Tag: Motley Fool

I think there are some ASX shares that are worth holding forever.

Not only are these businesses high-quality but they could be around for an extremely long time. That’s why I think the below three ASX shares may be worth holding forever:

Xero Limited (ASX: XRO)

Xero is a leading cloud accounting software business. It has only been around for a decade and a half but it has already made massive market share gains in New Zealand and Australia. It’s also growing really impressively in the UK, whilst making steady progress in the USA.

Accounting has been around for many hundreds of years. Using software is the best way to do it these days. Businesses need software to prepare their financials and lodge their tax returns

Xero is at the forefront of accounting software in the world. It allows accountants and non-accountants alike to easily do accounting and other business processes really easily, in an understandable way. It has loads of useful automation processes and time-saving tools. People will happily pay to save themselves time. 

Xero continues to invest in its product to provide the best service for subscribers. The regular monthly cashflow from those subscribers is very attractive considering Xero’s high retention rate and high gross profit margin. That’s great for an ASX share.

In FY20, Xero grew its gross profit margin from 83.6% to 85.2%. This is among the best on the ASX. I think Xero is going to be one worth holding for a very long time as it grows its market share internationally.

CSL Limited (ASX: CSL)

Staying healthy and alive is extremely important to everyone. CSL offers very important products across its various businesses. Its flu vaccines and plasma products are quality and big earners for the company. Its role in manufacturing COVID-19 shows how much Australia needs the healthcare giant.

The company was founded over a century ago, so it shows how much longevity the ASX share already has.

CSL invests hundreds of millions of dollars into research and development every year. This shows that you can think about CSL for the long-term because the company itself is investing for the long-term into new products. It’s the upcoming products that will unlock further earnings for the ASX share.

Unless humanity can somehow change biology, I think CSL’s services will be in demand for many decades into the future. Its high quality and essential products make it an ultra-long-term pick in my opinion.

A2 Milk Company Ltd (ASX: A2M)

Infant formula has been around for many decades. Young children obviously need nutrition and families are always going to pick products that they trust.

A2 Milk is regarded as a high-quality consumer brand which sells premium infant formula, milk and other dairy products.

Compared to many of the other large consumer product businesses, A2 Milk is fairly young at only two decades old. But it has become a juggernaut in the infant formula industry. It’s a real compliment to A2 Milk when other global giants try to copy A2 Milk’s products.

A2 Milk has a global growth strategy and it’s doing well at growing in China and the US. I think it’s going to be growing for many years to come, particularly into markets outside of China. Canada and the US look like very promising growth markets to me.

I think it’s one of the best ASX shares around. Its balance sheet alone is very strong with hundreds of millions of dollars, giving the company a strong position.

The recent decline in the A2 Milk share price makes me think today is a good time to buy shares. It’s valued at 24x FY23’s estimated earnings.

Foolish takeaway

I think these three ASX shares will be quality businesses and leaders in the industries in five years, ten years, twenty years and so on. I’d be happy to have any of them in my portfolio. Indeed, I’d be happy for each of them to be the biggest position in my portfolio. I think they’d be great ideas to hold forever.

More reading

• ASX 200 Weekly Wrap: Promises of easy money push ASX 200 to post-crash high
• 3 core holdings for a $100,000 ASX portfolio
• Is the CSL (ASX:CSL) share price a buy?
• 5 things to watch on the ASX 200 next week
• 3 brilliant ASX growth shares to buy

