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ASX buy now, pay later shares continued to storm higher in the quarter ended 30 September, reporting record results on expanding markets. One of the few sectors to flourish during the COVID-19 crisis, the buy now, pay later (BNPL) industry now has continued to gain ground as consumers move online to shop. BNPL accounted for 8% of all ecommerce payments in 2019, according to Mergermarket, and is predicted to double in the next 3 years. 

Regulatory concerns that plagued the industry late last year seem to have been put on the backburner as authorities focus on combating the pandemic. The Australian Transaction Reports and Analysis Centre (Austrac) recently gave Afterpay Ltd (ASX: APT) a clean bill of health, saying it would not take legal action over historical breaches of anti-money laundering laws. The threat of a hefty fine had loomed, but Austrac ultimately found Afterpay was a “low risk” business, deciding no further action would be taken.

With that in mind, let’s take a look at how ASX BNPL shares performed in the last quarter. 

Afterpay Ltd (ASX: APT) 

The Afterpay share price continued its steady upwards trajectory in the most recent quarter, with the BNPL giant’s market capitalisation recently topping $27 billion. Now firmly ensconced in the S&P/ASX 20 (ASX: XTL), Afterpay has seen customer numbers boom this year. The pandemic and associated increase in online shopping has worked in Afterpay’s favour, with customer numbers climbing towards the 10 million mark. 

The BNPL provider transacted a whopping $11.1 billion in underlying sales in FY20, 112% up on FY19. Afterpay’s annualised run rate is over $15 billion, with 90% of underlying sales from repeat customers. The company now has more than 55,000 active merchants across Australia, New Zealand, the United States, and the UK. 

Afterpay announced plans to expand into Europe in August. The EU has been identified as the next logical step for international expansion given its large millennial population, vast fashion and beauty retail markets, and significant debit card usage. With an addressable e-commerce market of over $494 billion, the EU represents a compelling value proposition for Afterpay. 

In September Afterpay announced a change of CFO, appointing Rebecca Lowde to the position. Lowde was previously Chief Executive of Salmat and CFO of Bravura Solutions Ltd (ASX: BVS). Afterpay says Lowde’s skills and experience will assist the company as it accelerates its growth to scale globally. Afterpay is looking to expedite its expansion into new markets in FY21 to leverage early mover advantages. New verticals are also expected to add to sales momentum.

Zip Co Ltd (ASX: Z1P)

The Zip Co share price also gained ground in the last quarter as investors favoured the BNPL sector. Zip Co investors were rewarded with record transaction volumes and revenue for the quarter. Quarterly transaction volumes were $943.1 million, up 96% year on year (YoY). Revenue was $71.7 million, up 88% YoY. Zip Co ended the quarter with 4.5 million customers and 34,400 merchants. 

The BNPL provider entered the S&P/ASX 200 Index (ASX: XJO) in the September quarter rebalance with a market capitalisation of around $3.6 billion. Zip Co also completed its acquisition of US player QuadPay during the quarter, which delivered US$70 million in monthly transaction volumes and over 2 million customers. Further growth is expected as US consumers increasingly turn to BNPL solutions. 

Zip Co is now well on its way to becoming a global BNPL provider. It currently operates across Australia, New Zealand, the United States, UK, and South Africa. Annualised total transaction volumes are north of $3.8 billion and annualised revenue over $280 million. The US market demonstrated significant growth in revenue and transaction volumes in the September quarter, up 50% and 42% quarter on quarter (QoQ), respectively. 

The company says the current quarter has begun strongly in all markets. The company has also teased a number of upcoming announcements on the product and merchant pipeline. Seasonally, the quarter ending 31 December is the strongest as it includes key spending dates such as Black Friday, Cyber Monday, Christmas Day, and Boxing Day. 

Sezzle Inc (ASX: SZL)

The Sezzle share price almost doubled over the last quarter, as the company reported record results. Its third quarter underlying merchant sales increased 231.5% YoY and 21% QoQ to US$228 million. Active customer numbers grew to 1.79 million, an increase of 178.1% YoY and 21.5% QoQ. Merchant numbers also grew, climbing 178.3% YoY and 29.7% QoQ to 20,890. 

“Our product offering continues to prove its resiliency as well as its necessity during these difficult times,” said CEO Charlie Youakim. “Our strong performance in 3Q is reflective of an improving Sezzle consumer profile along with the continued acceleration of ecommerce in the marketplace.” 

