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When many Australians read of passive income, they picture a wealthy celebrity lying on a banana lounge drinking cocktails while royalty cheques fly into their account.

But the fact is that earning money for nothing is well within the reach of ordinary Aussies.

It just requires careful research, ASX dividend shares, compounding, and patience.

It doesn’t require any special talent that is uniquely possessed by the chosen few.

Let’s explore some hypotheticals:

Aim for 10% each year

ASX investors are fortunate enough to have franking rules that incentivise capital returns via fat dividends, because not every developed country has such a mechanism.

This means that there are quality stocks available that provide very comfortable dividend yields to fast-track you to passive income.

Take Woodside Energy Group Ltd (ASX: WDS), Growthpoint Properties Australia Ltd (ASX: GOZ), and Accent Group Ltd (ASX: AX1) for example.

Playing in the energy, real estate, and retail sectors, they are a well diversified bunch who pay out excellent yields — respectively 10.9% fully franked, 8.9% unfranked, and 8.25% fully franked.

All three are well managed businesses in their fields who command the respect of many professional investors.

CMC Invest shows that 7 out of 12, three of five, and five of 11 analysts rate Woodside, Growthpoint and Accent shares as buys right now.

Combined with franking credits and capital growth, it is not out of the question for a portfolio of such dividend stocks to be collecting 10% compound annual growth rate (CAGR) in the long run.

Reinvest early for rewards later

For argument’s sake, let’s say you can start with a portfolio worth $40,000, which comparison site Finder found last year is the average savings level for Australians.

Then you add $100 each week — or, rounded down, $400 each month.

Initially, every time dividends are paid out, reinvest it straight back into the portfolio. If some of the stocks have dividend reinvestment plans (DRPs), then even better.

If this nest egg can keep up 10% CAGR for 10 years, you’ll end up with $180,249 of dividend stocks.

From then on, stop reinvesting the dividends.

Instead, put it in your pocket as your new source of passive income.

That’s $18,000 landing in your account each year, or $1,500 monthly.

You can then lie on a banana lounge drinking cocktails.

The post How investing $100 per week can create $1,500 in annual ASX dividend income appeared first on The Motley Fool Australia.

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More reading

• Could this be jump-starting ASX energy shares today?
• Why Bapcor, Domino’s, Santana Minerals, and Woodside shares are charging higher
• 5 things to watch on the ASX 200 on Monday
• Santos share price rises on $2.3 billion revenue from ‘challenging year’
• Here’s why I invested in Accent shares for dividend income

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 Accent Group. 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 post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Could this be jump-starting ASX energy shares today?
• Here’s why the Bapcor share price is popping 6% today
• Why Bapcor, Domino’s, Santana Minerals, and Woodside shares are charging higher
• This ASX 300 stock is my favourite way to invest in Australian farmland
• Are ASX growth shares back? How these fundies delivered over 20% upside in 2023

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and Megaport. The Motley Fool Australia has positions in and has recommended Smartgroup. The Motley Fool Australia has recommended Bapcor, Megaport, and Orora. 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 own shares in Pilbara Minerals Ltd (ASX: PLS), chances are you’re feeling a little despondent right now.

This leading ASX 200 lithium stock has had a rough few months, to put it politely. At $3.63 a share today (at the time of writing), the company is down 27.4% from the $5 a share levels we were seeing this time last year. Pilbara has also lost more than 30% since August. And that’s despite the 11% share price rebound we’ve seen over the past week or so.

But of course, Pilbara shareholders would be used to some healthy volatility by now. After all, this is a company that has bounced between $3.20 a share and $5.43 in just the past 12 months.

The company’s recent woes can probably mostly be attributed to the recent slump in lithium prices that have sapped ASX investors’ confidence in most lithium shares. As we covered just last week, Pilbara’s most recent quarterly update revealed that the company has had to endure a 50% decline in the prices it has been able to realise for its lithium products.

This has also led to speculation that Pilbara will have to cut its freshly-instated dividend. Last year, investors were delighted with Pilbara’s maiden interim and final dividends, which added up to a 2023 total of 25 cents per share. However, fears that this might turn out to be a flash in the pan have probably dented investor confidence as well.