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 CSL Ltd. and Xero. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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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Every Monday I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Webjet Limited (ASX: WEB) continues to be the most shorted ASX share with short interest of 14.7%. Recent spikes in COVID-19 cases in Europe and the United States have sparked concerns that global travel markets could take longer to recover than expected.
• Speedcast International Ltd (ASX: SDA) has short interest of 10.6%. This embattled communications satellite technology provider’s shares have been suspended for most of 2020 whilst it undertakes a recapitalisation. Last week Speedcast advised that it has filed its restructuring plan and expects to emerge in the first quarter of 2021.
• InvoCare Limited (ASX: IVC) has short interest of 9.9%, which is down slightly week on week. Short sellers have been targeting this funerals company due to the impact that social distancing restrictions are having on its performance.
• Myer Holdings Ltd (ASX: MYR) has seen its short interest fall again to 9.5%. Short sellers may believe that this department store operator will be left behind by the structural shift to online shopping.
• Mesoblast Limited (ASX: MSB) has seen its short interest rise to 8.9%. This biotech company’s short interest has risen strongly since the US FDA didn’t approve its remestemcel-L application for steroid-refractory acute graft versus host disease (SR-aGVHD). Short sellers may believe it will struggle to gain approval even after additional trials.
• Galaxy Resources Limited (ASX: GXY) has seen its short interest slide to 8.9%. This lithium miner’s shipments, grades, and recoveries have been lower than expected this year. Combined with weak prices, FY 2021 looks set to be a tough year.
• Inghams Group Ltd (ASX: ING) has 8.7% of its shares held short, which is up slightly week on week yet again. Short sellers have been targeting the poultry producer due to higher input costs and an unfavourable shift in its sales mix.
• Flight Centre Travel Group Ltd (ASX: FLT) is back in the top 10 with short interest of 7.7%. As with Webjet, there are concerns that delays in the recovery of the global travel market could weigh on Flight Centre’s performance for longer than hoped.
• Bank of Queensland Limited (ASX: BOQ) has seen its short interest fall to 7.55%. Unfortunately for short sellers, this regional bank’s shares stormed higher last week after it delivered a stronger than expected full year result.
• CLINUVEL Pharmaceuticals Limited (ASX: CUV) has seen its short interest remain flat at 7.5%. The biopharmaceutical company has seen its short interest ease notably in recent weeks after announcing plans to extend the use of its SCENESSE product.

More reading

• Top brokers name 3 ASX shares to sell next week
• Top brokers name 3 ASX shares to buy next week
• 5 things to watch on the ASX 200 next week
• These were the worst performing shares on the ASX 200 last week
• Bank of Queensland (ASX:BOQ) among the latest buy ideas from brokers

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and InvoCare 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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I believe there are a number of interesting ASX dividend shares that could be good picks to buy for income to beat the very low interest rate.

The RBA doesn’t have many options of what it can do to assist the economy. I understand why the interest rate has been pushed as low as it has. However, it has made it really hard to generate any income for savers. ASX dividend shares like these might be the answer to the problem:

Pacific Current Group Ltd (ASX: PAC)

I think that Pacific looks like a really good dividend option at the moment. The company describes itself as a global multi-boutique asset management business committed to partnering with exceptional investment managers.

The idea is to invest in investment managers, help them grow with Pacific’s expertise and generate good long-term growth.

Some of Pacific’s investments performed very well in FY20. Asset manager GQG grew its own funds under management (FUM) from US$25.1 billion to US$44.6 billion in just one year. Excluding boutiques sold and acquired during the year, Pacific’s FUM grew by 52% to $93.3 billion.

It was this strength of the FUM that helped it grow its underlying earnings per share (EPS) by 18% to $0.44 which helped the FY20 annual dividend grow by 40% to $0.35 per share. That’s strong growth for an ASX dividend share. 

At the current Pacific share price it offers a grossed-up dividend yield of 7.9%. I think

WAM Leaders Ltd (ASX: WLE)

This is a listed investment company (LIC) which targets the larger shares on the ASX. It’s very capably run by the team at Wilson Asset Management (WAM).

WAM Leaders aims to actively move around in the large caps to provide shareholders with blue chip exposure, but not just a passive investment style.

Its gross portfolio return (before fees, expenses and taxes) has been comfortably more than the S&P/ASX 200 Accumulation Index. WAM Leaders’ portfolio has outperformed the index by 9.7% over the past year and 4.7% per annum over the past three years.

