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The Afterpay Ltd (ASX: APT) share price continues to surge higher in 2021. Shares in the Aussie buy now, pay later (BNPL) provider jumped above $150 per share on Friday to close the week at a new record high of $151.30.

Afterpay share price hits a new record high

With last week’s gains in the Afterpay share price, the company now has a market capitalisation of $43.1 billion. This means Afterpay is now sitting firmly among the ASX’s heavy hitters by size.

For context, Afterpay’s current value makes it worth more than Telstra Corporation Ltd (ASX: TLS) and Transurban Group (ASX: TCL).

That’s despite Telstra recording $23.7 billion in total income for FY2020 compared to Afterpay’s $519.2 million total income for the same period.

Why is the BNPL share surging higher?

The Afterpay share price has been something of a phenomenon since listing in May 2016. Back then, shares in the BNPL group were worth $1 each with a $125 million market capitalisation.

That means a $10,000 investment in the Afterpay initial public offering (IPO) would have netted early investors a whopping $1,513,000 today.

A successful international expansion while maintaining low bad debts has been key to Afterpay’s success. That has seen the company continue to build strong underlying sales and broaden its merchant network across Australia, the United States and the United Kingdom.

The catalyst for last week’s new record high was an update from international payments giant PayPal. On Friday PayPal released its fourth quarter results including an update on its growing BNPL operations.

Despite a strong update from a growing competitor, Goldman Sachs noted that PayPal’s update bodes well for demand in the US market. That means despite increasing competition, there remains a potentially lucrative market capable of sustaining many BNPL operators.

Foolish takeaway

The Afterpay share price continues to climb in 2021 as the BNPL share hit yet another record high by Friday’s market close.

That means the Aussie company is now amongst the largest companies within the S&P/ASX 200 Index (ASX: XJO), sitting just outside the top ten as at the close of last week’s session.

More reading

• 2 ASX 200 shares to buy for income
• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal
• 5 things to watch on the ASX 200 on Monday
• Could these exciting small cap ASX shares be the next big thing?
• Why ASX miners will get a double tailwind from Biden’s US$1.9tn stimulus

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended 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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Australia’s medical marijuana industry was celebrating last week, as it became legal to sell cannabidiol (CBD) products in chemists and pharmacies. A decision by the Therapeutics Goods Administration (TGA) to approve the sale of low-dose CBD products over-the-counter means adults will be able to purchase these products without a prescription.

CBD, which occurs naturally in marijuana plants, can help relieve pain, anxiety, insomnia and reduce cancer-related symptoms and side effects. Unlike THC, which is the main psychoactive cannabinoid found in marijuana, CBD does not make users ‘high’. 

The TGA’s decision means adults will be able to purchase a maximum daily dose of 150mg of CBD over-the-counter in oral and sublingual formulations. CBD topical creams and vaping products will continue to require a doctor’s prescription.

The change is a positive development for ASX cannabis shares, which have been lobbying for easier access to medical marijuana products. But don’t rush out to your nearest pharmacy just yet — no specific CBD products have been approved for sale so far. 

Australian cannabis companies are working hard to get products approved for sale, and sales of CBD products are expected to boom over the coming months as products come to market. This will create a significant opportunity for ASX cannabis shares. We take a look at how some of the largest ASX cannabis shares are performing in light of this development. 

Althea Group Holdings Ltd (ASX: AGH) 

Althea is a producer, supplier, and exporter of pharmaceutical-grade medicinal cannabis products. Currently operating in Australia, the United Kingdom, and Germany, the company has plans to expand into emerging markets throughout Asia and Europe. The Althea share price has been on the rise since the TGA’s decision was announced in December, gaining 23% from a low of 42 cents. Shares in Althea are currently trading at 52 cents apiece. 

Althea has welcomed the TGA’s decision and is exploring registration options for current and future products. Even before the decision, Althea was performing strongly. In the company’s December quarter, Australian revenues increased 29% (compared to the September quarter), and UK revenues grew 90% month on month in December. 

Germany’s health department granted all necessary licences for the sale and distribution of Althea products in Germany late last year. An initial shipment of products is en route to the country. Althea also operates a manufacturing plant in Canada, which entered an agreement to manufacture three cannabis-infused beverages during the December quarter.