So with all of that in mind, it’s not much of a surprise to see Pilbara’s shares cropping up on the list of the ASX’s most short-sold stocks in recent weeks (including this week).

Have we found a bottom for Pilbara Minerals shares?

However, not everyone is bearish on Pilbara Minerals shares as we get going with 2024. In fact, one fund manager still names Pilbara as one of its major holdings.

As reported in the Australian Financial Review (AFR) this week, Tim Carleton and Will Mumford of Auscap’s Long Short Australian Equities Fund remain exceptionally bullish on Pilbara Minerals shares.

A quick check of the fund’s January newsletter tells us that Pilbara remains comfortably within the fund’s current (as of 31 December) top 20 stock picks.

Carleton told the AFR that it was “the fund’s strict focus on quality operations that has the portfolio managers unperturbed by the short interest [in Pilbara stock]. Here are some more of his remarks:

We’ve been very pleased with them – just look how disciplined they look. They’ve been keeping all that cash on the balance sheet, recognising the cycle was going to be volatile… They’re in a remarkable position … and there’s a pretty strong chance that their Pilgangoora operation [in Western Australia] becomes the lowest-cost lithium mine in the world.

No doubt Pilbara investors will be delighted with that assessment. But, as always, only time will tell if Carleton is on the money with Pilbara.

The post ‘Remarkable position’: Why Pilbara Minerals shares are still a top pick appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• If I invested $10,000 into Pilbara Minerals shares 10 years ago, I would have…
• Here’s what Bell Potter is saying about the Pilbara Minerals share price
• Here are the top 10 ASX 200 shares today
• Is the Pilbara Minerals’ interim dividend at risk of being axed?

Motley Fool contributor Sebastian Bowen 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.

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It’s been a decent few months for the CSL Ltd (ASX: CSL) share price on the ASX. Back in October 2023, CSL shares hit a new 52-week (and four-year) low of $228.65. 

But today, those same shares are going for $293.42 at the time of writing. That’s up 0.15% for the day thus far, and up almost 30% from that October low.

Even so, CSL’s medium-term share price performance is probably leaving investors wanting a little more.

As we discussed the week before last, CSL shares have been stuck in a rut for a while now. The ASX 200 healthcare stock last hit an all-time high (around $340 a share) back in early 2020.

But in the now four years since that time, CSL hasn’t even gotten close to that high watermark. Indeed, as of today’s pricing, CSL shares remain down by almost 13% from that early 2020 high. See all of that for yourself below:

However, perhaps 2024 will finally be the year that the CSL share price gets back to its old groove. Hopeful investors have 13 February next month circled on their calendars. Not just because it’s pre-Valentine’s Day, but because that’s when CSL reveals its next earnings report.

Yep, CSL is scheduled to deliver its half-year results for the six months to 31 December 2023 on 13 February. And investors are no doubt hoping they get an early visit from Cupid’s arrow.

Of course, we can’t know what CSL will pull out of its hat next month until we hear from the company itself.

ASX brokers rate CSL shares as a buy

Saying that though, there are a few ASX brokers who reckon CSL and its share price are primed for a good year this year.

Earlier this month, we covered the views of ASX broker Morgan Stanley. Morgan Stanley is expecting big things from CSL this year. It currently has an overweight rating on the company, along with a 12-month share price target of $334. Not quite at CSL’s all-time high, but probably close enough for comfort.

The broker also highlighted its positive outlook on CSL’s plasma collection market. If Morgan Stanley is on the money here, we could well see this quantified in CSL’s earnings next month.

But it’s not just Morgan Stanley. We’ve also recently gone over fellow broker Morgans’ views on the healthcare giant. Morgans also has an add rating on the CSL share price right now. This broker’s 12-month share price target currently sits at $328.20.

As such, while we won’t fully know if CSL’s upcoming earnings will give investors enough confidence to send its shares back to $300 and beyond, these ASX brokers certainly seem to be expecting some big things.

The post Are CSL shares set for an earnings boost? appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to buy today
• Is now the right time to buy CSL shares? Here’s my take

Motley Fool contributor Sebastian Bowen has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. 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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I believe investing in ASX stocks is one of the best things we can do for our finances over the long term. But, just like buying anything, we need to pay a price for the assets we buy.