Repeat usage grew to 89% in the quarter ended 30 September. This metric, which is a key driver in lowering loss rates and improving net transaction margin, has been rising for 21 months straight. 

The company has seen rapid growth and attained material scale since its 2019 IPO. An $86.3 million capital raising was conducted in July to accelerate growth and strengthen Sezzle’s balance sheet. Proceeds will fund additional sales and marketing activities, as well as product enhancement and expansion costs. Investments will also be made to support market development in Canada and testing in other markets. 

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Kate O’Brien 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’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Temple & Webster Group Ltd (ASX: TPW) has seen its shares fall by 6.7% today. This means the Temple & Webster share price has lost 26.3% since the market opened on Tuesday last week. The slide began with the company AGM. While there has undoubtedly been some profit taking, many investors appear to be unnerved by insider selling of the two founders. 

Nonetheless, the quarterly update was beyond expectations. The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the September quarter was greater than all of FY20. Year to date revenues were also up, this time by 138% versus the previous corresponding period.

Moreover, retail NAB online sales index suggests the homewares and appliances category grew around 57% during the months of April to July. Meanwhile, Temple & Webster grew by 150% at the same time.

Is the Temple & Webster share price fall a problem?

CEO Mark Coulter recently spoke out about the company, its growth, and the recent share sales. The company’s stellar growth during FY20 was undoubtedly due to the much-talked-about shift to online shopping during the COVID-19 pandemic. However, Mr Coulter believes there is an air of inevitability about it. He believes it is only a matter of time before the company is larger than both Ikea and Harvey Norman Holdings Limited (ASX: HVN) in Australia. 

In an interview with Ticky Fullerton, in The Australian, Mr Coulter said:

In the very early days it did accelerate fairly quickly. Then like all businesses it reached a hard bit, you get all the scaling problems and then we jumped again. We bought a couple of our competitors, we did a jump, we listed, then we went back to the drawing board and thought about what the new Temple & Webster is.

It’s really the last few years that everything has worked together. It feels like the site is good, the range is good, the team is good, our customers services is good, our delivery experience is good and that’s made the Temple & Webster you see today.

Foolish takeaway

There are a number of takeaways that may impact the Temple & Webster share price. First, despite the founders selling off shares, the company is currently performing better than it has at any time in its history. Second, the times appear to suit the company. It has benefited from the pandemic shift to online shopping. Third, and finally, the company CEO clearly has a high level of ambition for the company.

According to its AGM presentation, Temple & Webster remains dedicated to regularly adjusting its product range, and deepening its digital advantage. 

More reading

• How did ASX retail shares perform in the latest quarter?
• Is Temple & Webster Group Ltd (ASX:TPW) still a buy?
• The best time to invest may feel uncomfortable
• Got $1,000? You should buy one of these 8 ASX shares
• The Adore Beauty (ASX:ABY) share price surged 10% higher today

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Apple (NASDAQ: AAPL) is set to report fiscal fourth-quarter earnings results on Thursday, but investors should temper their expectations. The company will face tough comparisons in several categories, most notably in the core iPhone business. The COVID-19 crisis impacted Apple’s supply chain earlier this year and led to delays in final testing, which subsequently pushed back the production schedule by a few weeks.

The iPhone 12 and 12 Pro launched on Friday, slightly later than usual, and after the fiscal fourth quarter had already closed at the end of September. In contrast, last year’s iPhone 11 lineup launched in late September.

A “lack of new products”

Morgan Stanley analyst Katy Huberty released a note last week warning that analysts’ expectations for the iPhone remain too high. The consensus estimate currently calls for 40.4 million iPhone units, which Huberty suggests is too optimistic. The analyst is modeling for iPhone unit volumes of just 33 million and iPhone revenue of $22.9 billion, translating into an average selling price of approximately $694.

“While results ahead of a product cycle don’t tend to influence investor sentiment, we see the potential for an expectations miss on the back of aggressive consensus iPhone expectations that don’t fully account for the lack of new products in the quarter,” Huberty wrote in a research note to investors. Instead of focusing on the iPhone, investors should look at other parts of the business, as well as guidance for the holiday shopping season.

While the Cupertino tech giant did have a virtual product event in September to unveil the Apple Watch Series 6 and iPad Air 4, the latter device didn’t ship until October. The smartwatch did launch about a week before the fiscal year ended, so some Apple Watch sales will be included in the upcoming earnings report.