Expansion into South Africa is on the cards, with a wholesale supply agreement signed under which Althea-branded products will be imported for sale and distribution in the country. The first shipment of products under the agreement is expected to be delivered in the second quarter of 2021. This represents a significant opportunity for Althea, with the South African legal medicinal cannabis industry expected to be worth US$667 million by 2023. 

Auscann Group Holdings Limited (ASX: AC8) 

Auscann has a pipeline of proprietary cannabinoid-based pharmaceutical products in development and has voiced its support for the TGA decision to make cannabinoid products available over the counter. The decision means a number of Auscann’s CBD products in development have the potential to be registered as pharmacy-only medicines.

CEO Nick Woolf has said, “the TGA decision is a positive outcome for the industry. We are well advanced in developing compliant CBD-only products that could be registered as over-the-counter medicines.” 

Auscann is in the process of acquiring Cannpal Animal Therapeutics Ltd (ASX: CP1), a move that will add breadth and depth to the product line.

In the December quarter, Auscann completed a restructuring program to reduce cash burn, with expenditure focused on value-adding R&D. Utilising its state-of-the-art medicinal cannabis facility in Western Australia, Auscann is advancing the development of a hard-shell capsule product containing up to 150mg of CBD. This CBD-only product candidate is being formulated for approval as a pharmacy-only medicine.

Auscann’s share price has also risen off the back of the TGA decision, gaining 28% since 1 December 2020. Auscann shares are currently trading at 18 cents a share. 

Zelira Therapeutics Limited (ASX: ZLD)

Zelira is a therapeutic medicinal cannabis company with a portfolio of proprietary revenue-generating products and a pipeline of products undergoing clinical development.

In the December quarter, Zelira launched its HOPE products in Australia, which are targeted at patients with autism. Available through the TGA’s special access scheme, the products are now working their way via authorised prescribers into the market. A new licencing deal was also announced to distribute HOPE products in Washington DC late last year. Washington has reciprocity arrangements in place with 32 other US states, meaning patients in these states will be able to legally purchase HOPE products at an approved Washington dispensary. 

Zelira announced the launch of its proprietary CBD toothpaste in December, which will be distributed in the USA through retail stores such as Bed Bath & Beyond and e-commerce platforms such as Amazon. Discussions regarding distribution in networks outside the US are ongoing.

Sales of Zelira’s products have been in line with forecasts, although they were impacted by COVID lockdowns. Increasing sales are forecast as the company builds market awareness of its products and market conditions improve thanks to the roll-out of the COVID vaccine internationally.

Zelira’s share price spiked late last year following the TGA’s announcement but has since fallen back to levels seen in November 2020, with shares currently trading at 7.6 cents. 

What’s next for the medical marijuana industry? 

The availability of CBD products over the counter is a step towards increasing social acceptance and reducing the stigma often associated with medical marijuana products.

CBD products are expected to start to become available in the coming months – each product that goes on sale requires individual approval by the TGA. The market is expected to be competitive, with early entrants potentially benefiting from a first-mover advantage.

For ASX cannabis shares, the race is on to make a mark in the over-the-counter CBD space. 

More reading

• Up in smoke! Why ASX cannabis shares are having a bleary day
• What does the Biden administration mean for ASX shares? 
• The sector that’ll grow 480% this year, expert says
• Why the Althea (ASX:AGH) share price is flying high this morning

Motley Fool contributor Kate O’Brien 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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Little Green Pharma Ltd (ASX: LGP) shares will be on watch this morning after the company announced its first exports of cannabis flower medicines to Germany late Friday. The Little Green Pharma share price closed last Thursday’s session at 93.5 cents prior to entering a trading halt pending this announcement. 

How will the Little Green Pharma share price respond?

The Little Green Pharma share price will be in focus this morning after the company updated the ASX with this positive announcement shortly after market close on Friday.

According to its release, the company advised that it has shipped its first commercial shipment of cannabis flower medicines to Berlin-based Demecan.

Demecan is a company focused on the cultivation, importation and wholesale of medicinal cannabis in Germany.

The delivery, due to be completed some time this week, comprises 500 x 15g units of high-THC cannabis flower medicines. When the shipment arrives, the cannabis medicine will undergo ‘batch-testing’ before being released to the German public.

Previously, both companies conducted a 12-month audit and qualification process to ensure compliance with European and German regulations.