Some of its largest 20 positions at the end of September 2020 included: Challenger Ltd (ASX: CGF), OZ Minerals Limited (ASX: OZL), Downer EDI Limited (ASX: DOW) and Star Entertainment Group Ltd (ASX: SGR).

LICs like WAM Leaders can use the investment gains to fund a stable and steadily growing dividend, which is what WAM Leaders is doing.

At the current WAM Leaders share price it offers a grossed-up dividend yield of 7.6%. However, the WAM Leaders net tangible assets (NTA) is no longer trading at an obvious discount to the share price as it was before.

Australian United Investment Company Ltd (ASX: AUI)

AUI is another LIC that invests in large cap ASX shares, but this one is a long-term investor which owns its positions for the long-term.

It’s actually one of the oldest LICs around, it was founded in 1953 by the late Sir Ian Potter and The Ian Potter Foundation Ltd is today the company’s largest single shareholder.

AUI owns all of the recognisable names like CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), Transurban Group (ASX: TCL), Rio Tinto Ltd (ASX: RIO) and BHP Group Ltd (ASX: BHP).

One of the most attractive things about AUI is its dividend record. It’s a very reliable ASX dividend share. Its website outlines that it has grown or maintained its dividend every year going back to 1993.

Another great benefit of AUI is its extremely low operating cost. In FY20 its management expense ratio (MER) was just 0.12%, which is one of the lowest on the ASX.

At the current AUI share price it offers a grossed-up dividend yield of 6.2%.

More reading

• 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
• How to replace your entire wage with ASX dividend shares
• Get paid huge amounts of cash to own these ASX dividend shares

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 CSL Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of Transurban Group. 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.

The post Beat the low interest rate with these ASX dividend shares appeared first on Motley Fool Australia.

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Is it time to go all in on ASX shares right now? There are a lot of things that are going right at the moment in Australia.

Australia is in a really good position with regards to COVID-19. NSW is hardly seeing any new cases. Victoria is currently seeing single digit increases in daily cases with an outline of when retail and other sectors can finally start reopening.

This is in stark contrast to other areas around the world like the UK and Europe which are seeing rising numbers and tightening restrictions. The US is also seeing rising numbers again.

Getting in complete control of the virus will hopefully allow the Australian economy to operate much closer to normal than if Australia looked closer to the situation that’s happening in the northern hemisphere.

So where does that leave ASX shares?

Not every business is going to thrive (or even survive) in this environment because of COVID-19 impacts. Just look at what’s happening with businesses like Qantas Airways Limited (ASX: QAN) and Sydney Airport Holdings Pty Ltd (ASX: SYD), they have needed to raise capital to ensure stability.

But remember that ASX shares are among the best businesses in the country. Bapcor Ltd (ASX: BAP) isn’t just any car parts business, it’s the best auto parts company in Australia. JB Hi-Fi Limited (ASX: JBH) isn’t just a computer shop, it’s one of the best retailers in the country.

I think the share price strength of many leading ASX shares has been justified because of their resounding revenue and profit growth.

But there could be more strength to come. It could be worth going ‘all in’ with ASX shares for at least three reasons:

• Low interest rates – Australia’s official rate is now extremely low at just 0.25%. It may be about to go even lower. Lower interest rates are here to stay for a few years. This is one of the key reasons why it’s worth considering going ‘all in’ on ASX shares. There isn’t really another option. 
• Government support – The Australian government is doing a lot to financially support the economy. Jobkeeper and other measures has kept things ticking over. Jobkeeper is still being paid for businesses that are still struggling and the government recently revealed backdated tax cuts. This could provide another period of good support for the economy.
• US election – The upcoming US election has caused a lot of uncertainty. If the result is challenged then that could have caused a lot of volatility. If Joe Biden wins, as the polls are suggesting, then the Democrats may win enough power to pass the larger stimulus package which could be a real boost for the US and global economy, which I think would help ASX shares.

