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The BetaShares Global Sustainability Leaders ETF (ASX: ETHI) is an ASX exchange-traded fund (ETF) that you might not have heard of. But its performance in 2021 so far perhaps necessitates a rethink.

This environmental, social and corporate governance (ESG)-focused fund is not your standard index fund that follows a ‘warts and all’ index like the S&P/ASX 200 Index (ASX: XJO).

Most benchmark indexes, like the ASX 200, list companies based on market capitalisation alone. Whether a company is a bank, a coal miner, an alcohol seller or a purveyor of gaming and gambling services, it can join the ASX 200.

It just needs a market cap in the top 200 companies of the ASX. That’s regardless of how good, bad or ugly the company’s business may be.

Well, this ETHI ETF doesn’t quite work this way. The BetaShares Global Sustainability Leaders ETF, according to its issuer, has a different approach:

ETHI aims to track the performance of an index (before fees and expenses) that includes a portfolio of large global stocks identified as “Climate Leaders” that have also passed screens to exclude companies with direct or significant exposure to fossil fuels or engaged in activities deemed inconsistent with responsible investment considerations.

What’s in an ETHI-cal ETF?

So this fund holds a basket of companies from around the world that, as you might have gathered, can be classed as ‘climate leaders’. As one might imagine, there are no miners here.

Instead, ETHI’s top holdings include the likes of Apple Inc (NASDAQ: AAPL), Visa Inc (NYSE: V), NVIDIA Corporation (NASDAQ: NVDA) and PayPal Holdings Inc (NASDAQ: PYPL). It also holds Adobe Inc (NASDAQ: ADBE), American Express Company (NYSE: AXP) and Toyota Motor Corp (NYSE: TM).

The ETF is weighted 39.4% towards information technology. A further 16% is towards healthcare, 16% towards financials and 13.9% in consumer discretionary shares.

Geographically, 68.8% of its holdings are from the US markets, with 8.7% from Japan, and 3.9% from the Netherlands.

But let’s get to performance. This ETHI ETF’s unit price has returned 17.01% in 2021 so far. And that’s not even including the distribution payment that came investors’ way back in January.

That compares pretty well against the ASX 200 which has returned 9.87% in growth over 2021 so far. That’s almost double in fact (as the headline told you).

Over the past 3 years, ETHI has returned an average of 23% per annum. It’s also given investors an average of 21.61% per year since its inception in January 2017.

For ethically-minded investors, it might be nice to see a fund that can put its money where its mouth is and give an index-beating performance.

Past performance is no guarantee of future success of course. But this ETF certainly gives us a good look at what ethical investing can do.

The post This ethical ASX ETF has doubled the ASX 200 in 2021 so far appeared first on The Motley Fool Australia.

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• ASX 200 up 0.5%: Telstra asset sale, AGL demerger, Nuix crashes again
• The Uniti Group (ASX:UWL) share price has rocketed 130% in 1 year
• 5 things to watch on the ASX 200 on Wednesday
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American Express is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen owns shares of American Express and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple, NVIDIA, PayPal Holdings, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adobe Systems and has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Adobe Systems, Apple, NVIDIA, and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The IODM Ltd (ASX: IOD) share price is flying 32% higher today.

Shares in the software company are flying after announcing a material contract earlier today.

At the time of writing, the IODM share price has been sold down and is trading around 14% higher for the day at around 25.5 cents. Shares in the company were flying 32% higher earlier today after hitting an intra-day high of 29 cents per share.

Lets take a look at what IODM announced and why investors are rushing to buy shares in the company.

IODM share price surges on first Education client in UK

Earlier today, IODM announce that the company has signed its first client in the UK.

According to the announcement, the transactional contract represents more than 30% of the company’s last reported full year revenue. IODM reported revenue in FY20 of approximately $0.645 million.  

The service level agreement which focuses on the education sectors is set for a term of up to 5 years. IODM noted that the signing comes via the Global Partnership agreement with Western Union Business Solutions (WUBS).

The new contract will allow WUBS to provide the IODM platform to existing and new clients in the Education sector in the UK.

According to the announcement, the total assessable market for the education sector is worth an estimated $118.6 million in revenue per annum. IODM noted that the company’s target market, being WUBS existing business, has an achievable revenue market of $57.7 million per annum.

IODM’s management noted that the announcement reflects the long-term positioning of the company’s accounts receivable (AR) solutions. In addition, the company will continue to market its services in other sectors which includes healthcare and related industries.

More on IODM

IODM software solutions uses digital technology to optimise automation.

