Tag: Motley Fool

There are a few ASX shares that many brokers like right now.

Most brokers will have a different opinion about businesses. One broker could say that Commonwealth Bank of Australia (ASX: CBA) shares are a buy whilst another broker could say that the CBA share price is a sell.

However, when multiple brokers think that an ASX share is a buy, then it could be worth paying attention.

These two ASX shares could be worth watching:

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting shares are liked by at least five brokers right now.

One of the brokers that has the most positive outlook for the Baby Bunting share price is Morgans – it has a price target of $6.39.

The broker likes Baby Bunting’s growth prospects, it thinks that the expansion to New Zealand can improve that growth even further.

In the ASX share’s half-year result, Baby Bunting reported 16.6% growth of total sales to $217.3 million. This was driven by comparable store sales increasing by 15%, or 21.8% when excluding Victorian stores.

Just like other ASX retail shares, Baby Bunting is seeing a large surge of online sales, with growth of 95.9% over the half-year – click and collect sales went up 218%.

But it wasn’t just the sales that went up, Baby Bunting’s gross profit margin improved by 41 basis points to 37.4%. Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) went up 29.7% to $18.5 million and pro forma net profit after tax (NPAT) grew 43.5% to $10.8 million and statutory NPAT jumped 54.7%.

The CEO of Baby Bunting, Matt Spencer, explained why the company’s demand had been so reliably strong:

Maternity and baby goods are essential products for parents and parents-to-be and are less discretionary in nature. Our strong comparable store and total sales growth performance demonstrates that we continue to deliver on our strategy of growing market share.

Idp Education Ltd (ASX: IEL)

IDP Education is one of the world’s leading businesses when it comes to helping international students and doing England language testing.

The ASX share is liked by at least five brokers, including UBS which has a share price target of $29.80 for IDP Education.

UBS thought the recent FY21 half-year result was good considering the environment that IDP Education is operating in right now with COVID-19 impacts. The broker thinks IDP is a great business. It pointed out that online learning was able to pick up some of the slack.

As the global economy gets back to normal and COVID-19 vaccinations are rolled out, IDP Education could recover and be in a better position.

In the FY21 half-year result, the ASX share said that international English language test volumes had rebounded to pre-pandemic levels. Despite that, English language testing revenue was down 26% to $158.3 million and total company revenue was down 29% to $269.1 million.

EBITDA fell 33% to $68 million, EBIT fell 43% to $47.3 million and net profit dropped 45% to $29.7 million.

The company said it continues to invest in its various segments.

It must be noted that earlier this week, it was announced that Education Australia was going to divest its 40% shareholding of IDP Education. There will be a distribution of 25% to all of its 38 universities, which may or may not decide to sell shares over the coming year or so. The other 15% will be sold to the market and must be done before 11 December 2021.

IDP Education said this restructuring would not impact IDP’s operations or strategy.

More reading

• Will the ASX share e-commerce boom last?
• Here’s why the IDP Education (ASX:IEL) share price sank 6% today
• This unexpected second COVID boom will lift these ASX shares in 2021
• The worst performing ASX 200 shares last week
• 5 ASX shares to buy in a market crash

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Idp Education Pty Ltd. 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.

The post 2 ASX shares rated as buys by many brokers appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/38zKNQs

There are plenty of exchange-traded funds (ETFs) that offer investors the ability to get global diversification.  

However, there are a few that are particularly popular for the low management fees, returns and amount of diversification.

These two in-particular may be able to fit the bill and deliver returns in a passive way that is useful:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

This is Vanguard’s offering for Aussie investors to invest across the developed world’s share market in a single investment.

Inside the ETF’s portfolio are most of the world’s biggest companies. So, investing in this ETF gives exposure to the long-term growth of many international economies outside of Australia, according to Vanguard.

At the end of February 2021, it actually had 1,530 holdings.

