Tag: Motley Fool

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.

Amazon (NASDAQ: AMZN) has invested in a battery recycling start-up founded by former Tesla chief technology officer J.B. Straubel, part of the e-commerce giant’s pledge to commit $2 billion to green initiatives.

Amazon’s Climate Pledge Fund announced on Thursday that it has invested an undisclosed amount in Redwood Materials, which was founded by Straubel in 2017. Redwood and Amazon will also work together to recycle electric vehicle (EV) batteries and other lithium-ion batteries from electronics.

“To fight climate change, we need to solve the impact products have on the environment,” Straubel said in a statement. “We’re honored to be part of the Amazon’s Climate Pledge Fund and to build the closed-loop supply chain that will recycle batteries, electronics and other end of life products for Amazon.”

In addition to Redwood, Amazon also announced stakes in Rivian, an electric-truck start-up backed by Ford Motor that has a deal to supply Amazon with up to 100,000 vehicles.

Amazon said it has also made investments in:

• CarbonCure Technologies, which aims to reduce the carbon emissions from the manufacture of cement.
• Pachama, a technology exchange that verifies the impact of carbon capture in the world’s forests to allow organisations and individuals to offset emissions by supporting reforestation and forest conservation projects.
• Turntide Technologies, a maker of energy-efficient motors.

In a statement, Amazon CEO Jeff Bezos said, “I am excited to announce that we are investing in a group of companies that are channeling their entrepreneurial energy into helping Amazon and other companies reach net zero by 2040 and keep the planet safer for future generations.”

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

More reading

• MGM Wireless (ASX:MWR) share price bounces on Amazon deal
• 3 ASX shares to buy before this window of opportunity closes
• Better buy: Amazon vs Netflix
• Amazon’s Luxury Stores just dealt another blow to department stores
• Better buy: Slack Technologies vs Microsoft

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Lou Whiteman owns shares of Ford. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and Tesla and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the week in the red. At the time of writing the benchmark index is down 0.2% to 5,870.7 points.

Four shares that have not let that hold them back today are listed below. Here’s why they are pushing higher:

The Mineral Resources Limited (ASX: MIN) share price is up 1% to $25.20. Investors have been buying the mining and mining services company’s shares after a sharp pullback on Thursday. A decline in the iron ore price and a broker downgrade were weighing on the company’s shares. So much so, the Mineral Resources share price fell a sizeable 9% yesterday. Some investors may believe its shares were oversold.

The Redbubble Ltd (ASX: RBL) share price is up over 4% to $4.41. This appears to have been driven by a broker note out of Goldman Sachs. Its analysts have put a buy rating and $5.30 price target on the ecommerce company’s shares. It believes Redbubble is well-positioned for growth thanks to structural tailwinds. The broker even suggested Redbubble’s shares could be worth as much as $10.75 if its growth accelerates.

The Saracen Mineral Holdings Limited (ASX: SAR) share price is up over 2.5% to $5.34. A number of gold miners are pushing higher today despite a pullback in the gold price overnight. At the time of writing, the S&P/ASX All Ordinaries Gold index is up 0.6%.

The Temple & Webster Group Ltd (ASX: TPW) share price is up almost 3% to $10.31. This also appears to have been driven by a broker note out of Goldman Sachs. As with Redbubble, the broker believes this online furniture and homewares retailer is well-positioned for growth over the coming years. As a result, it has put a buy rating and $11.50 price target on the company’s shares.

More reading

• Is the Redbubble (ASX:RBL) share price on a path to $10.75?
• Are ASX gold shares like Newcrest (ASX:NCM) still good value?
• Why Galaxy (ASX:GXY) and these ASX shares just hit new highs
• ASX 200 drops 1.2%, Mineral Resources (ASX:MIN) fell 9%
• 3 ASX shares poised for huge growth in FY21

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 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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The Clover Corporation Limited (ASX: CLV) share price has plummeted 10.33% in early morning trade following the release of its FY20 results. The Clover share price reached as low as $2.13, before pushing back to $2.17 at the time of writing. 

Let’s take a look at Clover’s results for the financial year.

How did Clover perform in FY2020?

Clover reported a decent FY20 result underpinned by new products delivering growth in new segments and countries.

For the full year ending 31 July, Clover announced a revenue increase of $88.3 million, up 15% over FY 2019.  This was driven by improved demand across all key regions, particularly in Europe.

Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $18.9 million, an increase of 35% from $14 million in the prior period.

Net profit after tax stood at $12.5 million, an increase of 23.6% compared to $10.1 million the year before.

Earnings per share also increased to 7.51 cents, compared to 6.12 cents.

Clover revealed an operating expense of $11.4 million from investment in research and development programs to deliver future growth. This was a jump from the $10.3 million spent in FY2019.

Inventory leapt to $31.9 million, up from $4.2 million.

Clover advised its balance sheet is strong with $9.2 million cash on hand and a net debt of just $5.4 million.

The infant formula company declared a final dividend of 2.5 cents per share to be paid to shareholders on 18 November.

COVID-19 impact

Clover said that its FY20 result had been positively impacted by COVID-19 with increased demand through Q3 and Q4. This was due to its customers supplying additional infant formula to retail channels depleted by pantry stocking.

The company did advise, however, that new customer development had been curtailed due to the imposed travel restrictions. This affected its ability to perform audits, and attend trade shows.

Demand in the United States from new business development had been constrained as the company focused on other activities. Clover resourced its overseas team to service new and existing customers.

FY 2021 outlook

Due to the uncertainty of COVID-19, the company did not provide a guidance for 1HFY21. However, Clover mentioned that the pantry stocking from consumers could support strong sales in the first half of the year.

In addition, the company will seek to target new customers in Europe to meet the new IF standards and establish online or third-party audits.

Clover will also look to restart new product development in the United States, and increase supply chain vertical integration.

About the Clover share price

The Clover share price has made a strong comeback of 63% since falling as low as $1.33 in March. For the calendar year to date, the Clover share price is down 17.49% and has also fallen 34.44% from its 52-week high.

More reading

• Why 5G Networks, AMP, Clover, & Reliance shares are dropping lower today
• 3 ASX shares I’d buy to quickly add diversification
• Why you should add these small cap ASX shares to your watchlists

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Clover Limited. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) has given back its early gains and is edging lower. At the time of writing the benchmark index is down 0.1% to 5,876.7 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:

The 5G Networks Ltd (ASX: 5GN) share price is down 5% to $1.69 after returning from its trading halt. This morning the company confirmed that has entered into a Bid Implementation Deed with Webcentral Group Ltd (ASX: WCG) to acquire it via a recommended off market takeover bid. 5G Networks has offered 16 cents per share for the domains and hosting provider.

The AMP Limited (ASX: AMP) share price has sunk 7.5% lower to $1.41. This decline is almost entirely attributable to the financial services company’s shares trading ex-dividend this morning for its 10 cents per share fully franked interim dividend. This will be paid to eligible shareholders in just over two weeks on 1 October.

The Clover Corporation Limited (ASX: CLV) share price has crashed 11.5% to $2.17 following the release of its full year results. For the 12 months ended 31 July 2020, the specialist ingredients producer delivered sales revenue of $88.3 million and net profit after tax of $12.5 million. This was a 15.1% and 23.6% increase, respectively, over the prior corresponding period. Management’s commentary for FY 2021 appears to have concerned investors. It warned of high levels of uncertainty because of the pandemic.

The Reliance Worldwide Corporation Ltd (ASX: RWC) share price is down 3% to $3.86. The catalyst for this decline appears to have been a broker note out of UBS this morning. According to the note, the broker has downgraded the plumbing parts company’s shares to a neutral rating with a $3.85 price target. UBS made the move on valuation grounds after a strong gain in recent weeks.

More reading

• Clover (ASX:CLV) share price falls 10% on FY20 results
• 2 terrible ASX shares I will never buy
• 3 ASX shares I’d buy to quickly add diversification
• Will the S&P downgrade derail the recovery in the AMP share price?
• Why the 5G Networks share price is sinking lower today

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 Clover Limited and Reliance Worldwide Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends 5G NETWORK FPO. The Motley Fool Australia has recommended Reliance Worldwide 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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The Macquarie Group Ltd (ASX: MQG) share price sunk more than 5.6% this week after it downgraded its outlook.

But analysts are still bullish on the stock because of a looming payday.

The investment bank owns a substantial part of an Australian unicorn. And that technology company is headed towards an initial public offering in the coming months.

Nuix has been doing massive work

Nuix is a provider of analytics software for cybersecurity, compliance and fraud risks. Its star product is a piece of unstructured data processing software called the Nuix Engine.