The company’s software solutions provide an end-to-end AR process that supports customers with invoicing, query management, payment reminders and analytics. IODM’s solutions are customisable, allowing for increased client productivity and timely payments while reducing costs and minimising human error.

The IODM share price has performed strongly in 2021. Including today’s price action, the IODM share price is up more than 55% for the year.

The post Why the IODM (ASX:IOD) share price surged 32% higher today appeared first on The Motley Fool Australia.

More reading

• The Calix (ASX:CXL) share price is rising 5% today. Here’s why
• Why Life360, Paradigm, Sayona Mining, & Telstra shares are charging higher
• Is your money safe in Commonwealth Bank (ASX:CBA) shares right now?
• Sonic (ASX:SHL) share price hits all-time high today
• Up 638% in 1-year, why the Chalice Mining (ASX:CHN) share price is gaining today

Motley Fool contributor Nikhil Gangaram 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 Bruce Jackson.

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The Calix Ltd (ASX: CXL) share price is gaining today. At the time of writing, shares in the technology company are trading for $2.69 – up 4.67%.

The positive price movement comes after Calix announced a project it’s involved in will receive nearly $40 million in government funding.

Let’s take a closer look.

Calix share price boosts on government funding

In a statement to the ASX, Calix says it will receive a share of $39 million in government funds for its role in “a low carbon research project.”

Calix is a key partner in the Heavy Industry Low-carbon Transition Cooperative Research Centre (HILT CRC). The Centre aims to reduce carbon emissions in Australia’s heavy industries.

The government funding will boost the research group’s coffers to more than $210 million in cash and in-kind contributions over the next 10 years.

Calix says it will continue to produce technologies to bring down emissions in cement and bauxite production as part of its work with the group.

Industrial partners in the project include Boral Limited (ASX: BLD), Fortescue Metals Group Limited (ASX: FMG) and South32 Ltd (ASX: S32).

The big cash boost seems to be interesting investors, thus, lifting the Calix share price.

Management commentary

Calix Managing Director Phil Hodgson said:

We are excited to be a key partner in the HILT CRC and welcome today’s funding from the Australian government. It will provide opportunities for Calix to grow our expertise and network with some of Australia’s largest heavy industrial and mining companies, while helping to develop CO2 hubs, fast track projects and Australia’s long-term capability for low-carbon projects.

More specifically, it is a chance for us to demonstrate the technology developed for CO2 mitigation in the production of cement and lime through our European LEILAC-1 and 2 projects in an Australian setting, as well as explore other more sustainable applications for our technology in heavy industry, backed by this impressive team of researchers and industrial participants.

Calix share price snapshot

During the past 12 months, the Calix share price has increased by more than 250%. In fact, in just the last 6 months, shares in the company have increased in value by 149%.

Calix has a market capitalisation of $425 million.

The post The Calix (ASX:CXL) share price is rising 5% today. Here’s why appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 0.6% to 7,346.2 points.

Four ASX shares that are climbing more than most are listed below. Here’s why they are charging higher:

Life360 Inc (ASX: 360)

The Life360 share price has jumped 5% to $6.58. Investors have been buying the app maker’s shares after it announced the creation of a Family Advisory Council that will bring together well-known celebrities and influencers to help shape the company’s product and marketing strategy. Life360 also revealed that it expects its annualised monthly revenue to land towards the higher end of its guidance of US$110 million to US$120 million in 2021.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

The Paradigm share price is up over 7% to $2.08. This follows an update on its Investigational New Drug (IND) application to the US Food and Drug Administration (FDA). Paradigm has responded to the FDA’s questions about its application, stating that it consulted with multiple experts for its responses. This includes a United States board-certified pre-clinical toxicologist and a former FDA physician. Management is optimistic the FDA will be satisfied with its responses and be able to proceed to the next steps of the process.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is up 15% to 8.5 cents. This morning the lithium explorer revealed that it has been granted approval for the acquisition of Quebec-based North American Lithium (NAL) with Piedmont Lithium Inc (ASX: PLL). Sayona’s Mining’s Managing Director, Brett Lynch, believes this is a key milestone for the company, its partner Piedmont Lithium, and the city of Quebec.

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price is up 4.5% to $3.76 after announcing the sale of a 49% interest in Telstra InfraCo Towers. The telco giant is selling the assets to the Future Fund, Commonwealth Superannuation Corporation, and Sunsuper. Telstra expects to receive $2.8 billion after transaction costs, with approximately 50% of net proceeds to be returned to Telstra shareholders in FY 2022.

The post Why Life360, Paradigm, Sayona Mining, & Telstra shares are charging higher appeared first on The Motley Fool Australia.