The good news is that Huberty believes that demand for the newest iPhone is the strongest it’s been in years, pointing to lead times and shipping estimates. Separately, TF International Securities analyst Ming-Chi Kuo recently noted that pre-order volumes are up and that the product mix appears to be shifting toward higher-end Pro models, which bodes well for overall profitability.

Huberty is modeling for services revenue of $14.5 billion, which would represent both a new quarterly record and 10% sequential growth. The analyst is assigning a much higher valuation multiple to the booming services segment compared to hardware products, due to the highly profitable and recurring nature of services revenue. Apple is looking to hit 600 million paid subscriptions by year-end.

While the timing of the iPhone 12 launch will affect reported results, the more important thing will be how the new flagship smartphone sells in the coming quarters. On that front, Huberty is very bullish and tells investors to buy the stock if it dips after earnings.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Evan Niu, CFA owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Danakali Ltd (ASX: DNK) share price is sliding today, down 7.5% in late afternoon trading.

The potash miner, formerly known as South Boulder Mines, finds itself under pressure following this morning’s release of its investment update.

It’s been a challenging year for shareholders, who saw Danakali’s share price slump 50% during the COVID-19 market rout in February and March. Since the 23 March lows, shares have rebounded 24%, but remain down 36% year-to-date.

In comparison, the All Ordinaries Index (ASX: XAO) is down 6% so far in 2020.

What does Danakali do?

Danakali is a resource company focused on potash. Its aim is to develop its Colluli SOP Project in Eritrea, East Africa into a leading potash project providing potassium-bearing minerals for African and global agricultural production. Located 75km from the Red Sea, it’s one of the most accessible potash deposits globally.

The project is 100% owned by the Colluli Ming Share Company (CMSC), a 50:50 joint venture between the Eritrean National Mining Corporation (ENAMCO) and Danakali. Danakali expects that Colluli will provide a positive impact on infrastructure, job creation and sustainability in Eritrea.

Why did the Danakali share price slide today?

This morning’s ASX announcement provided investors with an update on the US$28.5 million (AU$40 million) Tranche 2 equity funding from the Africa Finance Corporation (AFC). Danakali stated it had been working in good faith with AFC. But the company now believes it’s unlikely it will be able to satisfy all the conditions precedent before the 21 November 2020 deadline.

It also reported that, despite not being able to complete Tranche 2 in accordance with the terms of the subscription agreement, AFC – Danakali’s largest shareholder – remains firmly committed to supporting the Colluli Project.

Commenting on the repayment snag, AFC’s CEO Samaila Zubairu said:

AFC’s mandate is to develop Africa and ensure that more of the value of the continent’s resources benefit the continent’s people through the creation of jobs and opportunities along with improving living standards.

AFC are fully committed to seeing the Colluli developed as quickly and safely as possible and look forward to working with key stakeholders, ENAMCO, Afreximbank and Danakali on this important objective and ensure the project is fully funded as soon as possible so production commences in 2022.

2022 is a little way off yet. But if Danakali can get the Colluli producing as planned, its share price could lift off from today’s 37 cents per share.

More reading

• Why the Adairs (ASX:ADH) share price is swinging lower today
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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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Investors that are interested in diversifying their portfolios by investing in international shares might want to consider some of the many exchange traded funds (ETFs) that are listed on the ASX.

But given the large number of ETFs for investors to choose form, it can be hard to decide which ones to choose over others.

In order to narrow things down for you, I’ve picked out two ETFs that I think would be great additions to most portfolios. 

Here’s why I think they could provide strong returns for investors over the long term:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The first option for investors to consider buying is the BetaShares NASDAQ 100 ETF. This ETF has a strong focus on technology and gives investors diversified exposure to a high-growth sector that is under-represented on the ASX. 

By investing in this fund, you’ll be buying a slice of a number of the biggest and brightest companies in the world. This includes tech behemoths Alphabet (Google), Amazon, Apple, Facebook, Microsoft, and Netflix. In addition, a number of other household names such as Starbucks, Tesla, and Zoom are included in the fund.

I believe the majority of the companies included in the fund have very positive long term outlooks. As a result, I suspect the Nasdaq 100 ETF could outperform the ASX 200 meaningfully over the next decade.

VanEck Vectors China New Economy ETF (ASX: CNEW)

Another exchange traded fund to consider buying is the VanEck Vectors China New Economy ETF. This fund gives Australian investors exposure to the growing Chinese economy through a total of 120 promising companies.

According to VanEck, this includes many of the most fundamentally sound companies in China which have the best growth prospects in sectors making up the New Economy. These are sectors such as technology, healthcare, consumer staples, and consumer discretionary.