The company was founded in Sydney while the city was busy hosting the Olympics in the year 2000. After quietly and steadily picking up government and private clients, it started to come into the public consciousness in the 2010s.

For example, Nuix’s software played a major part in the secret analysis of The Panama Papers. 

The International Consortium of Investigative Journalists (ICIJ) reportedly processed 11.5 million documents, which in 2016 resulted in the exposure of fraud and tax avoidance on a global scale.

How much of Nuix does Macquarie own?

The software firm really started to catch the eye of big-name investors towards the end of the 2000s.

The company has reportedly been self-funding since 2008. Macquarie made its investment in 2011.

Nine estimates the investment bank put in about $100 million to $150 million.

After a top-up to support an acquisition in 2018, Macquarie’s ownership stands at around 70%.

How much does Macquarie stand to earn from Nuix?

Nuix is working on an IPO to be executed in the coming months.

While no prospectus is out yet, the software provider is expected to be valued at around $1.5 billion when it lists on the ASX.

That would make Macquarie’s stake more than $1 billion.

Nuix chief executive Rod Vawdrey has been reporting to potential investors revenue of $176 million for the 2020 financial year.

Based on a valuation of 10 times future revenue, Nuix would be conservatively valued at $1.76 billion.

Market darling Afterpay Ltd (ASX: APT)’s market capitalisation is currently at about 23 times its forecast 2021 revenue.

So even at conservative valuations, Macquarie is set to see its share in Nuix multiply ten-fold when Nuix goes public.

Not a bad investment by the Millionaires’ Factory.

More reading

• Why the lagging Worley (ASX:WOR) share price could be at COVID turning point
• Meet the ASX sector that is cum-consensus upgrade for FY21
• Brokers upgraded JB Hi-Fi (ASX:JBH) share price and this other ASX stock to “buy” today
• Brokers upgrade Macquarie (ASX:MQG) share price targets despite profit warning
• Borrowers on loan holidays are ignoring ASX bank communications

Motley Fool contributor Tony Yoo owns shares of AFTERPAY T FPO and Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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 marijuana business is slowly, but inexorably, moving from the world’s black markets onto global share markets.

During the initial round of exuberance, as Canada and some of the biggest states in the US legalised not just marijuana’s medicinal use but also its recreational use, most every share involved in the cannabis field saw its share price soar.

From boom to bust to renewal

Inevitably, reality came into play and when revenues didn’t match sky-high valuations the pot stock bubble burst.

In 2019 global cannabis shares – with the biggest listed on the Canadian and US exchanges – lost roughly half their value. And earlier this year, driven by the COVID-19 share market rout and a dearth of funding, cannabis shares tumbled even further.

But the past few weeks has seen numerous ASX listed pot stocks’ share prices soaring.

Three ASX cannabis shares rocketing in September

Medicinal cannabis was given the green light in Australia in 2016. Recreational use remains strictly illegal outside of the Australian Capital Territory. But there are a number of Aussie companies involved in both medical and recreational cannabis production as well as hemp, marijuana’s non-narcotic cousin.

On the hemp front, the Australian Primary Hemp Ltd (ASX: APH) share price has enjoyed a stellar few weeks, up 32% so far in September. The share price is now up 9% year-to-date and a whopping 270% since the low on 7 April. Most of the September gains came this week after the company announced it was producing hemp-based protective face masks providing 99.9% microbial reduction. This came alongside its launch of a hemp-infused hand sanitiser.

On the medicinal marijuana front, the Auscann Group Holdings Ltd (ASX: AC8) share price is up 14% so far in September. Year-to-date it’s nowhere near to recovering from the February and March selloff, with the share price still down 47% in 2020. But the recent gains are encouraging, coming after the company announced it had completed its first clinical trial of a cannabis-based capsule intended to treat nerve pain.

And on the recreational marijuana front, the Althea Group Holdings Ltd (ASX: AGH) share price is up 38% so far in September, despite falling sharply yesterday. The share price is now up 35% year-to-date and has gained an eye-popping 228% from the 23 March low.

By comparison, the All Ordinaries Index (ASX: XAO) is up 33% since 23 March.

Althea’s share price owes much of its September gains to its Canadian Standard Processing Licence announcement earlier this week. After getting the nod from Health Canada, Althea’s wholly-owned subsidiary, Peak Processing Solutions can now begin commercial cannabis operations at the company’s facility in Tecumseh, Ontario.