Time to go all in?

There’s always something to worry about with the share market. So you shouldn’t let one particular issue stop you from completely investing.

I think the finalisation of the US election will be the moment for me to buy into ASX shares, though I have continued buying throughout the last few months. Aside from COVID-19 impacts, there are a lot of positives for the Australian share market for the next 12 months as I mentioned above.

There are quite a few ASX shares that I’d be happy to buy in the coming weeks (or months) if they stay around this value including: MFF Capital Investments Ltd (ASX: MFF), Australian Ethical Investment Limited (ASX: AEF), City Chic Collective Ltd (ASX:CCX), BWX Ltd (ASX:BWX), EML Payments Ltd (ASX: EML) and Brickworks Limited (ASX: BKW).

There are plenty of other ASX shares that I’ve also got my eyes on. 

More reading

• Why I’d buy Australian Ethical (ASX:AEF) shares this week
• 2 great LICs I’d buy for strong total returns
• 5 things to watch on the ASX 200 next week
• Where I’d invest $10,000 in ASX shares for growth
• Is the Wesfarmers (ASX:WES) share price a strong buy today?

Tristan Harrison owns shares of Magellan Flagship Fund Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor, Brickworks, BWX Limited, and EML Payments. The Motley Fool Australia has recommended Australian Ethical Investment 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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If I were going to buy one ASX share this week it would be Australian Ethical Investment Limited (ASX: AEF).

Australian Ethical is a fund manager that is focused on investing ethically in businesses that try to positively impact the world, or at least not impact it negatively.

For example, it seeks to invest in businesses that build a clean energy future, research medical solutions, create more sustainable products or create new technologies. Whereas it actively avoids businesses that mine fossil fuels, exploit workers, promote gambling, manufacture weapons and so on.

What has been happening recently

The Australian Ethical share price has been volatile over the past year. It rose strongly to $5.80 a year ago when the bushfires were raging. It then drifted all the way back to $4.20.

The COVID-19 crash sent the Australian Ethical share price down to $2.07 and it has only recovered back to $4.72.

The share price has grown a lot from the market bottom, but it’s actually down 48% from 19 June 2020. It’s this lack of recovery that makes me believe that Australian Ethical is worth looking at, combined with its good growth prospects.

In the quarter ending 30 September 2020, Australian Ethical saw its funds under management (FUM) rise by 6.5% to $4.32 billion. This was helped by $150 million of net inflows, with $100 million of net inflows for its superannuation segment.

The Australian Ethical share price has risen by 4.6% since the quarterly update.

Why I think the Australian Ethical share price is a buy

Australian Ethical is a very promising business in my opinion.

There is a growing interest by investors for investing ‘ethically’ – you can see that from how much the FUM has grown over the past few years. I think that trend will continue.

Fund managers are attractive businesses because of how scalable they are. This is one of the main reasons why I think Australian Ethical can grow its profit nicely over the next few years.

The company is benefiting strongly from the fact that people are signing up to its superannuation product. This means it should see consistent inflows for superannuation over the coming years, as well as the benefits of compounding growth.

Australian Ethical plans to lower its fees for investors as it gets bigger. This may be harmful for short-term profit, but it will make the company much more attractive to prospective members and hopefully help long-term growth. Lower fees help investors generate better net returns. Ethical investing can lead to outperformance of the overall market, but it’s more likely to do better if the fees are lower rather than higher.

I think the company can deliver solid double digit profit growth over the coming years. In FY20 its underlying revenue and profit after tax both increased by 15%. Compounding profit can make a big impact over several years. 

Its balance sheet is another big positive. It has no debt with good operating cashflow and a growing cash balance.

Australian Ethical could also be an attractive option for its growing dividend. At the current Australian Ethical share price it offers a grossed-up dividend yield of 1.8%. In FY20 its total dividend for the year was increased by 20% to 6 cents per share. As Australian Ethical’s profit grows it will be able to fund higher and higher dividends, which will help total returns.