Inside the portfolio are many of the world leaders like: Apple, Microsoft, Amazon, Facebook, Tesla, Alphabet, Johnson & Johnson, JPMorgan Chase, Visa, Nestle, NVIDIA, Berkshire Hathaway, Procter & Gamble, Walt Disney, Mastercard, PayPal, Roche, Intel, Netflix, ASML, Adobe, Salesforce, Novartis, Pfizer, Walmart, Cisco Systems, Broadcom, Qualcomm, LVMH, Nike, Costco, McDonald’s, Accenture, Unilever and so on.

In terms of the management fee, it has an annual cost of 0.18%. This is one of the lower-costing ETFs on the ASX.

Vanguard MSCI Index International Shares ETF provides global diversification – around two thirds of the ETF is invested in US businesses. But there are also plenty of countries that make up more than 1% of the portfolio including Japan, the UK, France, Canada, Switzerland, Germany, the Netherlands, Hong Kong and Sweden.

The ETF was listed on the ASX in November 2014. Since inception, the ETF has delivered total net returns of 11.9% per annum.

iShares S&P 500 ETF (ASX: IVV)

This ETF has a much stronger focus on US businesses. The S&P 500 is made up of 500 big businesses that are listed in the US.

It gives exposure to all of the FAANG shares as well as many other industry-leading businesses like Walt Disney, Boeing, Starbucks, Caterpillar, Deere, 3M, Lockheed Martin, S&P Global, Activision Blizzard and Colgate-Palmolive.

iShares S&P 500 ETF also has a very low cost. Its management fees are actually just 0.04% – this is one of the cheapest on the ASX.

The US share market has performed strongly over the last decade, leading to the S&P 500 being one of the best-performing popular indices. Over the last five years the iShares S&P 500 ETF has returned an average of 14.7% per annum and over the last ten years the ETF has returned an average of 16.4% per annum.

There are five sectors in the ETF’s portfolio that have weightings of more than 10%. Those are: communication (11.1% weighting), financials (11.5% weighting), consumer discretionary (12.3% weighting), healthcare (12.8% weighting) and IT (26.7% weighting). Different FAANG shares count as different sectors – Amazon is classified as a consumer discretionary business, whilst Facebook and Alphabet are classified as communication companies.

More reading

• Why ASX income investors should consider this dividend ETF
• 2 ETFs to buy in this tech sell off
• 2 high quality ETFs for ASX investors to buy in March
• This investment is one of Warren Buffett’s favourite share ideas
• 2 top ETFs to buy in March

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended iShares Trust – iShares Core S&P 500 ETF and 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 Bruce Jackson.

The post 2 ETFs to buy for strong global diversification appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3lnIRQl

When looking for growth shares to buy, I like to focus on companies that have long runways for growth. This is because they have the potential to generate strong long term returns for investors, allowing them to benefit from the power of compounding.

Two ASX growth shares which have been tipped for big things in the future are listed below. Here’s why they are highly rated:

Afterpay Ltd (ASX: APT)

The first ASX growth share to look at is Afterpay. It is a payments company that has grown at an explosive rate over the last few years thanks to the growing popularity of the buy now pay later payment method globally.

Positively, Afterpay is planning to increase its product portfolio very shortly with the launch of transaction accounts through the Afterpay Money app. After which, analysts at Bell Potter don’t expect the company to stop there. They believe that Afterpay could expand into other products such as mortgages in the future.

In addition to this, last week the company’s European acquisition completed. This means that it can now start its expansion onto mainland Europe. If this and its probable expansion into Asia are a success, this could provide it with a very long runway for growth over the next decade.

It’s no wonder then that Bell Potter is so positive on the company and its growth prospects. According to a recent note, the broker has a buy rating and $168.50 price target on Afterpay’s shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Pushpay provides the faith sector with a donor management system, including donor tools, finance tools and a custom community app, and a church management system (ChMS).

Its increasingly popular solutions simplify engagement, payments and administration, enabling users to increase participation and build stronger relationships with their communities.

Last year the company acquired Church Community Builder. It provides a platform that churches use to connect and communicate with their community members, record member service history, track online giving and perform a range of administrative functions.

Since then, the company has developed and launched its all-in-one engagement solution, ChurchStaq. ChurchStaq combines Pushpay’s giving and engagement solution with Church Community Builder’s ChMS functionality. It notes that this results in a holistic software solution that equips customers of all sizes with the technology they need to seamlessly connect across different ministry touch points.