While the prices of these cannabis companies, and indeed throughout the industry, remain volatile, the trend for well-run ASX cannabis shares is once again upwards.

More reading

• Australian Primary Hemp (ASX:APH) share price up 15% on PPE launch
• RED 5 (ASX:RED) share price up 4% on feasibility study
• The Mayne Pharma (ASX:MYX) share price leaps almost 8% higher
• Althea (ASX:AGH) share price surges 11% on Canadian cannabis licence
• Auscann (ASX:AC8) share price up 6% on phase I study results

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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A few days ago, I penned a piece on why a passive investing strategy, using only ASX index exchange-traded funds (ETFs),  perfectly fits many investors. I also outlined how this strategy works and why it’s a good fit for anyone unable or unwilling to pick their own individual shares. Today, I thought I’d back this up with a discussion about the best ETFs for such a strategy.

So here are 3 ASX ETFs that I think would work nicely. I’ve considered 2 factors for these ETFs – the fees they charge and the balance and diversification they can bring to a portfolio. Let’s get started!

Vanguard Australian Shares Index ETF (ASX: VAS)

Our first ETF is this comprehensive fund from Vanguard. VAS covers the 300 largest companies in Australia, which is another 100 on top of your more conventional S&P/ASX 200 Index (ASX: XJO) fund. I think the ASX largest holdings such as Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and BHP Group Ltd (ASX: BHP) are a little tired as companies and are unlikely (at least in my opinion) to deliver significant returns over the next decade or so. That’s why I like the fact that VAS captures a large portion of the small-cap end 0f the market.

VAS is an ETF that represents a ‘slice of Australia’, as Warren Buffett might say. The ASX has been a great performer over the past 120 years or so, and thus, I think VAS is a great candidate for a passive investing strategy. It charges a competitive fee of 0.1% per annum (or $1 for every $1,000 invested every year).

Vanguard US Total Market Shares Index ETF (ASX: VTS)

This ETF is also from Vanguard, but instead of tracking Aussie shares like CBA and Woolworths Group Ltd (ASX: WOW), it instead tracks all of the shares currently listed in the share markets of the United States. I prefer a comprehensive ETF like this one over the more popular S&P 500 funds that are out there, for similar reasons to VAS. VTS holds 3,525 different shares within it, which includes both the smaller end of the market that the S&P 500 doesn’t track, as well as the larger companies that don’t fit the S&P 500’s listing criteria (such as the famous example of electric car maker Tesla Inc (NASDAQ: TSLA)).

The United States is one of the best markets to passively invest in, in my view. You just can’t go wrong with companies like Apple Inc (NASDAQ: AAPL), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) and Amazon.com, Inc (NASDAQ: AMZN).

I also like this ETF because of its a stupidly low management fee of just 0.03% per annum (or $3 for every $10,000 invested every year).

Vanguard All-World ex-US Shares Index ETF (ASX: VEU)

Our final ETF is an interesting one. VEU holds a massive basket of shares (more than 3,400) that are listed right around the world, with the exception of the US. That’s companies from China, India, Europe, the United Kingdom and Canada, among many others (even Australia). In this way, I think this ETF is a great way to get some exposure to the companies outside the popular US markets. Some of the top holdings in this ETF include Chinese e-commerce giants Alibaba Group and Tencent Holdings, Swiss food manufacturer Nestle, Japanese auto giant Toyota, and British pharmaceutical giant AstraZeneca.

VEU charges a management fee of 0.08% per annum (or $8 for every $10,000 invested every year).

Foolish takeaway

Here we have the 3 best ASX ETFs for a passive investing strategy available, in my view. You could happily and successfully use any one of these ETFs, or else a combination, for long-term returns and diversified exposure.

More reading

• How to make $1 million from ASX shares
• Why the Afterpay (ASX:APT) share price could be a buy
• Are ASX gold shares like Newcrest (ASX:NCM) still good value?
• 5 things to watch on the ASX 200 on Friday
• ASX 200 drops 1.2%, Mineral Resources (ASX:MIN) fell 9%

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, and Tesla and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, and 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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The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is edging lower on Friday after the release of its latest traffic figures.

In morning trade the airport operator’s shares are down 0.5% to $5.49.

What did Sydney Airport announce?

It was another difficult month for Sydney Airport in August.

During the month, Australia’s largest airport welcomed just 129,000 passengers through its terminals. This was a reduction of 96.5% on the prior corresponding period.