As I’m very bullish on the Chinese economy over the next decade, I believe these companies are well-placed to grow with it and generate strong returns for investors.

More reading

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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 BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It hasn’t been a great day for Nick Scali Limited (ASX: NCK) shareholders, despite the company releasing a positive trading update.

On release, the Nick Scali share price shot to an intra-day high of $9.26, after trading lower during the morning. However, its shares have since retreated following a broader market fall. At the time of writing, shares in the furniture retailer are down 4.25% to $8.57.

What does Nick Scali do?

Nick Scali is an Australian retailer that focuses on selling furniture such as lounges, dining tables, chairs and entertainment units. The company imports more than 5,000 containers of furniture per year, with showrooms and distributions centres across Australia.

Nick Scali also operates in New Zealand on a smaller scale.

How did Nick Scali perform for Q1 FY21

The household furniture company reported a robust result for the quarter ending 30 September.

Written sales orders were materially higher over the previous year, in spite of COVID-19 store shutdowns. Retail trading remains ceased in Melbourne, and Auckland was affected for 4 weeks in August.

Total sales orders increased by 45% on the previous corresponding period, which is continuing to trend throughout October for Q2. Nick Scali advised that not including the closed stores, comparable store sales order grew by 59% in the 3 months of FY21.

Furthermore, online orders jumped 47% over the last quarter in FY20, as consumer spending habits shift. The company anticipates earnings before interest and tax (EBIT) to be higher than previously forecasted for FY21.

The strong demand in sales has led to a revised net profit after tax (NPAT) guidance for H1 FY21. Earlier estimates indicated NPAT would lift between 50% to 60% over the prior year. However, taking into consideration possible supply chain disruptions caused by the reduction in available shipping containers, NPAT was re-calculated. New projections suggest that the first half of FY21 will be 70% to 80% greater in NPAT than FY20.

Nick Scali said that any delays in receiving orders will flow on to the second half of FY21 as revenue.

Nick Scali share price summary

The Nick Scali share price has performed well since hitting an all-time low of $2.65 in March, rebounding to an all-time of $9.68 in August.

Nick Scali has a market capitalisation of $695 million and P/E ratio of 16.5 at the time of writing.

More reading

• Why Advance NanoTek, Macquarie Telecom, Nick Scali, & Viva Energy shares are dropping lower
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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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Pushpay Holdings Ltd (ASX: PPH) share price is having a remarkable run in 2020, having risen by almost 125% since January. The question is, has it run out of gas or will the Pushpay share price continue its momentum?

First, what exactly does Pushpay do?

In short, Pushpay is a fintech player that offers donor management tools to religious organisations and non-profits. It also sells the Church Community Builder software, a subscription-based church management platform that enables management of various church activities.

Pushpay is therefore doing business in a very niche market. You may initially think of this as a small niche, but the market size in donation giving reached US$124 billion in the US alone. I believe tipping and giving will always be part of the cultural norm in North America. For this reason, I think Pushpay’s business model will stand the test of time and continue to generate recurring revenues. 

Another interesting fact regarding Pushpay’s addressable market is that the faith sector has still not embraced the use of technology in a major way. Pushpay is positioning itself to close that gap by also offering a host of other apps that aim to increase an organisation’s membership. 

Pushpay is a first major mover in this space. Once a church signs up to the service, it becomes a deeply ingrained ecosystem for the organisation, making it inefficient for the church to withdraw from the service. This is another possible tailwind for Pushpay’s subscription revenue model going forward.

Pushpay’s latest financial position

In its last earnings report in June 2020, Pushpay announced a total revenue increase of 32% to US$128.8 million, while its customer base increased by 42% to reach 10,000. Considering there are more than 180,000 religious organisations in the US alone, one could argue that Pointsbet has really only begun to scratch the surface when it comes to client acquisition. 

According to the June statement, the total payment volume processed through Pushpay’s system was US$5 billion. Whilst this appears to be a significant amount, when you consider the entire giving market in the US, it only represents a 4% slice of that pie. To me, this indicates there is still a long growth runway there.

So is the Pushpay share price a buy?

Overall, I believe today’s Pushpay share price represents a solid, long-term play. The company’s recurring revenue model is stable, and should only increase as Pushpay adds more products to its suite of solutions.

In terms of the client base, Pushpay has still only acquired a fraction of the market. I believe there is still a massive opportunity for the company to expand into other religious denominations and non-profits, as well as to markets beyond the US, where 98% of its revenue currently comes from.  