Foolish takeaway

I think that Australian Ethical is one of the most exciting ASX growth shares around with the ethical investing and superannuation trends on its side. It may look expensive compared to FY20’s earnings, but over the next five years I think it could generate solid returns.

More reading

• 3 top small cap ASX shares to buy right now
• The BIG problem with ASX ethical investing

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. 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 Australian share market is home to a large number of companies that share their profits with shareholders in the form of dividends.

This is particularly fortunate given how hard it is becoming to generate a sufficient income from other interest-bearing assets.

Two dividend shares that stand out to me as being great investment options are listed below. Here’s why I would buy them:

Aventus Group (ASX: AVN)

Aventus is a retail property company which owns and operates 20 large format retail parks across Australia. Positively, unlike Scentre Group (ASX: SCG) and its shopping centres, Aventus’ properties have continued to experience strong traffic during the pandemic. This has been driven largely by their high weighting towards everyday needs through tenants such as ALDI, Bunnings, Officeworks, and The Good Guys.

It was thanks to this that Aventus was able to collect the vast majority of its rent as normal in FY 2020 despite the pandemic. In fact, rent collections came in at 87% during the COVID-19 period and its occupancy rate was almost at capacity at 98%. This underpinned a 4.2% increase in funds from operations (FFO) to $100 million during the year. I’m expecting a similarly solid year in FY 2021. Based on this and the latest Aventus share price, I estimate that it offers a generous 5.5% yield.

Fortescue Metals Group Limited (ASX: FMG)

Another high yield ASX dividend share I would buy is Fortescue. I’m a big fan of the iron ore producer due to its world class, low cost operations and improving grades. This has allowed the mining giant to benefit greatly from the high prices that iron ore is commanding at present. Speaking of which, thanks to the improving outlook for steel production in China and tight market conditions, I expect iron ore prices to average ~US$100 a tonne in 2021.

Overall, this should put Fortescue in a position to deliver high levels of free cash flow again in FY 2021. And thanks to the strength of its balance sheet, it seems very likely that the majority of this will be returned to shareholders via buybacks and dividends. Based on the latest Fortescue share price, I estimate that it will provide investors with a 6% fully franked yield this year. However, if iron ore prices remain at elevated levels for longer than expected, this yield could be materially higher.

More reading

• 3 shares with intelligent fanatics I would invest in today
• Class action lawsuit a new challenge for Rio Tinto (ASX:RIO) share price
• 2 unstoppable ASX shares to buy with $2,000
• Why I would buy Telstra (ASX:TLS) and this ASX dividend share right now
• Why the Fortescue (ASX:FMG) share price is on the move today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended AVENTUS RE UNIT. 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 S&P/ASX 200 Index (ASX: XJO) may have finished the week on a sour note, but that didn’t stop a number of shares from pushing higher.

Some shares even managed to climb to 52-week highs or better. Here’s why these ASX shares have just reached these milestones:

GUD Holdings Limited (ASX: GUD)

The GUD share price climbed to a record high of $13.58 on Friday. Investors were buying the products company’s shares last week following the release of its first quarter update. GUD’s update revealed that it has experienced strong sales growth across both its Automotive and Water divisions so far in FY 2021. As a result, the company posted a 14% increase in first quarter group sales. This was despite the negative impact of government lockdown restrictions in Victoria and the Auckland region.

HUB24 Ltd (ASX: HUB)

The HUB24 share price surged to a new record high of $22.49 at the end of last week. Investors were buying the investment platform provider’s shares following the release of its first quarter update. That update revealed that HUB24’s strong form has continued in FY 2021, with record first quarter inflows of $1.36 billion. Together with positive market movements of $436 million, this increased the company’s Funds Under Administration to a massive $19 billion. This was an impressive 32% increase on the prior corresponding period.