This appears to have put Pushpay in a strong position to dominate its market and deliver on its goal of growing its US market share to 50%, which is worth US$1 billion in revenue per annum at present. This will be a significant lift on FY 2020’s revenue of US$129.8 million.

Analysts at Goldman Sachs are positive on the company. They have a conviction buy rating and $2.59 price target on its shares.

More reading

• Afterpay (ASX:APT) and another ASX growth share to buy right now
• ASX 200 up 0.95%: Afterpay rises, Westpac’s APRA update, Qantas upgraded
• Why Afterpay, Piedmont Lithium, ResApp, & Santos are charging higher
• 5 things to watch on the ASX 200 on Friday
• ASX 200 unmoved, Flight Centre soars, Afterpay keeps falling

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 fantastic ASX shares with long runways for growth appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3the5vc

Morgan Stanley analyst Brian Nowak has shared some interesting thoughts about the impacts of COVID-19 on the internet. His thoughts and comments could be relevant to e-commerce ASX shares.

Mr Nowak pointed out that the internet played a big part in helping households and businesses alike get through the COVID-19 lockdowns. People turned to online food shopping – my own household did too – streamed entertainment or perhaps played video games.

A big question for him is – are these changes permanent or will the world go back to “old habits and real-world experiences.”

Which ASX shares have seen online shopping booms?

Many businesses have seen an increase in sales and profit thanks to the rapid increase of e-commerce revenue.

There are some e-commerce ASX shares that are purely online and have seen large growth like Temple & Webster Group Ltd (ASX: TPW), Kogan.com Ltd (ASX: KGN) and Redbubble Ltd (ASX: RBL).

However, there’s also a larger group of ASX retail shares that have both in-store and online offerings, and the online sales have surged higher. Some examples are: Wesfarmers Ltd (ASX: WES), Adairs Ltd (ASX: ADH), JB Hi-Fi Limited (ASX: JBH), Baby Bunting Group Ltd (ASX: BBN) and Bapcor Ltd (ASX: BAP).

Indeed, the supermarket businesses of Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) are also seeing elevated levels of online sales growth.

What is Morgan Stanley expecting to happen?

Mr Nowak said that COVID-19 has changed what people are willing to do. He pointed out that people may have preferred to do the food shopping themselves or try on clothes first before buying them when COVID-19 wasn’t around. Morgan Stanley thinks that COVID-19 has brought forward the adoption of e-commerce by three years. He wrote (referring to the US):

Could reopening reverse that trend? We don’t believe so. We do expect slower growth in 2021, with consumers eager to spend again on experiences such as travel and restaurants, but the rising trendline for online adoption should continue. We estimate that e-commerce grew by about 40%, or $240 billion, in 2020—three times more than in 2018 and 2019. For 2021, after accounting for the anticipated release of pent-up spending for travel and other live experiences, we expect e-commerce to grow by roughly 9%.

Mr Nowak went on to say that the environment for real estate investment trusts (REITs) and physical stores may never be the same again because of COVID-19 pressures and the adoption of online shopping.

He also commented that last-mile logistics will become increasingly important as customers expect faster delivery of their shopping and food delivery. Mr Nowak commented:

Shared mobility, e-commerce, food apps and grocery delivery leaders have already opened up a significant total addressable market—perhaps as large as $2.6 trillion in offline U.S. consumer spending. Execution and real-time tracking will matter and the platforms with subscription offerings and product bundles could see an advantage in the race to drive retention/frequency.

More reading

• 2 quality ASX dividend shares to buy next week
• 2 explosive mid-cap ASX shares to buy and hold
• 3 reasons why the Kogan.com (ASX:KGN) share price could be a great buy
• 3 blue chip ASX shares with dividend yields over 5% today
• Woolworths (ASX:WOW) share price down as it savours potential Oakridge Wines purchase

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended ADAIRS FPO, Kogan.com ltd, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Will the ASX share e-commerce boom last? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/38zzlnS

Are you looking to add to your income portfolio in the near future? If you are, then you might want to look at the ASX dividend shares listed below.