The world is moving toward a cashless society and I believe that donations will also move in this direction.

As mentioned, the Pushpay share price has more than doubled this year. I feel there are two issues potential investors need to consider before making a decision to buy Pushpay shares. Firstly, Pushpay will release an interim results announcement on 4 November which is likely to provide greater insight into the company’s performance. Secondly, it could be prudent to wait for a slight pullback in the Pushpay share price to avoid the recent hubris gripping technology stocks. Having said that, I still believe Pushpay is a good buy-and-hold share with the potential to pay handsomely in the long term.

More reading

• 3 star ASX shares to buy for the rest of 2020
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dsunarto 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 has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Buying ASX shares for both growth and dividend income can be a tricky game. Only the strongest companies can afford to invest in their business at the same time as paying out dividends. So if you find a company that can manage both of these difficult feats, you know you might be onto a winner. So here are 2 such shares that I think offer this duality to investors today:

2 ASX shares to buy for growth and dividends today

Telstra Corporation Ltd (ASX: TLS)

Telstra is our first growth and dividends share to buy today. This might be something of a controversial pick. Telstra is not a company known for its strong growth prospects in recent years. In fact, it’s earnings have been going backwards for a while now due to the rollout of the national broadband network (nbn). However, I think there are a few strong growth avenues opening up for the telco, the best of which is 5G.

5G promises to offer superior speed and latency over the current 3G and 4G technology in use. It also offers the prospect of making the internet of things (IoT) into a reality. I fully expect Telstra to have the country’s best 5G network for the foreseeable future due to the heavy investment the company has been making over the past few years. If all goes well, this should convert 5G into a lucrative earnings stream for Telstra over the next decade.

But Telstra is also known for its dividends. The company recently all but confirmed that its current 16 cents per share dividend payouts would be continuing into FY2021. That would give Telstra shares a forward dividend yield of 5.81% on current prices. That’s a big fat tick in the income box as well.

MFF Capital Investments Ltd (ASX: MFF)

This is another share I would buy for both growth and income today. MFF is a Listed Investment Company (LIC) that invests mostly in a mid-sized portfolio of US shares. It’s largest current holdings are US payments giants Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA). It’s run by one of the best fund managers in the country in my view – Magellan Financial Group Ltd (ASX: MFG) co-founder Chris Mackay. I like MFF right now as it’s more of a contrarian play.

AS of 16 October, the company still has around 23% of its assets in cash, which it could deploy effectively if global markets were to take a dive in the short to medium-term future. The company has a stellar track record of growth behind it, but is also working on building its dividend income chops. The company has paid out 6 cents per share in dividends over the past 12 months, giving it a trailing yield of 2.12% today. However, the company has told investors that it wants to increase this payout to 10 cents a share over the next few years. As such, I think MFF is another top ASX share to hold for both growth and dividends.

More reading

• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• Buy these blue chip ASX shares for generous dividends in 2021
• 3 important rules to help you build wealth
• The best time to invest may feel uncomfortable
• Got $1,000? You should buy one of these 8 ASX shares

Sebastian Bowen owns shares of Magellan Flagship Fund Ltd, Mastercard, Telstra Limited, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Mastercard and Visa. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Mastercard. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The COVID-19 pandemic first struck in Wuhan, China, sending the city of 11 million people, the wider Hubei region and much of the nation into strict lockdown.

The extreme mitigation measures China immediately took placed the nation in the enviable position as one of the few to have contained the deadly virus.

But with today’s reports of renewed outbreaks, China again faces the prospects of an unchecked coronavirus spreading amongst its massive population.

What did China report?

China has reported 181 new cases of COVID-19 in its northwest Xinjiang region. Of those, 161 are people who do not display any symptoms of the disease. The government reported 20 new confirmed cases of people showing symptoms, as Chinese policy doesn’t count those with asymptomatic infections as confirmed cases.

Massive testing of some 4.8 million people is under way following what are the first new local infections since 14 October.

Why did the Aussie dollar slip on the news and what to expect from ASX shares?

The relative strength of the Australian dollar is based on more factors than we can list in this article.

But one prime driver that’s been keeping the Aussie at a relatively strong level is the high price or iron ore, Australia’s number one export earner. China, Australia’s number one purchaser of iron ore, uses it to make steel to fuel its massive infrastructure and building projects.