Many questions arise when considering the price to buy a stock at. Is today’s price a good one? Does it even matter? Thus, let’s discuss whether it matters what value we buy ASX stocks at.

The purchase price is a key part of returns

Making a positive return is the most important thing with investing, otherwise we may as well just have kept the money in a bank account. Of course, we can’t know which investments are going to do well, and volatility is likely to appear every so often.

If we bought an ASX stock a year ago at a share price of $10 and it’s now $11, that’s a return of 10%. But if we bought at $12 and it was now $11, that’d be a decline of close to 8%. It’s the same ending price but produces quite different returns.

The returns can seem even more dramatic if we buy at times when the share market plunges. Imagine we’d invested in that business if it had sunk to $6 (perhaps in 2022) – getting back to $11 would translate into a return of 83%.

That’s also why investors need to be careful about paying extremely high prices for a business because it reduces the likelihood of making a good return.

So, in terms of ASX stock returns, the price does matter.

This reminds me of a particular saying – price is what you pay, value is what you get.

Don’t try to time the market?

There are plenty of good reasons why investors don’t need to try to pick the best price. For starters, we don’t know what prices are going to do. If we knew what prices were going to do, investing would be so easy! There’s no need to stress too much about it.

Plus, even if prices do go lower, we don’t know if that’s the bottom or not. I’d rather make sure I invest at a good price than try to wait for an even better price. I’d rather not miss out on a bargain!

With diversified investments like an exchange-traded fund (ETF), I think we can be less price-specific because there are so many underlying businesses with different valuations. For example, I’d happily invest in the Vanguard MSCI Index International Shares ETF (ASX: VGS) on a monthly basis, without trying to pick and choose which days to buy. As new winners emerge, they can help push up the unit price of an ETF.

Over the long-term, if we invest in the right ASX stocks (at a reasonable price), it shouldn’t matter too much if we buy at last month’s price or next month’s price – over the years, they should be able to deliver good performance. But, it’s impossible to know what’s going to happen without a crystal ball.

The post Does it matter what price I buy ASX stocks at? appeared first on The Motley Fool Australia.

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More reading

• Are CSL shares set for an earnings boost?
• Is the Domino’s share price a buy after its plunge?
• After soaring 15% in 2023, what’s ahead for the gold price in 2024?
• Could this be jump-starting ASX energy shares today?
• Why Boss Energy, Calix, Frontier Digital, and Gold Road shares are falling today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. 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 Domino’s Pizza Enterprises Ltd (ASX: DMP) share price has plunged 30% compared to a year ago. Is this a great opportunity to invest in the stock, or is there worse to come?

It’s impossible to say what’s going to happen next without my crystal ball, which isn’t working at the moment. The Domino’s share price could fall further and/or the upcoming results could show a deterioration of profitability. But, things could also get better.

The recent business update triggered the Domino’s share price decline. Domino’s reported an 11% rise in ANZ network sales in the FY24 first half compared to the FY23 second half, while Asian network sales fell 1%.

Domino’s blamed Japanese network sales going backwards as a key negative factor, referring to the number of corporate stores in that market. Net profit before tax is expected to be between $87 million to $90 million, which is below HY23, but above the FY23 second half.  

It said while franchisee partners in ANZ and Europe are improving average unit economics, there is more work to do. Improvements are required in the FY24 second half to grow order volumes. Domino’s advised any previous guidance for its FY24 performance is “no longer in effect”.

Is the Domino’s share price an opportunity?

The broker UBS Is pessimistic about the situation and has a sell rating on the business because of a few reasons.

First, it’s another announcement that was below expectations, which isn’t a good sign.

Second, there are concerns that ANZ’s improvement is “less able” to be translated into other high store growth markets, particularly Asia and France, though Germany’s performance is “pleasing”.

The third reason is that franchisee profitability is improving but not as quickly as expected, “which places risk on the rate of store growth (or the long-term Domino’s EBIT margins)”.

Finally, UBS also referred to “elevated valuation multiples”.

Based on Domino’s share price, UBS thinks the company is valued at 28 times FY24’s estimated earnings.

But, it does have a price target of $42, implying a possible small rise over the next 12 months.

Any positives?

UBS isn’t loving the short-term outlook for the company, but it is still expecting the business to stage a profit recovery in the long term.