The purchase agreement in detail

Under the agreement, Little Green Pharma will supply Demecan with up to 1,000 kilos of cultivated dried cannabis flowers or 48,000 units of medicinal cannabis oil products per year. Either of the units can be combined during the course of the arrangement.

The 3-year deal, which begins on receipt of the first shipment delivery, excludes any minimum purchase quantities from Demecan.

Little Green Pharma noted that it does not consider the value of its initial shipment to be material.

Success on the horizon?

Little Green Pharma joins an exclusive group of international cannabis producers which can supply cannabis flower medicines to the German market. The company highlighted that it is only the second producer not requiring its cannabis flower medicines to be further treated upon delivery.

As published by ‘The Germany Cannabis Report’, Germany is Europe’s largest medical-grade cannabis market. It’s estimated that the sector will grow to 7.7 billion euros by 2028, with flower sales accounting around 21% in Germany.

Little Green Pharma plans to expand its revenue streams by offering cannabis flower medicines to Australian prescribers and patients this year.

Management commentary

Little Green Pharma managing director Fleta Solomon hailed the company’s progress, saying:

Our partnership with DEMECAN represents a significant foundation on which to build LGP’s access to the German market. For the past year, we have worked closely with DEMECAN through a highly rigorous audit and qualification process, to ensure LGP’s cannabis flower medicines meet all applicable EU GMP and German quality requirements.

In a particularly pleasing achievement, our cannabis flower medicines passed all microbiological testing without requiring irradiation; a testament to LGP’s ability to successfully cultivate and manufacture consistently high-quality cannabis flower medicines under indoor GACP and GMP conditions.

Share price snapshot

The Little Green Pharma share price has surged nearly 170% since its initial public offering (IPO) in February 2020. This is despite the company’s shares falling as low as 17 cents during the March 2020 crash. 

Based on the current Little Green Pharma share price, the company has a market capitalisation of around $77 million.

More reading

• Little Green Pharma (ASX:LGP) share price whiskers near all-time high
• What does the Biden administration mean for ASX shares? 

Motley Fool contributor Aaron Teboneras 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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There are some S&P/ASX 200 Index (ASX: XJO) dividend shares that are very interesting ideas for dividend income including:

APA Group (ASX: APA)

This ASX dividend share is one of the largest ASX 200 shares, it’s focused on energy infrastructure investments.

APA owns a large network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.

The business has increased its distribution to investors every year in a row for a decade and a half. At the current APA share price, it has a distribution yield of 9.25%.

In FY20 it reported growth across the business. It said that total revenue increased by 4.8% to $2.13 billion, earnings before interest, tax, depreciation and amortisation (EBITDA) grew 5.1% to $1.65 billion, operating cashflow went up 8.3% to $1.1 billion and net profit after tax (NPAT) grew by 10.1% to $317.1 million. APA decided to increase the FY20 distribution by 6.4% to 50 cents.

In December the company announced an estimated FY21 interim distribution of 24 cents per share for the six-months to 31 December 2020, which was an increase of 4.3%.

The ASX 200 dividend share funds its distributions from its operating cashflow. APA has announced new projects in recent months which could lead to higher distributions.

In November it announced that it’s investing up to $460 million to construct a new 580km pipeline in Western Australia to connect emerging gas fields in the Perth Basin to the Goldfields region, forming an interconnected WA gas grid. This is expected to be operational around the middle of the 2022 calendar year.

Premier Investments Limited (ASX: PMV)

This ASX 200 dividend share owns a number of different retail brands including Smiggle, Peter Alexander, Portmans, Just Jeans, Jay Jays, Jacqui E and Dotti. It also owns around 28% of Breville Group Ltd (ASX: BRG).

Using the FY20 annual dividend of $0.70 per share, it has a grossed-up dividend yield of 4.5%.

COVID-19 was disruptive for the company’s retail store network, particularly overseas. However, the online sales and the operating leverage that brings, has more than made up for the bricks and mortar stores.

In a trading update for the first 24 weeks of the first half of FY21, online sales were up 60% to $146.2 million and contributed 20.4% of total group sales (up from 13.4% last year). Premier said that its online sales deliver a significantly higher earnings before interest and tax (EBIT) margin.

In the same 24-week period, total global sales were only up 5% to $716.9 million.

Premier said that there was exceptional growth of gross profit across the business, with a particular good performance by Peter Alexander, Just Jeans and Jay Jays.

