter results.

Rio Tinto delivered its first-quarter production report on 20 April, revealing a soft performance across the board.

Management acknowledged another difficult quarter operationally despite the commencement of underground mining at Oyu Tolgoi.

Market expectations were revised downwards amidst sustained high inflation, the Russia-Ukraine war, and a resurgence of COVID-19 lockdowns in China.

While commodity prices increased due to disruptions in supply, production diminished because of downside risks to near-term construction activity.

Nonetheless, the miner stated that full-year shipments guidance remains unchanged.

The news sent Rio Tinto shares backtracking almost 3% on the day.

Rio Tinto noted that further downside risks include a prolonged war, extended labour and supply shortages, and monetary policy adjustments.

What do the brokers think?

A number of brokers weighed in on Rio Tinto’s shares after the release of its latest performance report.

Analysts at Goldman Sachs cut its price target by 1% to $135.10. Based on the current share price, this implies an upside of around 20%. Clearly, the broker believes there is still significant value in the miner despite the short-term volatility.

On the other hand, Morgans had a more bearish tone, slashing its 12-month rating by 6.6% to $114.00. This is in line with where the Rio Tinto share price traded on Friday.

Rio Tinto share price review

Over the past 12 months, Rio Tinto shares have dipped by about 7%. Although, when looking at 2022, its shares have gained almost 13% for the period.

On valuation grounds, Rio Tinto commands a market capitalisation of roughly $41.88 billion.

The post The Rio Tinto share price delivered a disappointing performance in April. Here’s why appeared first on The Motley Fool Australia.

More reading

• ASX 200 mining shares just had their best trading day in 5 weeks. What’s next?
• Why is the Rio Tinto share price rebounding strongly on Thursday?
• Cash generation among ASX 200 iron ore shares will ‘be significant’ in 2022: expert
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in
• Sinking iron ore price sends ASX 200 mining shares tumbling

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

from The Motley Fool Australia https://ift.tt/RLcrfEZ

The Qantas Airways Limited (ASX: QAN) share price is on watch today following several key updates from the airline.

Qantas shares closed on Friday at $5.60 apiece.

What key updates did Qantas announce?

The Qantas share price is in the spotlight on Monday after the Aussie airline reported that domestic travel numbers were returning to levels not seen since the onset of the pandemic faster than expected. Both leisure and travel demand were said to be rebounding strongly.

The airline also said there is strong demand for international flights, but this segment remains hampered by travel restrictions persisting in some nations.

On the financial front, Qantas expects its net debt levels to fall to $4.5 billion by the end of April, which brings net debt back to pre-pandemic levels.

Looking ahead to the second half of 2022, underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2H22 are forecast to come in at $450 million to $550 million.

In a separate announcement, Qantas revealed that the board has given the go ahead for ‘Project Sunrise‘, the airline’s long haul scheme. Qantas will order 12 new Airbus A350s that will fly direct from Australia to major overseas destinations like London and New York.

The flights – the longest operated by any airline in the world – will commence in 2025 out of Sydney.

Commenting on the move, Qantas CEO Alan Joyce said:

New types of aircraft make new things possible. That’s what makes today’s announcement so significant for the national carrier and for a country like Australia where air travel is crucial…

The Board’s decision to approve what is the largest aircraft order in Australian aviation is a clear vote of confidence in the future of the Qantas Group. Our strategy for these aircraft will see us generate significant benefits for those who make it possible – our people, our customers and our shareholders.

Qantas share price snapshot

The Qantas share price has gained 8.8% so far in 2022. That compares to a loss of 2.0% posted by the S&P/ASX 200 Index (ASX: XJO).

The post ‘Clear vote of confidence’: Qantas share price on watch following key updates appeared first on The Motley Fool Australia.

More reading

• Travel’s back! 3 ASX shares this expert loves right now
• Why this fundie is tipping 120% upside for the Qantas share price
• Why are ASX 200 travel shares having a first-class end to the week?
• When did Qantas last pay a dividend?
• Qantas share price climbs 3% as international travel garners speed

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.

from The Motley Fool Australia https://ift.tt/PdphLxO

Bank of Queensland Ltd (ASX: BOQ) shareholders might be feeling frustrated after the bank’s share price has seesawed in recent times.