Here’s what you need to know about them:

Coles Group Ltd (ASX: COL)

The first ASX dividend share to look at is leading supermarket operator Coles.

It has been a strong performer over the last couple of years and particularly so far in FY 2021. For example, last month it released its half year results and revealed an 8% increase in revenue to $20,569 million and a 14.5% increase in net profit to $560 million.

This was driven by favourable trading conditions brought about by COVID-19. And while these tailwinds are fading, the company’s Refreshed Strategy and focus on automation look set to support its growth over the coming years.

Goldman Sachs remains confident in its growth trajectory and recently reaffirmed its buy rating and $20.70 price target.

The broker is also forecasting a 62 cents per share fully franked dividend for the 12 months. Based on the current Coles share price, this represents a 4% dividend yield.

National Storage REIT (ASX: NSR)

Another ASX dividend share to look at is National Storage. It is one of the ANZ region’s largest self storage operators with a total of over 190 centres. From these centres, it tailors self-storage solutions to residential and commercial customers.

National Storage looks well-placed for growth in the coming years thanks to the favourable housing cycle. A thriving housing market traditionally leads to solid demand for self-storage solutions.

In addition to this, the company has development and acquisition plans that look set to increase the size of its network further and boost its growth inorganically.

Based on the current National Storage share price and its guidance for FY 2021, its shares currently offer a forward 4.25% yield.

More reading

• 3 blue chip ASX shares with dividend yields over 5% today
• Why Coles (ASX:COL) shares could be perfect for retirees
• 2 top ASX dividend shares with generous yields to buy
• Top broker tips Coles (ASX:COL) share price to climb 30% higher
• Leading broker upgrades Woolworths (ASX:WOW) shares to buy rating

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 quality ASX dividend shares to buy next week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3veU4XX

A number of mid-cap ASX shares are delivering explosive growth at the moment, partly due to COVID-19 effects.

Mid-cap ASX shares could be interesting ones to consider because they have more growth potential than large caps – just look at how much their profit is growing right now – but they’re large enough that they could be more reliable than small caps or microcaps.

No-one can say when elevated levels of growth will change, but these two mid-cap ASX shares could be ones to watch right now:

Bapcor Ltd (ASX: BAP)

Bapcor is a leading auto parts business across Australia and New Zealand.

The company operates a number of different businesses. Bapcor’s two key businesses are Burson and Autobarn. Burson provides auto parts to mechanic customers, whilst Autobarn is one of the biggest auto part retailers in the country. It also has a network of various wholesalers which are generally national leaders in their categories.

The FY21 half-year result included a high level of growth – total revenue went up 25.8% to $883.6 million, pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 38.5% to $145.6 million, pro forma earnings before interest and tax (EBIT) rose by 45% to $106.8 million and pro forma net profit after tax (NPAT) increased by 54% to $70.2 million.

Actual NPAT grew 49.7% to $67.7 million and pro forma earnings per share (EPS) went up 28.9% to 20.7 cents.

The mid-cap ASX share added 27 new company locations throughout the network, which means it now has 1,100 locations throughout Australia, New Zealand and Thailand.

Bapcor’s trade segment, which includes Burson, saw revenue growth of 12.3% with same store sales up 11%. Autobarn same store sales went up 37.1%.

The mid-cap ASX share said that an element of stimulus created elevated discretionary spending and increased DIY positively impacted demand. Bapcor also said that online sales increased by around 300%, with over 80% of that being click and collect.

Bapcor thinks that it has several avenues to drive further growth including network growth, operational efficiencies and an expansion of its own brand product range.

In January 2021, business performance continued at similar levels as the first six months. The company has large growth aspirations for Asia with its Burson division. 

Ansell Limited (ASX: ANN)

Ansell is another mid-cap ASX share that is experiencing high levels of growth because of demand for its protective clothing and gloves.

The company reported that its sales increased by 24.5%, with organic growth of 22.9% – this was a mixture of 12.3% volume growth and a 10.6% increase due to the price and mix of products.