The ASX 200 dividend share now expects Premier Retail EBIT for the first half of FY21 will be in a range of $221 million to $233 million, up between 75% to 85%.

Premier Investments said that it has and continues to maintain a strong balance sheet.

At the current Premier Investments share price, it’s trading at 15x FY21’s estimated earnings.

More reading

• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal
• 5 things to watch on the ASX 200 on Monday
• Why ASX miners will get a double tailwind from Biden’s US$1.9tn stimulus
• 5 things to watch on the ASX 200 next week
• These were the best performing ASX 200 shares last week

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia owns shares of APA Group. 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 S&P/ASX 200 Index (ASX: XJO) has just capped off its best week since November 2020 and risen to its highest level in 11 months.

The index surged a significant 3.5% last week, propelling the ASX 200 to 6,840 points. That’s its highest level since the coronavirus-induced market crash in March last year. It also puts the index within a whisker of the psychologically-important 7,000 point mark, which was briefly crossed in 2020 before the pandemic struck.

The almost-singular reason for last week’s dramatic surge in value? The Reserve Bank of Australia (RBA).

RBA lights ASX’s fire

The RBA held its monthly meeting on Tuesday last week, as it does on the first Tuesday of every month. No one was expecting the RBA to announce a change in interest rates, given the Bank has previously flagged that rates will be ‘lower for longer’. And, as predicted, it didn’t.

However, what did come as a surprise was a doubling down of the Bank’s quantitative easing (QE) program, with another $100 billion of government bonds to be purchased by the RBA. Also unexpected was the news the RBA is not ‘expecting’ to increase interest rates until 2024. Yet that’s precisely the update investors received on Tuesday.

This unexpectedly dovish outlook on monetary policy was more than enough to get investors hot under the collar. This is because they know low interest rates and QE is generally a recipe for higher share prices, and such a long-barrelled commitment from the RBA essentially means this powerful tailwind isn’t going away any time soon.

The result was a party all round for ASX shares. ASX 200 blue chip shares, particularly the ASX banks, had a fantastic week, with National Australia Bank Ltd (ASX: NAB) topping the big four with a 7.18% rise over the week. Wesfarmers Ltd (ASX: WES) was also a strong blue chip performer, reaching a new record high on Friday.

ASX growth shares, especially in the tech space, did even better. Afterpay Ltd (ASX: APT) rose 12% over the week to close on Friday at a new record high of $151.30. That helped push the entire S&P/ASX All Technology Index (ASX: XTX) to its highest level ever.

How did the markets end the week?

We’ve already established that the ASX 200 had a phenomenal week, but let’s dig a little deeper.

Monday started the week off with a rise of 0.84%. Tuesday backed this up with a hefty 1.5% rise on the back of the RBA announcement. Then Wednesday saw investors pile on with another 0.92% gain. Thursday saw the only red day of the week with a 0.87% fall, but this was quickly forgotten on Friday when the index delivered another 1.11% rise. Since the ASX 200 started the week at 6,607.4 points and finished up at 6,840.5, it recorded a vigorous 3.53% gain for the week.

Meanwhile, the All Ordinaries Index (ASX: XAO) also finished up strong (and back well over 7,000 points), starting at 6,870.9 points and finishing up at 7,112.9 points, up 3.52% for the week.

Which ASX 200 shares were the biggest winners and losers?

Time for our most salacious segment, where we gossip over last week’s biggest winners and losers. So put the kettle on and fetch the biscuits while we start with the losers:

More reading

• Should short selling be banned?
• 5 things to watch on the ASX 200 on Monday
• 2 super ASX 200 shares to buy for your retirement portfolio
• Could these exciting small cap ASX shares be the next big thing?
• 2 strong blue chip ASX shares rated as buys by brokers

Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, CSL Ltd., and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Service Stream 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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Very few things get people fired up more than short selling.

To many investors, it’s a mechanism available only to elite professionals that profit from the misery of others.

And it’s not just retail investors that feel this way.

“Every company has a team of people working hard to make it a success,” Frazis Capital Partners portfolio manager Michael Frazis told The Motley Fool.

“It’s infinitely more rewarding to spend your days being positive and supportive of other people.”

The angst against short selling really climaxed the past week as the GameStop Corp (NYSE: GME) saga came to a head in the United States.