The broker is expecting Domino’s to report an FY24 EBIT margin of 9%. But, this could rise to 10.7% in FY25, 12.2% in FY26, 13.2% in FY27 and 13.8% in FY28.

Domino’s is also expected by UBS to see growing revenue in each of these financial years. Earnings per share (EPS) could be $1.43 in FY24, $1.75 in FY25 and $2.10 in FY26.

This would put the Domino’s share price at 19 times FY26’s estimated earnings. Of course, these numbers are just forecasts. Forecasts can be wrong – the profit could be worse (or better) than expected.

Store numbers may not grow as quickly as investors (or the company) were previously thinking, but the company still has compelling intentions. The strength in the German market is exciting because of what a large market that is.

With the Domino’s share price now much lower, I think it’s at a much more appealing price which could enable it to deliver outperformance from here. While it’s unlikely to be an uneventful journey from here, I think Domino’s shares could deliver outperformance in the next three to five years, particularly if the business can improve profit margins.

The post Is the Domino’s share price a buy after its plunge? appeared first on The Motley Fool Australia.

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More reading

• Why Bapcor, Domino’s, Santana Minerals, and Woodside shares are charging higher
• Why Block, Domino’s, IDP Education, and Sayona Mining shares are sinking like stones today
• Why are Domino’s shares sinking 22% today?
• 5 things to watch on the ASX 200 on Thursday
• Domino’s stock: buy, sell or hold?

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 Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. 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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Gold bugs were well-rewarded in 2023 with the gold price soaring 15% over the year, in US dollar terms.

Bullion ended the year trading for US$2,078 per ounce, its highest annual close on record.

That made it one of the best-performing asset classes of the year.

And, as you’d expect, the soaring gold price offered some heady tailwinds to leading S&P/ASX 200 Index (ASX: XJO) gold stocks.

The Northern Star Resources Ltd (ASX: NST) share price, as one example, leapt 25% in 2023. And that doesn’t include the 26.5 cents per share in dividends the ASX 200 gold miner paid out during the year.

Commenting on the big leg up for the gold price in 2023, the World Gold Council (WGC) noted the yellow metal surged “against the odds of rising interest rates and resilient economies”.

The WGC added:

The lower than assumed drag from interest rates supports the notion that the gold market is populated by price sensitive buyers alongside investors that buy into stronger prices – a feature of gold’s dual nature.

The WGC said the gold price in 2023 was supported by “geopolitical risks, sizable central bank purchases, and intensifying expectations of major central banks lowering rates”.

They estimated that central banks contributed between 10% to 15%.

And China was a big player, with reserves at the People’s Bank of China (PBoC) rising again last year. Indeed, the PBoC has announced consecutive gold purchases since November 2022.

According to the WGC:

In 2023, the central bank announced a 225t increase in their gold reserves, which reached 2,235t by the end of December. Gold now accounts for 4.3% of the nation’s official foreign exchange reserves. And during the past 14 months China’s gold reserves have risen by 287t.

That’s the year just past.

Now what can investors expect from the gold price in 2024?

What’s the outlook for the gold price in 2024?

The yellow metal is currently fetching US$2,024 per ounce, down 2.5% so far in 2024.

Reviewing their own outlook for the gold price in the year ahead, the WGC said:

Our Gold Outlook 2024 painted a somewhat lacklustre picture for gold in 2024. This was driven by the consensus view that a soft landing would be engineered in the US and Europe; China’s growth would be soft; inflation risks would abate but longer maturity interest rates would remain stubbornly elevated, and high prices would restrain consumer demand.

But the WGC said the outlook for the gold price has since shifted. The council noted that, “The dramatic move in interest rates and policy expectations following a ‘volte face’ by the Fed in December may have increased the inflation resurgence risk.”

As for the near term, the WGC said:

A tug-of-war between historically positive January seasonality and some pushback against the dovish sentiment that drove prices to all-time highs in December is likely.

The post After soaring 15% in 2023, what’s ahead for the gold price in 2024? appeared first on The Motley Fool Australia.

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More reading

• Could this be jump-starting ASX energy shares today?
• Why Boss Energy, Calix, Frontier Digital, and Gold Road shares are falling today
• Here’s why the Bapcor share price is popping 6% today
• Why Bapcor, Domino’s, Santana Minerals, and Woodside shares are charging higher
• Why is this leading ASX 200 gold stock crashing 14% today?