OZ Minerals Limited (ASX: OZL)

The OZ Minerals share price hit a multi-year high of $15.08 on Friday. The catalyst for this has been a sustained rise in the copper price in 2020. It is currently up almost 17% over the last 12 months and recently hit a two-year high. This has been driven by Chinese economic data which appears to show that its economy is now entering a period of above-trend growth. This would be very good news for industrial metals demand.

More reading

• These were the best performing shares on the ASX 200 last week
• The Medibank (ASX:MPL) share price rockets on broker upgrade
• ASX 200 flat: Rio Tinto Q3 update, big four banks higher, GUD impresses
• GUD (ASX:GUD) share price on watch after strong Q1 growth
• 5 things to watch on the ASX 200 on Friday

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 Hub24 Ltd. The Motley Fool Australia has recommended Hub24 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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On Friday the S&P/ASX 200 Index (ASX: XJO) ended a positive week with a disappointing daily decline. The benchmark index dropped 0.55% to 6,176.8 points.

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

ASX 200 expected to rise.

The Australian share market looks set to start the week in a positive fashion on Monday. According to the latest SPI futures, the ASX 200 is expected to open the week 39 points or 0.6% higher. This follows a reasonably positive end to the week on Wall Street. On Friday night the Dow Jones rose 0.4%, the S&P 500 edged higher, and the Nasdaq dropped 0.35% lower. Wall Street was given a boost by stronger than expected U.S. retail sales data.

Gold price edges lower.

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch on Monday after a subdued finish to the week for the gold price. According to CNBC, the spot gold price dropped 0.1% to US$1,906.40 an ounce on Friday night. This meant the precious metal recorded a small weekly decline.

Telstra iPhone 12 plans.

The Telstra Corporation Ltd (ASX: TLS) share price will be in focus today following the release of its iPhone 12 plans on Friday night. The telco giant was the most aggressive with its plans, discounting prices notably more than expected. Goldman Sachs commented: “The key promotion was from Telstra, who launched a very aggressive $50/m discount on its XL plan ($65/m, down from $115) as it looks to be making an aggressive play for ‘premium‘ subscribers, as it looks to leverage its superior 5G network (i.e. 40% coverage currently).”

Oil prices drop lower.

Energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could trade lower today after oil prices softened on Friday night. According to Bloomberg, the WTI crude oil price fell 0.2% to US$40.88 a barrel and the Brent crude oil price dropped 0.5% to US$42.93 a barrel. Rising COVID-19 cases weighed on prices on Friday, but couldn’t stop oil from recording its second consecutive week of gains.

Tech shares on watch.

Tech shares such as Appen Ltd (ASX: APX) and Zip Co Limited (ASX: Z1P) will be on watch today after a poor end to the week by their U.S. counterparts on Wall Street’s tech heavy Nasdaq index. It fell 0.35% on Friday night, compared to a 0.4% gain by the Dow Jones. Last week the S&P/ASX All Technology Index (ASX: XTX) recorded a solid 3.7% gain.

More reading

• 3 core holdings for a $100,000 ASX portfolio
• Will you regret calling the Afterpay Ltd (ASX: APT) share price too expensive? 
• Top brokers name 3 ASX shares to sell next week
• Top brokers name 3 ASX shares to buy next week
• 5 things to watch on the ASX 200 next 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 owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Appen 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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If you’re looking for a quick way to diversify your portfolio, then exchange traded funds (ETFs) could be the answer.

These financial instruments give investors exposure to a wide range of themes, countries, indices, and sectors through just a single investment.

But which ones should you buy? Two top ETFs that I like are listed below:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at buying is the BetaShares Asia Technology Tigers ETF. This ETF allows investors to gain exposure to a portfolio of exciting tech shares that are revolutionising the lives of billions of people in Asia. I believe the majority of these companies are well-placed for growth over the next decade and beyond.