That chaos was triggered by a group of retail investors who mobilised to wreck hedge funds that were financially rooting for the retailer to sink.

u can’t sell houses u don’t own
u can’t sell cars u don’t own
but
u *can* sell stock u don’t own!?
this is bs – shorting is a scam
legal only for vestigial reasons

— Elon Musk (@elonmusk) January 28, 2021

https://platform.twitter.com/widgets.js

Those that are running publicly listed companies also understandably hate shorting.

“Short selling should be illegal,” said Tesla Inc (NASDAQ: TSLA) boss Elon Musk on Twitter in 2019.

Then as the GameStop frenzy took place last week, he reiterated his disdain.

“U can’t sell houses u don’t own. u can’t sell cars u don’t own. But u *can* sell stock u don’t own!?” he tweeted.

“This is bs – shorting is a scam. Legal only for vestigial reasons.”

In Australia, tech companies like Tyro Payments Ltd (ASX: TYR) and WiseTech Global Ltd (ASX: WTC) have had their problems too with short sellers.

If it’s so bad, should short selling simply be banned?

The defence for short selling

According to UNSW Business School associate professor Mark Humphery-Jenner, shorting has an important function in a free and open market.

“Short selling is fundamental to ensuring correct market prices,” he said. 

“Short sellers make market prices more efficient and incorporate more information more quickly into market prices so that prices reflect firms’ true values.”

Shorting ensures what’s labelled “market efficiency”, Humphery-Jenner added. It assists companies to raise capital by providing confidence to investors that they’re not outrageously overpaying for shares.

“Short selling is not manipulative per se, because the costs involved in manipulating prices through shorts are often prohibitive, and regulatory scrutiny is ample enough to prevent it.”

Frazis and his fund used to short until they shifted to long-only a couple of years ago. He agreed that shorting is an expensive activity. 

“It costs a fortune to run a short book. Shorts can cost 2% to 4% to hold a year, and sometimes a lot more,” he said.

“We plan to be in business for 30 years, so that adds up to a staggering amount. The real money in life is made by owning successful businesses for extended periods of time.”

But doesn’t shorting hurt companies and workers?

Shorting and short reports can certainly be stressful to the target business and its shareholders.

But Humphery-Jenner pointed out the act of shorting itself doesn’t hurt the business or people.

“Short sellers do not impact corporate fundamentals. Short sellers do not cause company bankruptcies. Short sellers do not cause lower earnings. Short sellers do not cause unemployment,” he said.

“Indeed, it is not even clear that the presence of short-sellers is per se related to lower returns.”

He added short selling doesn’t “generally place long term downward pressure on [stock] prices”.

“Rather, it is plausible that because short sellers can be active, people have more confidence in prices, causing more pricing accuracy and higher returns.”

Even if it has no long term financial impact, there’s no doubt short selling can feel icky to many.

Frazis told The Motley Fool that it’s not a sustainable investment strategy anyway.

“We’ve noted before that when bearish investment professionals heavily short a widely loved company, the love tends to win out,” he said.

“Shorting changes your mindset. It brings out your cynicism. You do well when others do not.”

More reading

• To short or not to short? GameStop (NYSE:GME) ripple effect endures
• Short sellers doubling down on these ASX stocks despite the GameStop saga
• GameStop, AMC trades temporarily blocked on Square’s Cash App
• RBA stimulus to fuel ‘raging bull market’ in ASX shares. Should you go all in?
• Did Robinhood lose its investor base forever?

Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia owns shares of WiseTech Global. 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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Are you planning on adding some growth shares to your portfolio? Before you make your purchases, you might want to take a look at these shares.

All three have been named as buys and tipped to deliver strong growth over the long term:

Bravura Solutions Ltd (ASX: BVS)

Bravura Solution is a provider of software and services to the wealth management and funds administration industries. It has a growing portfolio of products being used by financial institutions across the world. These include the Sonata wealth management platform and the Midwinter financial planning software. And while COVID-19 and Brexit are weighing on its performance this year, its long term outlook remains very positive. Goldman Sachs remains positive and has a buy rating and $4.20 price target on its shares.