The regional bank released its half-year results for the 2022 financial year, reporting single-digit increases across its top line metrics.

The board opted to significantly ramp up its upcoming interim dividend to eligible investors.

Let’s take a look below at what you need to know about the latest dividend.

What’s the deal with the Bank of Queensland interim dividend?

The Bank of Queensland share price backtracked as investors vented their disappointment following the release of the bank’s financial scorecard.

The company is set to pay out 22 cents per share for the six months ending 28 February 2022. That’s 29% higher than last year’s interim dividend of 17 cents per share for first half of FY21.

Furthermore, the payout ratio for the latest dividend is at 53% (in line with the target range of 60%-75% of cash earnings).

Management, however, noted there may still be uncertainty associated with COVID-19 over the next year. Nonetheless, while maintaining a prudent approach to provisioning, the bank expects CET1 [Common Equity Tier 1] to remain above 9.5%.

The higher dividend came despite the company recording a slight fall of net profit after tax (NPAT) to $212 million. In the previous period (H2 FY21), the group achieved NPAT of $215 million.

When can shareholders expect to be paid?

Bank of Queensland will pay the interim dividend to eligible shareholders on 26 May.

However, to be eligible you’ll need to own Bank of Queensland shares before the ex-dividend date which falls on Wednesday 4 May. This means if you want to secure the dividend, you will need to purchase the company’s shares by tomorrow, Tuesday 3 May at the latest.

It is worth noting that on the ex-dividend day, the share price traditionally falls in proportion to the dividend amount.

In addition, the dividend is fully franked which means that investors will receive tax credits when tax time comes along.

Currently, Bank of Queensland has a dividend trailing yield of 4.90% and a market capitalisation of roughly $5.09 billion.

The post Hoping to bag the Bank of Queensland dividend? Read this appeared first on The Motley Fool Australia.

More reading

• The Bank of Queensland share price has lost 30% in 5 years. Have the dividends been worth it?
• Broker says selloff of Bank of Queensland shares was unjustified
• Top brokers name 3 ASX shares to buy today
• Leading brokers name 3 ASX shares to buy today
• Broker says Bank of Queensland share price is great value

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

from The Motley Fool Australia https://ift.tt/veVXgIt

An Australian firm has brought the latest investing fad dubbed ETFs 2.0 from overseas to the local market.

Nucleus Wealth recently launched directindexing.com.au to allow Australians to invest through “direct indexing”.

Direct indexing builds on the concept of a passive index fund, but allows customisations of individual stock holdings according to each investor’s tastes.

“Direct indexing involves the investor owning the individual shares that make up an index in a separately managed account,” said Nucleus Wealth chief investment officer Damien Klassen.

“Because the investor directly owns each of the shares in their own account, Nucleus Wealth is able to customise their superannuation or investments.”

How direct indexing works

For example, if an investor wants their money to track the S&P/ASX 200 Index (ASX: XJO) but wants to avoid the big banks, they could simply sell their shares in Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

The same goes for those who want to eliminate fossil fuel producers or gambling from their portfolios.

“Where an index mutual fund, an index ETF or traditional superannuation fund merely tracks the index, direct investing allows investors to control their investment decisions,” said Klassen.

“Investors can modify their portfolios by creating ’tilts’, which is the ability to remove or add certain holdings or sectors according to personal preferences.”

The direct indexing product from Nucleus Wealth is charging from 0.11% upwards on a sliding scale based on the amount invested.

Form your own opinions about ethical investing

Nucleus Wealth chief operating officer Shelley George said ETFs are now like Henry Ford’s famous quote, “Any customer can have a car painted any colour that he wants, so long as it is black”.

“Before direct investing, if you want a red car, you had to go to a stock broker and build the entire car from the base parts,” she said.

“Nucleus looks at direct investing as providing a third option: take an already built car and add your own custom tilts.”

The direct indexing concept hands the power to individuals to invest ethically, according to their own beliefs and criteria.

“When it comes to ethical investing, the questions become more nuanced and the answers often depend on the individual,” said Klassen.

The post Direct indexing: What is this latest investing fad? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday

Motley Fool contributor Tony Yoo 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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/yr86Enk