Ansell’s healthcare division achieved organic growth of 37.3% with strong volume growth across all of its business units.

Total EBIT went up 60.6% year on year to $147.4 million. This was an increase of 64.3% in constant currency terms. Overall net profit grew 61.9% year on year to $106.5 million, with EPS going up 65.5% to 82.9 cents.

Despite COVID-19 being the cause of the current strong numbers, Ansell is actually expecting continued good strong over the longer-term. The mid-cap ASX share said:

Our expectations are that COVID-19 will continue to impact the world for some time. Assuming the pandemic is under control towards [the] end of FY22, GDP will accelerate further and depressed sectors such as automotive, oil and gas and transportation will return to growth while hospitals return to normal operations to manage down the pent up demand for surgeries and other procedures.

We expect to see strong demand for PPE for the next twelve months. Even when 70% of the population is vaccinated, elevated demand for most of our products will continue due to (a) enhanced safety practices at plants and hospitals, (b) better protection awareness with increased glove use per capita (particularly emerging markets), (c) elevated research & testing activities worldwide, (d) potential need for annual COVID-19 vaccinations and (e) improving industrial activity.

Ansell is expecting to generate EPS of between $1.60 to $1.70 in FY21.

More reading

• 2 COVID-19 amplified ASX shares to buy
• 3 reasons why the Bapcor (ASX:BAP) share price could be a buy
• ASX 200 slides lower, A2 Milk surges, Gold Road sinks
• Here’s why Warren Buffett prefers buybacks to dividends
• ASX 200 up 0.3%: Mesoblast raises US$110 million, tech shares rebound

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 explosive mid-cap ASX shares to buy and hold appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2OO1HDM

The S&P/ASX 200 Index (ASX: XJO) was on form again last week thanks partly to strong gains in the consumer discretionary and industrials sectors. The ASX 200 rose 0.8% over the five days to end it at 6,766.8 points.

While a good number of shares climbed higher with the market, some stood out with particularly strong gains. Here’s why these were the best performers on the ASX 200 last week:

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price was the best performer on the ASX 200 last week with a 14% gain. This was despite there being no news out of the corporate travel booker last week. However, with more leisure travelling expected to occur domestically because of government stimulus, some investors may believe this will trickle over into the corporate sector.

Appen Ltd (ASX: APX)

The Appen share price wasn’t far behind with a gain of 13% last week. This strong gain was driven by a rebound in the tech sector and bargain hunters snapping up the artificial intelligence data services company’s shares following a sharp pullback in recent weeks. Despite Appen’s rise last week, its shares are still down by almost 28% since the start of the year.

Silver Lake Resources Limited (ASX: SLR)

The Silver Lake Resources share price was on form last week and recorded an 11.3% gain. Investors were buying this gold miner’s shares after the price of the precious metal rebounded following a pullback in bond yields. And given how Silver Lake share price was down heavily year to date, investors appear to have decided that it was a particularly good way to gain exposure to the sector. One broker that would agree is Macquarie. Late last month it put an outperform rating and $2.40 price target on its shares. The Silver Lake share price ended the week at $1.58.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price was a strong performer and charged 11.1% higher over the five days. This was despite there being no news out of the biopharmaceutical company last week. However, given that the company’s key drug, Scenesse, treats erythropoietic protoporphyria (EPP), investors may be hopeful that the rollout of COVID vaccines in the Northern Hemisphere will lead to increased mobility and ultimately stronger demand for the drug. EPP is a condition where sufferers have a hypersensitivity of the skin to sunlight. Demand for Scenesse softened during lockdowns.

More reading

• What exactly is a ‘balanced’ ASX share portfolio?
• These were the worst performing ASX 200 shares last week
• ASX 200 climbs, Westpac in the clear, Nine reveals a WIN-ning deal
• Here’s why the Challenger (ASX:CGF) share price is up 80% in 6 months
• Why the Corporate Travel Management (ASX:CTD) share price just hit a 52-week high

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

from The Motley Fool Australia https://ift.tt/3qDePch

One of the most overused words in the world of ASX share market investing is surely ‘balanced’. Every financial advisor under the sun will tell you the benefits of having a ‘balanced’ or ‘diversified’ portfolio.