Kogan.com Ltd (ASX: KGN)

This ecommerce company is another growth share to consider. Kogan’s growth has gone into overdrive during the last 12 months after the pandemic accelerated the shift to online shopping. This led to significant customer, sales, and earnings growth during this time. The company has also bolstered its growth through a couple of bolt-on acquisitions. The most notable being its $122 million acquisition of online retailer Mighty Ape. Credit Suisse is very positive on its outlook and believes Kogan is well-placed for growth in the coming years thanks to an increase in online spending and its expanding product range. The broker has an outperform rating and $21.08 price target on its shares.

Nearmap Ltd (ASX: NEA)

Nearmap is a leading aerial imagery technology and location data company with operations in the ANZ and North American markets. Management appears confident that Nearmap is well-positioned for growth over the 2020s and is aiming to deliver annualised contract value (ACV) growth of 20% to 40% per annum over the period. It expects this to be driven by new growth initiatives, geographic expansion, and the launch of its latest AI product. Last week analysts at Goldman Sachs upgraded Nearmap’s shares to a buy rating with a $2.75 price target. Goldman believes its technology is market-leading and expects the company to benefit from a sharp economic recovery in the US market after COVID headwinds ease.

More reading

• Top brokers name 3 ASX shares to buy next week
• ASX 200 rises 1%, Zip soars, REA reports
• Goldman Sachs names 2 growing ASX dividend shares to buy
• 2 explosive ASX growth shares to buy immediately
• 2 compelling ASX shares to buy in February 2021

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 Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Nearmap Ltd. The Motley Fool Australia has recommended Bravura Solutions 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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There are some quality ASX shares that could be worth owning for the long-term.

Here they are:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

This is an exchange-traded fund (ETF). One of the advantages of an ETF is that it allows investors to buy a large group of businesses through a single investment. They can also be very cheap in terms of the annual management fee. 

The purpose of this ETF is to provide exposure to many of the world’s largest companies listed in major developed countries. Vanguard says that it offers low-cost access to a broadly diversified range of shares that allow investors to participate in the long-term growth potential of international economies outside Australia.

This is a truly global ETF. Countries that have an allocation of more than 0.3% include: the United States, Japan, the United Kingdom, France, Canada, Switzerland, Germany, Netherlands, Sweden, Hong Kong, Denmark, Spain, Italy, Singapore, Finland and Belgium. The US gets the bulk of the allocation, with a weighting of just over two thirds of the ETF.

This ASX share provides exposure to a number of different sectors. Industries with a weighting of more than 5% include: information technology (22.5%), health care (13%), financials (12.3%), consumer discretionary (12.3%), industrials (10.6%), communication services (9%) and consumer staples (7.7%).

In terms of the actual positions that it owns, its biggest 10 holdings at the end of December 2020 were: Apple, Microsoft, Amazon, Alphabet, Facebook, Tesla, Johnson & Johnson, JPMorgan Chase, Visa and Procter & Gamble.

There are plenty of recognisable names further down the portfolio list like Walt Disney, Berkshire Hathaway, Nvidia, Mastercard, PayPal, Adobe, Netflix, Coca Cola, PepsiCo, Walmart, Salesforce.com, Nike, LVMH (Louis Vuitton Moet Hennessy), Costco and so on.

The ETF has an annual management fee of 0.18% per annum. The net returns over the longer-term has been fairly consistent. Over the last three years the net return per annum has been 11.3%, over the last five years the net return has been 11% per annum and since inception in November 2014 it has returned and average of 12% per annum.

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical describes itself as Australia’s leading ethical investment manager. It says that it provides investors with investment management products that align with their values and provide competitive returns. Investments are guided by the ‘Australian Ethical Charter’ which shapes its ethical approach and underpins both its culture and its vision.

The ASX share has been steadily growing its funds under management (FUM) over time, which is helping the financials.

In FY20 it grew its revenue by 22% to $49.9 million and underlying profit after tax (UPAT) went up 42% to $9.3 million. Excluding the impact of its performance fees, revenue and UPAT grew by 15%.

The group’s FUM went up 19% to $4.05 billion over the year, helped by net inflows of $660 million (up 100%). Customer numbers increased by 20%.

In the three months to 30 September 2020, the company saw a 6.5% increase of FUM to $4.32 billion.

The ASX share’s management has advised that for the six months to 31 December 2020, UPAT is expected to between $4.6 million to $5.1 million, which would be a mid-point increase off 11% compared to the prior corresponding period. Strong FUM growth was offset by the impact of superannuation fee reductions.