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• Why the Paradigm (ASX:PAR) share price is edging higher today
• Life360 (ASX:360) share price up 206% in last 12 months
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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 recommended Life360, Inc. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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What a roller-coaster the Commonwealth Bank of Australia (ASX: CBA) share price has been on in 2021 so far. CBA shares are up 19.73% so far this year. Not a bad return for an S&P/ASX 200 Index (ASX: XJO) blue-chip share.

Late last month, CBA hit $100 a share for the first time ever and went on to go as high as $106.57 by 17 June. But then things came back to earth somewhat when CommBank shares fell almost 8% between 17 June and 21 June. Today, the CBA share price is trading back above $100 and is sitting at $100.20 at the time of writing, down 0.28% for the day.

So with the ASX 200’s largest company sitting where it is after such a healthy start to the year, many investors might be wondering: ‘Is my money still safe in CBA shares today’? Good question. Because, as all good investors know, past performance is no indication of future success.

Well, let’s check out what the CBA share price is telling us firstly today. At $100.60, Commonwealth Bank of Australia shares represent a market capitalisation for the ASX bank of $178.78 billion. The company has a price-to-earnings (P/E) ratio of 22.41 on current pricing and a trailing dividend yield of 2.46%.

Just for comparison, CBA’s big four banking brethren all currently have P/E ratios lower than this figure. Westpac Banking Corp (ASX: WBC) comes closest with its 22.17 ratio today. But National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Grp Ltd (ASX: ANZ) are sitting at 20.16 and 17.14 respectively today.

So is your money safe with CBA shares right now?

But let’s get back to whether money is safe in CBA right now. One broker who has serious doubts about that prospect is investment bank, Goldman Sachs. Goldman does not think CBA shares are a great place to put your money today, to sum it up.

Goldman has a ‘sell’ rating on CBA right now, with a 12-month share price target of $80.26. That represents a potential downside of 20% on the current share price.

Firstly, Goldman is neither here nor there on the recently announced sale of CBA’s insurance division to Hollard Group. It notes that this sale is likely to be the last significant transaction of CBA’s ‘slimming down’ strategy. Goldman reckons this sale represents “10x the historic cash net profit of the general insurance business”.

Other than this deal, Goldman simply estimates that CBA shares are too expensive on current pricing. Its $80.26 share price target represents a combination of a discounted cash flow model, as well as a consideration of CBA’s return on equity, and its price relative to its net tangible assets (NTA).

Although Goldman accepts that if the market “continues to ignore the earnings impact of lower rates and focuses on dividend yield”, then it might be too pessimistic. Even so, Goldman clearly does not think investors’ money is safe in CBA shares right now.

The post Is your money safe in Commonwealth Bank (ASX:CBA) shares right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. 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 Bruce Jackson.

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The Sonic Healthcare Ltd (ASX: SHL) share price hit an all-time high today, reaching a top of $38.51 before pulling back to the current trading price of $38.15.

Today’s gains extend a 16% year-to-date run for the global pathology provider, outpacing the S&P/ASX 200 Index (ASX: XJO) which has posted a 10% return over same time.

Sonic’s share price has climbed an additional 9.66% over the previous 1 month at the time of writing, following the announcement it will acquire 100% of Canberra Imaging Group back on 17 June.

Regarding the transaction, Sonic chief executive officer Dr Colin Goldschmidt said:

“Canberra Imaging Group is a high quality imaging practice, with outstanding radiologists, management and staff, and with a culture that is strongly aligned with Sonic’s Medical Leadership model. CIG has a proven track record in the greater Canberra market, with a history of strong organic growth based on personalised and excellent customer service. I am delighted to welcome warmly all CIG staff to the Sonic Healthcare group.”

Today’s trading volume is 95% more than the 20 day average trading volume for this time of day, and the share price has come off a 52-week low of $30.08 back in June 2020.

Sonic share price snapshot

On current prices, Sonic Healthcare has a market capitalisation of more than $17 billion, and trades at a price-to-earnings ratio (P/E) of around 19.

The company also pays a dividend of 87 cents per share, 30% franked. At the current share price, this equals an annual dividend yield of around 2.3%.

Sonic has a sound track record of meeting its distribution schedule, having met each payment since March 2009.

At the time of writing, the Sonic share price is up 0.16% at $38.15 per share.

The post Sonic (ASX:SHL) share price hits all-time high today appeared first on The Motley Fool Australia.

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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 Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Chalice Mining Ltd (ASX: CHN) share price is gaining today, up more than 4%.

Below we take a look at the latest exploration announcement from the ASX resource share and its joint venture (JV) partner Venture Minerals Limited (ASX: VMS).