It was also down notably month on month from 317,000 passengers during July.

A total of 39,000 international passengers passed through Sydney Airport in August, down 97.2% on the prior corresponding period. This was broadly in line with July’s figures.

Also falling sharply was its domestic passenger numbers, which were down 96.1% on the prior corresponding period to 91,000. This compares to 276,000 passengers in July.

Unfortunately, with border restrictions still largely in place around the country, management isn’t expecting a swift recovery in traffic.

It commented: “We expect the downturn in passenger traffic to persist until government travel restrictions are eased.”

Should you invest?

While times are hard now for Sydney Airport, a return to form will inevitably come in time.

So with the company’s liquidity looking more than sufficient to ride out the storm following its capital raising, I think it could be a good option for patient investors.

I’m not the only one that sees Sydney Airport as a buy. A note out of Morgans last month reveals that its analysts have an add rating and $6.56 price target.

This price target implies potential upside of 18% for its shares over the next 12 months excluding dividends. Though, I wouldn’t hold your breath on dividends being paid in the near term.

I suspect they will be suspended until trading conditions return to normal, which could be FY 2022.

More reading

• 5 things to watch on the ASX 200 on Friday
• The pitfalls of investing in infrastructure in 2020
• Is the Sydney Airport (ASX:SYD) share price a cheap buy?
• 5 things to watch on the ASX 200 next week
• Half of ASX 200 stocks at risk as China-Australia relations hit new low

Motley Fool contributor James Mickleboro 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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Given the right time frame and return, it’s possible to make $1 million starting with a small amount of money. 

It seems crazy that it can be so passive, however it can be done with the right ingredients.

Average market returns

The S&P/ASX 200 Index (ASX: XJO) has returned an average of 26% per year over the last 40 years. Between 1980 and 2020 it has grown by about 1,040%. If we divide this by 40 years, we get 26% per year.

The crazy thing is that these returns include major crash events such as “Black Monday” in 1987, the “Dot Com Bubble” in 2000, the “Global Financial Crisis” (GFC) in 2008 and more recently the COVID-19 crash in 2020.

When you think about it, an average return of 26% is actually pretty great, all things considered!

However, in recent times, we can’t rely on 20%+ returns. The average annualised return in recent decades is closer to 8% per year. But the compounding effect can be incredible.

What would it take to turn $10,000 into $1 million?

Turning 10 thousand into a million requires a number of factors, including time and percentage return. 

Firstly, starting with $10,000, let’s assume that over the long-term we can see an annual average return of 8% in the major ASX index.  

Secondly, we need to include a regular deposit or investment into the market. In this case, I have used $500 per month as this is reasonable for most people. It’s still a commitment of course, but we are talking about making a million dollars.

Lastly, we need time in the market to compound our returns. 

Let’s review:

• Starting amount – $10,000
• Average return – 8% per year 
• Regular deposit – $500 per month

Now we have our ingredients, how long would it take?

Surprisingly, it takes only 33 years to make $1 million!

In fact, after 33 years, you have more than $1 million, you would have approx $1,039,965.

It’s crazy to think that all it takes to achieve this is a $10,000 starting amount, some time and some commitment. All we need now is a product.

What to buy

In keeping with the theme of average market returns, the easiest and most accurate way to track the market is through exchange-traded funds (ETF)

ETFs that track a major ASX index are the ones I’m looking at here, as they are designed to match the long-term growth we have estimated.

There are many ETFs available on the ASX to choose from.

BetaShares Australian 200 ETF (ASX: A200)

The Australian 200 ETF by BetaShares is designed to provide exposure to the top 200 companies listed on the ASX by market capitalisation. 

At just 0.07% per year in fees, it’s one of the cheapest ETFs I’ve ever seen.

Aside from growth in value over time, this ETF offers approx 4.7% in annual dividends as well.

The top 3 sectors held are:

• Financials – 27.3%
• Materials – 20.6%
• Healthcare – 11.9%

The top 3 holdings in this ETF include CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA) and  BHP Group Ltd (ASX: BHP).

Vanguard Australian Shares Index ETF (ASX: VAS)

The Australian Shares Index ETF by Vanguard is designed to track the returns of the S&P/ASX 300 Index (ASX: XKO). 

This particular index is essentially the ASX 200 plus another 100 companies. I like the idea of a little more diversity.