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

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It’s turning into a decent day for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares so far this Monday. At present, the ASX 200 has gained an encouraging 0.25%, pulling the index up to around 7,575 points. But let’s talk about what’s going on with ASX energy shares.

Energy stocks are, on the whole, easily outperforming the broader market today so far. To start with, let’s note that the S&P/ASX 200 Energy Index (ASX: XEJ) has galloped a healthy 2.08% higher this Monday.

But we can see this reflected in the prices of ASX energy shares too. Take Woodside Energy Group Ltd (ASX: WDS), the largest (by a country mile) energy stock in the ASX 200. Woodside shares are presently enjoying a 2.02% boost up to $31.81 each.

Beach Energy Ltd (ASX: BPT) is doing just as well, up 1.69% at $1.62 a share.

Santos Ltd (ASX: STO) shares are faring even better, basking in a 2.41% lift to $7.86. But it’s Karoon Energy Ltd (ASX: KAR) that is leading the pack with its 2.99% rise to $1.96 a share.

It’s clear that something’s in the water over at the energy stock pond today. But what’s going on exactly that is behind this stellar start to the trading week for this ASX sector?

Well, it could be energy prices themselves. As my Fool colleague James covered this morning, oil prices had a strong finish last week. West Texas Intermediate (WTI) crude rose 0.75% to US$78,01 a barrel, while Brent crude spiked 1.35% to US$83.55 a barrel. Since all of the ASX energy shares mentioned above prosper when oil prices rise, this could be behind today’s market outperformance.

However, another development is also worth covering.

ASX energy shares rise amid US LNG pause

Over the weekend (our time), US President Joe Biden made a significant announcement. The Biden Administration is moving to initiate a “temporary pause on pending decisions of Liquified Natural Gas exports”. Here’s some of what Biden’s statement said:

My Administration is announcing today a temporary pause on pending decisions of Liquefied Natural Gas exports – with the exception of unanticipated and immediate national security emergencies.

During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security, and our environment. This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time.

The US Department of Energy has confirmed that existing liquified natural gas (LNG) plants and arrangements won’t be affected. Nor will exports to countries that have a free trade agreement with the United States (which includes Australia).

However, the department confirmed that “until updated, DOE will pause determinations on pending applications for export of LNG to non-Free Trade Agreement countries”.

So why would this news be good for ASX energy shares? Well if the Biden Administration does halt exports of LNG to some markets, ASX energy shares could be primed to take up the slack.

Of course, this is just speculation at this point. But it could also help to explain the excellent day energy stocks are having on the market this Monday. Let’s see what the rest of the week holds in store.

The post Could this be jump-starting ASX energy shares today? appeared first on The Motley Fool Australia.

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More reading

• Why Bapcor, Domino’s, Santana Minerals, and Woodside shares are charging higher
• Leading brokers name 3 ASX shares to buy today
• This ASX 300 stock is my favourite way to invest in Australian farmland
• 5 things to watch on the ASX 200 on Monday
• How long does it take to become a millionaire with ASX shares?

Motley Fool contributor Sebastian Bowen 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.

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The S&P/ASX 200 Index (ASX: XJO) is starting the week positively. In afternoon trade, the benchmark index is up 0.3% to 7,576.4 points.

Four ASX shares that have failed to follow the market’s lead are listed below. Here’s why they are falling:

Boss Energy Ltd (ASX: BOE)

The Boss Energy share price is down 7% to $5.20. Investors have been selling this uranium developer’s shares partly in response to a broker note out of Bell Potter. According to the release, the broker has downgraded its shares to a speculative hold rating but with an improved price target of $6.41. It said: “We upgrade our valuation to $6.41/sh (previously $5.69/sh) on changes to our price outlook, and downgrade BOE to Speculative Hold (from speculative Buy) as the stock has out-performed peers.”

Calix Ltd (ASX: CXL)

The Calix share price is down 21% to $1.84. This morning, this environmental technology company announced that the Leilac-2 project will move to another Heidelberg Materials’ site following a decision by Heidelberg Materials to end clinker production at its Hanover cement plant. Calix and its subsidiary, Leilac, are currently working with Heidelberg Materials to identify a suitable new site for the project as soon as possible.