What did Venture and Chalice announce?

Chalice Mining’s share price is rising today after Venture reported Chalice has uncovered new electromagnetic (EM) anomalies at Venture’s South West Ni-Cu PGE Project. (That’s nickel, copper and platinum group elements, for the uninitiated).

According to the release, the EM anomalies were found during early surveys of the “ground based moving loop EM (MLEM) and fixed loop EM program”.

Under the terms of the JV earn-in agreement, Chalice can earn up to 70% if it spends $3.7 million exploring the targets over a 4-year period. The current exploration program is the first stage of that JV earn-in.

Venture reported that the new EM anomalies are similar strength conductors to ones detected during the early drilling phase of the Julimar Ni-Cu-PGE discovery. Those “yielded wide and significant palladium intervals”.

The MLEM program has suffered some delays due to rains, with one third of the total planned 42 line kilometres completed so far. The full program is now expected to be complete by November. Once that’s complete, Venture said any promising anomalies will be infilled “to define targets for subsequent follow-up with surface geochemical sampling or drilling”.

Commenting on the developments, Venture’s managing director, Andrew Radonjic said:

Venture is extremely encouraged by the success of the early work done by our JV partners Chalice Mining on our South West Project. The ground EM program, though only one third complete, has already yielded new EM anomalies with one sitting adjacent to a previously drilled hole containing significant disseminated sulfides with elevated PGE levels.

The majority of the Thor ‘Julimar lookalike’ Target that already hosts several airborne EM anomalies is yet to be tested by Chalice’s EM program and the company looks forward to results from this work and potential follow up drill testing in the near future.

Chalice Mining share price snapshot

Chalice Mining’s share price has been a stellar performer over the past 12 months, up 638%. By comparison, the All Ordinaries Index (ASX: XAO) gained 27% over that same time.

Year-to-date the Chalice Mining share price has continued to outperform, up 72% in 2021.

Venture Minerals also got a healthy boost from today’s announcement, with shares up 11% today. That brings the Venture Minerals’ share price gains to 400% over the past 12 months.

The post Up 638% in 1-year, why the Chalice Mining (ASX:CHN) share price is gaining today appeared first on The Motley Fool Australia.

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• Why the Chalice Mining (ASX:CHN) share price is outperforming today

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 Bruce Jackson.

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Shares in AVZ Minerals Ltd (ASX: AVZ) are frozen as the company prepares to announce news of an equity raising. The AVZ Minerals share price ended yesterday’s trade at 16 cents, where it remains.

The mineral exploration company is keeping its cards close to its chest today. However, it’s told the ASX its equity raising will be in the form of an institutional placement and a share purchase plan.

Let’s take a closer look at today’s news from the company.

AVZ Minerals shares freeze over

AVZ Minerals is planning to keep its shares frozen until 2 July, unless it announces news of its placement to the market earlier.

While the company didn’t specify how it will use the capital it plans to raise, the Australian Financial Review (AFR) has reported most of the funds will go towards increasing its share of the Manono Project in Africa to 75%.

The capital raise will reportedly see the company with an extra $35 million to play with.

$30 million worth of new shares are said to have been offered to institutional and sophisticated investors, while $5 million of new shares were presented to existing shareholders.

The placement reportedly involved new shares on offer for 13 cents apiece.

Today’s trading halt is the third the company has undergone in 2021.

About the company

AVZ Minerals is a Perth-based exploration company.

Its focus is on mining lithium, tin and tantalum in the Democratic Republic of Congo.

The company is currently developing the Manono Project. It believes the project could be one of the largest lithium, caesium and tantalum deposits in the world. AVZ Minerals holds a 60% interest in the project.

AVZ Minerals share price snapshot

So far, 2021 hasn’t been a good year for the AVZ Minerals share price.

Currently, it’s 5.8% lower than it was at the start of the year. However, it’s gained a whopping 220% since this time last year.

The company has a market capitalisation of around $462 million, with approximately 2.9 billion shares outstanding.

The post The AVZ Minerals (ASX:AVZ) share price is frozen today. Here’s why appeared first on The Motley Fool Australia.

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• Lockdown fatigue? Expert explains why they could be great for ASX shares
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Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the financial year on a positive note. The benchmark index is currently up 0.5% to 7,338.8 points.