China’s voracious appetite for iron ore has been a key driver in keeping the price of the metal far higher than most analysts had forecast, currently at US$121 per tonne.

If the coronavirus manages to get ahead of Chinese authorities, it could see much of the Middle Kingdom’s factories shuttered again. If that happens it could quickly see the price of iron ore, and the Australian dollar, fall hard.

Remember, iron ore was trading for $81 per tonne in February. Not long after the Aussie dollar was trading for as little as 52 US cents in mid-March.

On today’s news the Australian dollar slid 0.3% to 71.18 US cents.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) looks to have reacted negatively to the news as well. The ASX 200 was down 0.3% around midday but has since rallied slightly.

Iron ore giant BHP Group Ltd‘s (ASX: BHP) share price is down 0.6% in that same time.

More reading

• ASX 200 Weekly Wrap: ASX snaps winning streak… just
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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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I think it’s a great time to start considering ASX dividend shares with big dividend yields.

It’s getting really hard to find income because of how low the official interest rate has gone. Plenty of good ASX dividend shares have seen their yields compressed as their share prices go higher.

Here are three ideas to really boost your income:

WAM Leaders Ltd (ASX: WLE)

WAM Leaders is a listed investment company (LIC) which is operated by the team at Wilson Asset Management (WAM). The lead portfolio manager is Matthew Haupt.

The idea of WAM Leaders is to provide an active approach to investing in the large caps on the ASX.

It owns some of the biggest businesses on the ASX in its portfolio like Macquarie Group Ltd (ASX: MQG), BHP Group Ltd (ASX: BHP), Goodman Group (ASX: GMG) and CSL Limited (ASX: CSL).

WAM Leaders also has a few ‘active’ picks outside of the ASX 20 in its top 20 holdings including Ramsay Health Care Limited (ASX: RHC), Challenger Ltd (ASX: CGF) and OZ Minerals Limited (ASX: OZL).

The performance of the WAM Leaders portfolio allows it to pay a steadily-growing dividend. It has a solid track record as an ASX dividend share. That’s very welcome in this era of COVID-19-caused dividend cuts.

Including dividend guidance for the upcoming FY21 half-year result, it offers a grossed-up dividend yield of 8.1%.

Pacific Current Group Ltd (ASX: PAC)

This is a boutique investment business that takes strategic stakes in global asset managers to help them grow. Pacific also brings its expertise to help managers grow, if they want help, so that the manager can focus on the investments.

I think that Pacific is one of the most promising, high-yield ASX dividend shares because of how fast its earnings may grow over the next few years. In FY20 it grew its underlying earnings per share (EPS) by 18% to $0.44. That allowed the board to increase the annual FY20 dividend to $0.35 per share. A dividend payout ratio of 80% is pretty high, but completely sustainable – particularly if the earnings keep going higher.

Excluding stakes sold and acquired during the year, funds under management (FUM) grew by 52% to $93.3 billion. Pacific thinks that asset gathering efforts could improve in FY21 with new commitments.

I think that the EPS and dividend can steadily grow over the next few years. At the current Pacific share price that makes the trailing grossed-up dividend yield of 8.1%.

Naos Emerging Opportunities Company Ltd (ASX: NCC)

This is another LIC, but it looks at the opposite end of the market to WAM Leaders. This Naos ASX dividend share targets small caps with market capitalisations under $250 million, which is the smallest end of the market.

Some examples of the shares it owns includes BTC Health Ltd (ASX: BTC), Experience Co Ltd (ASX: EXP) and Saunders International Ltd (ASX: SND).

Naos like to be long-term investors in businesses that the investment team has high-conviction in. That’s why Naos generally only has around 10 names in the portfolio.

This ASX dividend share has maintained or grown its dividend every year since the second half of FY13. That means it has a pretty reliable record compared to many other dividend stocks on the ASX.

At the current Naos Emerging Opportunities Company share price it currently offers a grossed-up dividend yield of 10.1%.

Foolish takeaway

Each of these ASX dividend shares offer really good starting yields. At the current prices I think I’d definitely go for Pacific because of its global growth potential and its expected continuing growth in FY21.

More reading

• Beat the low interest rate with these ASX dividend shares
• New WAM Alternative Assets LIC appoints portfolio manager
• 3 top global ASX dividend share ideas
• 2 little-known ASX dividend shares to buy for income
• Get paid huge amounts of cash to own these ASX dividend shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited and Macquarie Group Limited. The Motley Fool Australia owns shares of EXPERNCECO FPO. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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