Frontier Digital Ventures Ltd (ASX: FDV)

The Frontier Digital share price is down 9.5% to 48 cents. Investors have been selling this digital listings company’s shares following the release of its quarterly update. Although the company posted a 3.9% quarter on quarter increase in revenue, its EBITDA was down 23%.

Gold Road Resources Ltd (ASX: GOR)

The Gold Road share price is down 16% to $1.44. This follows the release of the gold miner’s quarterly update this morning. Management revealed that its production was lower quarter on quarter due to delays accessing higher grade ore from the open pit. In addition, labour availability impacted the ore mining rate.

The post Why Boss Energy, Calix, Frontier Digital, and Gold Road shares are falling today appeared first on The Motley Fool Australia.

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More reading

• Why is this leading ASX 200 gold stock crashing 14% today?
• Why is this ASX All Ords share plunging 30% on Monday?
• Guess which ASX 200 uranium stock was just downgraded
• 2 ASX shares I’d buy for my child for long-term growth
• Up 124% and 52% in a year, why are these 2 ASX 200 uranium shares gaining again 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 positions in and has recommended Frontier Digital Ventures. The Motley Fool Australia has recommended Frontier Digital Ventures. 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-listed exchange-traded funds (ETFs) are focused on growing sectors that could deliver solid capital growth based on the tailwinds they’re exposed to.

In this article, I’m going to talk about businesses from two sectors, cybersecurity and video gaming, that I like the revenue growth outlook for.

Betashares Global Cybersecurity ETF (ASX: HACK)

This ASX ETF is invested in 32 businesses that provide roles and services in the cybersecurity industry.

Some of its biggest holdings include Broadcom, Crowdstrike, Palo Alto Networks, Infosys and Okta.

Cybersecurity is a very important service – there are so many transactions and valuable data on the internet. Online banking, online shopping, connecting with government services, important emails and so on.

The Australian Signals Directorate (ASD) 2023 annual cyber threat report showed that the average cost of cybercrime per report increased by 14%, the number of cybercrime reports rose by 23% and there were 33,000 calls to the Australian Cyber Security hotline, up 32%. There have been a number of Australian businesses that have been hit by cyber attacks including Medibank Private Ltd (ASX: MPL) and Optus.

The good guys need to continually up their game, and they’re getting paid more for it. According to Statista research, the global cybersecurity market amounted to US$223.7 billion in 2022, it’s projected to reach US$345.4 billion in 2026 and US$478.7 billion in 2030. If revenue does keep rising, it could help the underlying businesses continue to perform for shareholders.

Between inception in August 2016 and the end of December 2023, this ASX ETF has delivered an average return per annum of 17%. But, past performance is not a guarantee of good returns.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This ETF is invested in businesses that make a large portion of their revenue from the gaming sector.

Readers may recognise some of the largest positions in the portfolio like Nvidia, Nintendo, Tencent, Electronic Arts, Take-Two Interactive Software and Bandai Namco.

According to VanEck, Newzoo research says the competitive video gaming audience was expected to reach 646 million people globally in 2023, driven partly by a rising population of digital natives. E-sports revenue has grown by an average of 28% per year since 2015, while video gaming achieved 12% average annual growth since 2015.

One of the benefits of e-sports growth is creating new potential revenue streams from game publisher fees, media rights, merchandise, ticket sales and advertising.

It had a total of 25 holdings as at 24 January 2024, which shows a decent amount of diversification, and an appealing allocation to the bigger businesses.

The post Looking for growth? I’d buy these 2 ASX ETFs appeared first on The Motley Fool Australia.

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More reading

• 5 excellent ASX ETFs to buy when the market reopens
• Could AI be a boon for this ASX ETF?
• 2 excellent ASX ETFs I’d buy for diversification and growth
• 3 ASX ETFs for growth investors to buy in January

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 BetaShares Global Cybersecurity ETF, CrowdStrike, Nvidia, Okta, Palo Alto Networks, Take-Two Interactive Software, and Tencent. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom, Electronic Arts, and Nintendo. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has recommended CrowdStrike, Nvidia, Okta, and VanEck Vectors Video Gaming And eSports ETF. 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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