Here’s what is happening on the market today:

Telstra asset sales

The Telstra Corporation Ltd (ASX: TLS) share price is shooting higher today after revealing that it has sold a 49% interest in Telstra InfraCo Towers to the Future Fund, Commonwealth Superannuation Corporation, and Sunsuper. InfraCo Towers has ~8,200 towers across Australia, making it the largest provider of mobile tower infrastructure in the country. Telstra expects to receive $2.8 billion after transaction costs, with approximately 50% of net proceeds from the sale to be returned to Telstra shareholders in FY 2022.

AGL sinks on demerger update

The AGL Energy Limited (ASX: AGL) share price is sinking today after providing an update on its demerger plans. Given shareholder approval, AGL Energy will become Accel Energy, an electricity generation business focused on the accelerating energy transition. It will then demerge a new entity, AGL Australia, which will be a multi-product energy-led retailing and flexible energy trading, storage and supply business. And while it has reaffirmed its guidance, it has terminated its special dividend program because of its demerger plans.

Mining shares rise

One area of the market helping to drive the ASX 200 higher today is the resources sector. The likes of BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and South32 Ltd (ASX: S32) are all pushing higher, taking the S&P/ASX 200 Resources index 1.2% higher so far today.

Best and worst ASX 200 performers

The best performer on the ASX 200 today has been the Iluka Resources Limited (ASX: ILU) share price with a 9% gain. While there has been no news out of the mineral sands producer, it has recently been tipped as a takeover target. The worst performer has been the Nuix Ltd (ASX: NXL) share price with a 13% decline. News that its recently sacked chief financial officer, Stephen Doyle, is the subject of a criminal investigation into insider trading has spooked investors.

The post ASX 200 up 0.5%: Telstra asset sales, AGL demerger, Nuix crashes again appeared first on The Motley Fool Australia.

More reading

• AGL (ASX:AGL) share price slumps after demerger, guidance update
• Telstra (ASX:TLS) share price leaps on $2.8 billion sale
• The Uniti Group (ASX:UWL) share price has rocketed 130% in 1 year
• Former Nuix (ASX:NXL) executive accused of insider trading
• Why the Rio Tinto (ASX:RIO) share price will be in the spotlight 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 recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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COVID-19 lockdowns in Sydney, Perth and south-east Queensland will cost Australia $2.5 billion, but could actually be a boon to the ASX share market.

That’s the opinion of AMP Capital chief economist Shane Oliver, who thought Australia really has no choice but to keep enduring lockdowns until the majority of the population is vaccinated.

“Australia’s approach has led to relatively less deaths and a stronger economy,” he said in a AMP Ltd (ASX: AMP) memo this week. 

“And being early in the vaccination process – both globally and in Australia – it’s still too early to simply relax controls.”

Oliver calculated that, with greater Sydney hosting about 6.6 million people and roughly 25% of the national GDP, the 2-week lockdown there would be a $2 billion hit to the economy.

Perth’s shorter shutdown would be $200 million and Queensland’s 3-day freeze would cost $300 million.

That $2.5 billion total doesn’t include Victoria’s fortnight-long lockdown starting last month, which was an estimated $1.5 billion blow to the economy.

COVID-19 lockdowns work: for health and economy

According to Oliver, early and snappy lockdowns work well to keep people healthy and minimise damage to the economy.

“‘A stitch in time saves nine’ as the old saying goes!” he said.

“Providing they are short, the economic impact is relatively ‘minor’ — although still horrible — as spending and economic activity is delayed, which then bounces back once the lockdown ends.”

According to Oliver, countries that had a less stringent health approach, like the US and Sweden, ended up suffering more deaths and a worse economy.

“If Australia had a laxer approach, and as a result had the same per capita deaths as the US, it would have lost an extra 47,000 Australians on top of the 910 deaths so far,” he said.

“More deaths and a worse economy do not strike me as a compelling case to avoid lockdowns.”

Lockdowns could be a major boost for stocks

Oliver pointed out that the current COVID-19 outbreak could have a positive side-effect for ASX investors.

“The ongoing threat posed by coronavirus and lockdowns will likely keep the RBA relatively dovish at its July meeting,” he said.

“While we expect it to stick to the April 2024 bond for its yield target and announce some tapering of its bond buying, it’s likely to reiterate that rate hikes remain a long way off.”

In addition, the current wave of the virus would probably “limit the upside in bond yields in the short term”, making shares more attractive as an investment choice.

The spread of the virus, Oliver admitted, could be a catalyst for a “near-term correction” in the share market, especially for cyclical stocks.

“But if snap lockdowns remain relatively short as we expect, they are unlikely to derail the Australian economic recovery or the rising trend in Australian shares.”

The post Lockdown fatigue? Expert explains why they could be great for ASX shares appeared first on The Motley Fool Australia.

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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 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 Bruce Jackson.

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