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Are you interested in adding some ASX growth shares to your portfolio? If you are, you may want to look at the share listed below that Goldman Sachs has on its conviction list.

Here’s what you need to know about this buy-rated growth share:

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster could be an ASX growth share to buy. It is Australia’s leading online furniture and homewares retailer through the eponymous Temple & Webster website. It is also developing an online Bunnings competitor known as The Build.

While it is unlikely that Bunnings will be quaking in its boots over The Build, the bricks and mortar furniture and homewares market may be nervous about the prospect of losing market share to Temple & Webster in the future.

Goldman Sachs is very positive on the company’s future and believes post-results weakness has created a buying opportunity for investors. It commented:

We think the negative share price reaction (-27%) is overdone, in response to a weaker than expected trading update for the first five weeks of the year which we view as largely reflecting the lapping of omicron rather than a deterioration in underlying trends. We view the balance towards profitability as a sensible shift given near term uncertainty; that said we expect the business to pivot back to active customer growth in FY24 which should drive market share gains.

Post today’s sell off, we believe the market is either pricing in i) a significant downturn with TPW trading at a bottom of the cycle EV/GP multiple (2.1x FY24E vs. W trading on 2.5x); or ii) a very material impairment to its long term growth opportunity, which we saw no evidence of in the update today.

Goldman has conviction buy rating and $6.50 price target on its shares. Based on the current Temple & Webster share price of $3.53, this implies potential upside of 84% over the next 12 months.

The post This ASX growth share has a massive 84% upside: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• 2 ASX All Ords shares I think can make big returns by 2025
• Will ASX 200 shares crash in 2023?
• Are Temple & Webster shares a bargain buy following Tuesday’s 27% fall?
• Buy these beaten down ASX shares now: experts
• Why Ansell, Breville, Star, and Temple & Webster shares are falling

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Coles Group Ltd (ASX: COL)

According to a note out of Citi, its analysts have retained their buy rating on this supermarket giant’s shares with an improved price target of $20.20. Citi was impressed with Coles’ first-half result, noting that it came in comfortably ahead of its expectations. Looking ahead, the broker believes shopping trends are favourable for Coles. It also feels the market is being too negative on the Ocado partnership. The Coles share price ended the week at $18.08.

IDP Education Ltd (ASX: IEL)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this language testing and student placement company’s shares with a trimmed price target of $35.70. Although IDP’s half-year earnings were a touch below expectations, Goldman was impressed with its revenue growth and operating leverage. The broker expects this trend to continue and is forecasting double-digit revenue growth and further margin expansion through to at least FY 2025. The IDP share price was fetching $29.11 at Friday’s close.

Qantas Airways Limited (ASX: QAN)

Analysts at Morgans have retained their add rating on this airline operator’s shares with a slightly reduced price target of $8.35. This follows the release of a strong half-year result which revealed earnings at the top end of its guidance range. Morgans was perplexed by the market’s poor reaction to the result, particularly given the prospect of strong travel demand continuing well into FY 2024. In light of this, it believes a buying opportunity has arrived for investors. The Qantas share price ended the week at $6.16.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Buy these ASX 200 shares following their results: Goldman Sachs
• 7 ASX 200 shares with ex-dividend dates next week
• Is Wesfarmers looking to sell off its remaining Coles shares?
• Own Woolworths shares? Supermarket giant moves to team up with Coles on recycling blitz
• Should I buy the dip on Qantas shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Idp Education. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Idp Education. 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 S&P/ASX 200 Index (ASX: XJO) healthcare share could be a very effective choice for passive income. I’m talking about Sonic Healthcare Ltd (ASX: SHL) shares.

The laboratory services, pathology, and radiology provider has been very effective at growing its scale, earnings, and dividend over the last two decades.

At one time, it did not have the international reach that it does now. The ASX healthcare share is now a global business with a market capitalisation that’s approaching $16 billion. It operates in a number of countries including Australia, New Zealand, Germany, the US, and the UK.

And its business could continue to grow for a very long time thanks to its exposure to tailwinds like ageing demographics and new technology for pathology.

Higher earnings have helped the Sonic Healthcare share price over the last five years — it’s up by around 40%. Sonic Healthcare got a pandemic-era boost as it carried out millions of COVID tests. But now the focus is back on its core business.

How to make $200 of weekly income from Sonic Healthcare shares

There are no ASX 200 stocks that pay weekly. I think it’s better to think of a company’s dividend as an annual income that can be divided by 52.

To make $200 of weekly income, we need to generate $10,400 of annual income.