It’s even what most superannuation funds usually call their most popular portfolio options. And yet it’s one of the topics that many investors struggle with the most. Perhaps even inadvertently.

So what does this fabled concept really mean?

When people talk about a ‘balanced’ portfolio or a ‘diversified’ portfolio, they are essentially talking about the same thing. ‘Balanced’ usually refers to a share portfolio’s ability to weather adverse events, either in a specific company, a specific sector, or even an entire economy.

Let’s take an ASX dividend investor. If this investor had a portfolio of eight dividend-paying companies, and five of them were ASX bank shares, the investor might think they are diversified because they hold five different banks.

Yet any bank that operates in Australia is exposed to the same risks. If there is a problem with the Australian banking system, all banks will be affected. If there is a change to company tax rates, all banks will be affected. And the investor’s portfolio will be too. Dramatically. As such, this would not normally be considered a ‘balanced portfolio’.

Instead, consider this. The ASX dividend investor owns just their favourite ASX bank, among a portfolio of 15 other top ASX dividend shares. In this scenario, the investor is far more protected against bank-specific woes. Hence, the portfolio is far more ‘balanced’.

Perfectly balanced, as all things should be?

But balance doesn’t always just mean diversity amongst ASX shares. We are still one small-ish country in a very big world. Our currency is also rather fickle due to our economy’s exposure to the volatile mining industry. That’s why you’ll find that Australian shares as a whole usually make up less than half of the typical ‘balanced’ superannuation fund.

Most of these balanced funds will have some international shares thrown in, partly to balance out currency risk. They’ll also usually hold assets that aren’t shares at all, such as cash, property or government bonds. These assets can balance out the volatility of shares, which is a big concern for some investors.

So how much balance should we all aim for? Well, that’s a question with no right or wrong answer – nothing can be ‘perfectly balanced’ anyway.

If you know a sector inside and out, warts and all, such as tech, you might not feel the need to diversify away from it at all. If you don’t know too much about investing in general, or find it utterly boring, you might want to go for as much diversification as possible.

Perhaps if you’re comfortable with the volatility that shares can bring, you might not feel it necessary to invest in other safer asset like cash or bonds. There’s nothing wrong with a diversified portfolio of ASX shares, perhaps with some international ones thrown in as well.

The only right answer when it comes to how ‘balanced’ your portfolio should be is how comfortable you are with its balance in the first place. As long as you understand the risks and potential benefits of your choice, that is.

More reading

• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• ASX 200 climbs, Westpac in the clear, Nine reveals a WIN-ning deal
• Here’s why the Challenger (ASX:CGF) share price is up 80% in 6 months
• Goldman reaffirms its conviction buy on this ASX share on Yallourn shutdown

Motley Fool contributor Sebastian Bowen 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.

The post What exactly is a ‘balanced’ ASX share portfolio? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/38BtzSD

The S&P/ASX 200 Index (ASX: XJO) was on form again last week thanks partly to strong gains in the consumer discretionary and industrials sectors. The ASX 200 rose 0.8% over the five days to end it at 6,766.8 points.

While a good number of shares climbed higher with the market, some stood out with particularly strong gains. Here’s why these were the best performers on the ASX 200 last week:

Zip Co Ltd (ASX: Z1P)

The Zip share price was the worst performer on the ASX 200 last week with a disappointing 10.2% decline. Weakness in the tech sector due to concerns over rising bond yields and a broker note out of UBS weighed on the buy now pay later provider’s shares. In respect to the latter, UBS downgraded Zip’s shares to a sell rating with a $6.40 price target. This compares to the Zip share price of $8.59 at the end of the week.

Smartgroup Corporation Ltd (ASX: SIQ)

The Smartgroup share price was out of form and dropped 7.3% over the five days. A good portion of the salary packaging and fleet management company’s share price decline last week was driven by its shares trading ex-dividend. Eligible Smartgroup shareholders can now look forward to being paid its final fully franked dividend of 32 cents per share on 23 March.