One of the shares included in the fund is search engine giant Baidu. As well as dominating search in China, Baidu is making great leaps with artificial intelligence and is aiming to be an autonomous vehicle powerhouse. In respect to the former, in 2019, it ranked first in the number of AI-related patent applications in China for the second consecutive year.

Also included in the fund is Tencent Holdings. It is the video game and social media giant responsible for the hugely popular WeChat app. This app is is used by over 1.2 billion consumers for everything from messaging, e-commerce, digital payments, and entertainment.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ETF which I think could provide strong returns for investors over the next decade is the BetaShares NASDAQ 100 ETF. This ETF provides investors with a slice of the 100 largest non-financial shares on the NASDAQ index. As with the Asia Technology Tigers ETF, I believe these companies are well-placed to grow at a quicker than average rate over the 2020s.

Included in the fund are tech giant such as Amazon, Apple, Facebook, Microsoft, and Netflix. But there are also a lot of lesser-known companies which have the potential to grow materially over the long term.

One of my favourites in the fund is Nvidia. It has carved out a leadership position in artificial intelligence computing thanks to its graphics processing units. Another company in the fund is electric vehicle giant Tesla. It was recently tipped to become a US$2 trillion company in the future thanks to its battery business.

More reading

• Invest like Warren Buffett and buy and hold these fantastic ASX shares
• 3 outstanding ASX shares to buy with $10,000 right now
• 3 ETFs every ASX investor should consider today
• Which ETFs attracted the most money this year?
• How to position yourself for the next big surge in technology shares

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 owns shares of and has recommended BetaShares Asia Technology Tigers ETF. 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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If you’re in the process of constructing a $100,000 share portfolio, you may be on the lookout for investment ideas.

To help you on your way, I have picked out a few shares I think could be excellent core holdings.

Here’s why I think investing some of the funds in these shares would be a very smart move:

Appen Ltd (ASX: APX)

The first option to consider as a core holding is Appen. It is the global leader in the development of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). It has achieved its leadership position thanks to its global crowd of more than 1 million skilled contractors. This, together with an expertise in more than 180 languages and the industry’s most advanced AI-assisted data annotation platform, means it is servicing the needs of some of the biggest tech companies in the world. This includes the likes of Facebook and Apple.

The good news is that spending on machine learning and AI is expected to increase materially in the future. I believe this puts Appen in a strong position to continue growing its earnings at an above-average rate for many years to come.

Coles Group Ltd (ASX: COL)

Another option for investors to consider as a core holding for their portfolio is Coles. I think it could be a great option due to the solid growth potential it has thanks to its defensive earnings, expansion opportunities, and its refreshed strategy. The latter is aiming to deliver $1 billion in cumulative savings by FY 2023. These savings are expected to come from the use of technology to automate manual tasks. This includes state of the art automated distribution centres.

Another positive is the company’s dividend policy. Coles intends to payout upwards of 90% of its earnings to shareholders each year. Given its positive long term growth outlook, I expect this to lead to increasing dividend payments for a long time to come.

CSL Limited (ASX: CSL)

I think this biotherapeutics company would be a great core holding. I believe CSL is well-positioned to continue growing its earnings at a solid rate long into the future once the pandemic passes. This due to its world class portfolio of therapies and vaccines and its potentially lucrative research and development pipeline. In respect to the latter, CSL invested ~US$900 million into these activities in FY 2020 and will invest approximately US$1 billion this year.

I believe these investments will ensure that CSL stays at the top of its field for a long time to come. All in all, this could make it one of the best buy and hold options on the market today.

More reading

• Is the CSL (ASX:CSL) share price a buy?
• 5 things to watch on the ASX 200 next week
• 10 must-buy ASX shares to snap up before it’s too late
• How to make $50,000 of passive income with ASX dividends
• These ASX ETFs could be perfect for dividend-seekers

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 CSL Ltd. The Motley Fool Australia owns shares of Appen Ltd and COLESGROUP DEF SET. 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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