The latest update from Australian Ethical has been the quarterly update for the three months to 31 December 2020. FUM increased by another 16.9% to $5.05 billion.

More reading

• Looking for diversification? Try this ASX ETF
• 2 ETFs to buy for strong diversification
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• 2 high quality ETFs for ASX investors to buy today
• ASX 200 rises 0.4%

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 Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. 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.

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If you’re fed up with the low interest rates, you’re not alone. The good news is that the Australian share market is home to a large number of shares with attractive dividend yields.

Two that have yields above 4.5% and could be worth looking closely at are listed below:

Charter Hall Social Infrastructure REIT (ASX: CQE)

Charter Hall Social Infrastructure REIT is a real estate investment trust that invests in social infrastructure properties. 

At present the company owns a total of 371 properties across the ANZ region worth $1.3 billion and has a sky high 99.5% occupancy rate. These properties include childcare centres and government buildings such as bus terminals, emergency services command centres, and council properties.

Management believes that targeting these types of assets will result in high tenant retention rates over the long term and ongoing capital growth.

One broker that is a fan of the company is Goldman Sachs. It has a conviction buy rating and $3.35 price target on its shares. Goldman is also forecasting a 15 cents per share dividend in FY 2021.

Based on the current Charter Hall Social Infrastructure REIT share price, this represents a 4.85% yield.

Super Retail Group Ltd (ASX: SUL)

Another dividend share to consider is Super Retail. It is the company behind popular retail store brands BCF, Macpac, Rebel, and Super Cheap Auto.

With international borders closed, Super Retail has been one of the retailers to benefit most from a redirection of consumer spending. So much so, it is expecting to report a 23% increase in half year sales this month.

And thanks to margin expansion, management expects its half year profits to more than double. It is forecasting normalised net profit after tax in the range of $174 million to $177 million. This will be a 135% to 139% increase on the prior corresponding period.

Goldman Sachs is also positive on Super Retail. It has a buy rating and $14.80 price target on its shares. In addition, its analysts are expecting the company to pay a fully franked dividend of 78 cents per share in FY 2021. Based on the latest Super Retail share price, this represents an enormous 6.8% dividend yield.

More reading

• 2 ASX dividend shares with very attractive yields
• The ASX small cap with the best global expansion potential may not be tech
• 3 ASX dividend shares rated as strong buys by brokers
• 2 quality ASX dividend shares with attractive yields
• Leading broker tips Super Retail (ASX:SUL) share price to rocket higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a very positive week with a strong gain. The benchmark index rose 1.1% to 6,840.5 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to rise

The ASX 200 is expected to open the week slightly higher. According to the latest SPI futures, the benchmark index is poised to rise 5 points at the open. This follows a positive end to the week on Wall Street, which saw the Dow Jones rise 0.3%, the S&P 500 climb 0.4%, and the Nasdaq push 0.6% higher. The S&P 500 climbed 4.7% over the five days, which was its best weekly performance since November.

Oil prices climb

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could start the week with a gain after oil prices pushed higher. According to Bloomberg, the WTI crude oil price rose 1.1% to US$56.85 a barrel and the Brent crude oil price climbed 0.9% to US$59.34 a barrel. Oil prices hit their highest levels in a year after rising ~6% for the week.

REA Group shares given buy rating

The REA Group Limited (ASX: REA) share price will be on watch this morning after analysts at Goldman Sachs retained their buy rating and lifted their price target on the real estate listings company’s shares to $159.00. This follows the release REA Group’s half year update last week. Goldman’s analysts “continue to believe the FY22 outlook remains extremely robust, forecasting +17% EBITDA growth”

Gold price pushes higher

It could be a positive day for gold miners such as Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) after the gold price pushed higher on Friday. According to CNBC, the spot gold price rose 1.2% to US$1,813.00 an ounce. This couldn’t stop the precious metal from recording a 2% decline for the week.

Zip to list in the US?

The Zip Co Ltd (ASX: Z1P) share price will be one to watch amid speculation the company could be considering a secondary listing in the United States. This is expected to give the company greater access to US capital markets. According to the AFR, management will spend the next few days in front of US investors

More reading

• Could these exciting small cap ASX shares be the next big thing?
• Why ASX miners will get a double tailwind from Biden’s US$1.9tn stimulus
• 5 things to watch on the ASX 200 next week
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week

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 has recommended REA Group 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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