Santos Ltd (ASX: STO)

The Santos share price wasn’t far behind with a 7% decline last week. This was driven by news that major shareholder ENN Group sold approximately 107.1 million shares, representing a 5.14% interest in Santos, at $7.33 per share. The energy producer advised that ENN has told it that it remains fully supportive of Santos’ strategy and future direction. It is also excited to remain its largest individual shareholder with a 9.97% stake.

A2 Milk Company Ltd (ASX: A2M)

The a2 Milk share price was out of form again last week and sank 5.8%. This latest decline means the infant formula company’s shares are now down 25% since the start of the year. A disappointing half year result, which included a second downgrade to its FY 2021 guidance, is the reason for its share price decline. Judging by the selling, investors don’t appear convinced that the company’s performance will turnaround quickly.

More reading

• ASX 200 climbs, Westpac in the clear, Nine reveals a WIN-ning deal
• Here’s why the Challenger (ASX:CGF) share price is up 80% in 6 months
• Goldman reaffirms its conviction buy on this ASX share on Yallourn shutdown
• Morgans just added this ASX 200 share to its model portfolio
• Why ASX income investors should consider this dividend ETF

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia has recommended SMARTGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/30K41yd

The S&P/ASX 200 Index (ASX: XJO) joined the global share market rally on Friday, with the index finishing 0.8% higher.

That comes after US share markets posted strong gains on Thursday (overnight Aussie time).

The tech heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) gained 2.5%, bringing it within 5% of its record highs after having entered correction territory (down 10%) just last week.

Meanwhile, the Dow Jones Industrial Average (INDEXDJX: .DJI) closed up 0.6% for a new all-time high.

Investors’ animal spirits have been stoked by the latest US$1.9 trillion stimulus injection waved through by United States President Joe Biden.

As Chris Gaffney, president of world markets at TIAA Bank puts it, “The administration has slipped a little bit of extra fuel to the equity markets with their bill. It’s going to be rocket fuel. We’re headed to new highs because of all that stimulus money that’s being put out there and it’s more broad-based than the first couple stimulus programs.”

Is the stimulus-fuelled ASX 200 rally sustainable?

Much of the future performance of the ASX 200 remains dependent on how well Australia and the world emerge from the pandemic. And much, of course, depends on how well the 200 companies that make up the ASX 200 perform themselves.

But there’s no arguing that ASX 200 shares have enjoyed major tailwinds from government stimulus packages. And as we’ve witnessed with the passage of new US stimulus measures, it’s more than just the Aussie government pulling the levers.

This concerted effort by leading global governments and central banks makes the stimulus outlook more sustainable. At least over the medium term.

In Europe, for example, the European Central Bank (ECB) reported that it plans to increase the pace of its asset purchases.

Noting the risk of rising interest rates for market financing, Lagarde said (quoted by the Australian Financial Review):

We will continue to conduct net asset purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,850 billion until at least the end of March 2022.

She added that the ECB “expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year”.

Then there’s this, from Bloomberg:

Japan needs to double the nearly [US]$700 billion it’s already budgeted in extra spending to ensure a recovery from the pandemic, says an influential ruling party lawmaker… Kozo Yamamoto.

Saying the Bank of Japan (BoJ) can’t do all of the heavy lifting itself, Yamamoto adds, “We need to make a bold move along the lines of what the US is doing. Some people are in dire circumstances.”

Foolish takeaway

While the future will always remain uncertain, investors worried that the ASX 200 could crash because global stimulus efforts are reined in too soon and too quickly can most likely rest easy.

At least on that front.

More reading

• Wilson Asset Management (WAM) thinks these 2 ASX shares are a buy
• Nasdaq wants its boards to be more diverse
• Macquarie Group (ASX:MQG) is hungry for assets as its share price grows
• Qantas (ASX:QAN) successfully trials COVID vaccine app in preparation of return to international travel
• 2 quality ETFs to buy in March

Motley Fool contributor Bernd Struben 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.

The post Worried an end to global stimulus will crash the ASX 200? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3l9Huod