At 0.10% per year in management fees, again, this is a very cheap ETF. While it’s not critical to shop around for cheap ETF’s however, it should be noted that lower fees mean your returns will be higher.

Even though this fund has more than 100 more companies than the Australian 200 ETF by BetaShares above, the top sectors and holding are identical. 

Foolish Takeaway

33 years might seem like a long time to make $1 million, however it’s a very passive approach. This article is deigned to inspire and show you that anything is possible with the right planning. For those wanting to speed up the process, a higher starting amount, higher monthly deposits and a slight increase in return can drastically reduce the time frame.

One of the most important things is to just start. Even if you have less to invest and less available each month to contribute, every bit counts towards a brighter future. Your future self will thank you!

More reading

• The 3 best ETFs for passive investing
• Why the Afterpay (ASX:APT) share price could be a buy
• Are ASX gold shares like Newcrest (ASX:NCM) still good value?
• 5 things to watch on the ASX 200 on Friday
• ASX 200 drops 1.2%, Mineral Resources (ASX:MIN) fell 9%

glennleese 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 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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In January, Virgin Australia Holdings Limited (ASX: VAH) chief Paul Scurrah could not have predicted the year he was about to have.

His planes were in the air and he was busy working to get the company back in the black against a dominant Qantas.

Even as the COVID-19 pandemic and international border closures came, he thought his airline was okay.

“Up to that point we thought we were… somewhat insulated because of the domestic nature of our business,” Scurrah said at the Yahoo Finance All Markets Summit.

“We thought flying throughout Australia would still hold up fairly well.”

But it didn’t take long before he realised corporate customers were immediately ceasing business travel.

Then came the nail in the coffin. 

Prime Minister Scott Morrison recommended domestic travel should only occur if it were absolutely essential.

“We virtually grounded our airline,” Scurrah said.

“At that point I knew it was going to be a struggle to keep us out of administration.”

Virgin Australia entered voluntary administration on 21 April, at the height of the first wave of coronavirus.

Pre-COVID worries seem trivial now

Scurrah told the same event in 2019 that the airline’s biggest headwinds were the cost of fuel and the low Australian dollar.

Those anxieties have been blown out of the water with this year’s misfortunes.

“I wish we had problems as simple as the ones I described last year,” he said.

Virgin Australia temporarily stood down 8,000 staff in March as most of its fleet was grounded due to travel restrictions.

There was talk of a government bailout, which Qantas Airways Limited (ASX: QAN) protested without it also receiving a proportionally larger amount. Some analysts even spoke of nationalisation of the airline.

In June, the administrators decided to sell the airline to private equity fund Bain Capital.

Regrets, I’ve had a few

If Scurrah could have his time over, he wished staff terminations could have been performed faster.

After the initial 8,000 temporary stand-downs in March, Virgin Australia in August decided to permanently cut 3,000 employees.

“Uncertainty is a major cause of stress and anxiety… We could have got to that quicker,” he said.

“I think we felt we were trying to preserve some hope for them. But I think we took too long to get to the point of execution.”

TigerAir could be revived

One of the big decisions in the new Bain Capital era was to euthanise budget brand TigerAir. 

But Scurrah did not rule out a return in the future.

“We have kept hold of the air operator’s certificate of Tiger to give us the option… to re-enter with an ultra-low cost product,” he said.

“Whether that’s done with the TigerAir brand or not, we’ll decide at the time.”

In the short-term though, Virgin Australia will fly as a “single brand” flying domestic and short international routes with Boeing 737s only.

Competitive airfares will return

Flying internationally now, if you can do it at all, is prohibitively expensive.

“There are a number of restrictions operating on airlines today that really cap the amount of people you take on planes,” said Scurrah.

“So it changes the economics completely.”

And longer the coronavirus restrictions remain, more airlines around the globe will go broke or cut routes, permanently reducing the level of competition.

But Scurrah has confidence about the post COVID-19 world.

“When the skies do open up again, there’s going to be a need to stimulate demand,” he said.

“You will see competitive airfares when it’s safe to travel.”

More reading

• Is the Qantas (ASX:QAN) share price a cheap buy?
• Is now the time to be buying ASX travel shares? 
• Qantas (ASX:QAN) considers leaving Sydney
• 2 terrible ASX shares I will never buy
• Why the Qantas (ASX:QAN) share price is sinking lower today

Motley Fool contributor Tony Yoo 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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