In FY23, according to Commsec, Sonic Healthcare is forecast to pay an annual dividend per share of $1.01, not including the effect of franking credits. That’s a cash dividend yield of 3%.

If we owned 10,298 Sonic Healthcare shares, then we’d receive $10,400 of annual passive income in cash dividends. The franking credits would be a bonus on top of that.

The current Commsec forecasts for Sonic Healthcare suggest that the dividend could be increased to $1.06 per share in FY24. At the current Sonic Healthcare share price, that suggests the ASX stock could pay an FY24 cash dividend yield of 3.2%.

There could be another dividend increase in FY25. Commsec numbers currently predict a dividend per share of $1.115. That’s a possible forward cash dividend yield of 3.35%.

If we think about FY25’s payout, investors would only need to own 9,327 Sonic Healthcare shares to get $10,400 of annual dividends.

How is the ASX 200 stock performing?

The latest update that investors have seen was the company’s FY23 first-half update.

While the drop-off in COVID testing was the cause of total revenue falling 14% and net profit after tax (NPAT) sinking 54%, the company has made a lot of progress since the first half of FY20 – a time when COVID-19 was not impacting Sonic’s key markets.

Compared to HY20, base business revenue was up 11% (with organic revenue growth of 8%) and total revenue was up 22% thanks to residual COVID testing in FY23. Earnings before interest, tax, depreciation and amortisation (EBITDA) was up 33% and net profit was up 50%.

The HY23 result saw Sonic Healthcare increase its interim dividend by 5% as it continued its progressive dividend policy for shareholders.

Sonic Healthcare continues to win contracts. It’s also considering “several acquisition opportunities, with a rich pipeline” and it is benefiting from post-pandemic catch-up testing.

The post For $200 in weekly passive income, buy 10,300 shares of this ASX 200 stock appeared first on The Motley Fool Australia.

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More reading

• Why I think NAB could be the best ASX 200 bank share to buy right now
• Here are the top 10 ASX 200 shares today
• Why are ASX 200 mining shares ending the week in the red?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare. 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 recent years, with interest rates at record low levels, term deposits have been out of favour with investors and ASX shares have ruled the roost.

However, with rates now rising, demand for term deposits has been increasing.

And while term deposits are certainly great for those that are risk averse, the potential returns on offer from ASX shares arguably make them the better option for income investors.

For example, Commonwealth Bank of Australia (ASX: CBA) is currently offering 4% per annum on 12-month term deposits. Whereas the share market has historically provided investors with a 10% per annum return.

Furthermore, the share market provides a combination of potential income and capital gains through dividend shares, which is something that term deposits cannot offer.

But which ASX dividend shares would be good alternatives to term deposits? Listed below are two shares that analysts believe offer the winning combination of income and capital gains in spates.

Telstra Group Ltd (ASX: TLS)

A note out of Morgans reveals that its analysts are expecting a 17 cents per share fully franked dividend from this telco giant in FY 2023.

While this equates to a fully franked yield only marginally better than a term deposit at 4.1%, the broker also sees plenty of upside for its shares with its add rating and $4.70 price target.

So, with this ASX share currently fetching $4.18, this suggests it could rise 12.5%, which brings the total potential 12-month return to 16.6%. This is more than quadruple the return on offer with term deposits.

Westpac Banking Corp (ASX: WBC)

According to a note out of Goldman Sachs, its analysts have a conviction buy rating and $27.74 price target of this banking giant’s shares. Based on the latest Westpac share price of $22.67, this implies potential upside of 22% for investors over the next 12 months.

In addition, Goldman expects fully franked dividends of 147 cents per share in FY 2023 and then 156 cents per share in FY 2024. The former equates to a 6.5% yield, which brings the total potential return to 28.5%.

That’s 24.5% greater than the return you would get buying a term deposit.

The post Forget term deposits and buy these ASX shares appeared first on The Motley Fool Australia.

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More reading

• 3 steps to bring in $1,000 per month in passive income
• 7 ASX 200 shares with ex-dividend dates next week
• Morgans names 2 ASX 50 shares to buy now
• Why is Macquarie so bullish on Telstra shares?
• 3 ASX 200 dividend shares to buy now before their dividend payouts

Motley Fool contributor James Mickleboro has positions in Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Westpac Banking. 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 great thing about exchange traded funds (ETFs), is that investors can use them for different strategies.

Whether you want income, growth, or defensive options, there’s something out there for everyone.

On this occasion, we’re going to look at a couple of ETFs that could be top options for growth investors. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF for growth investors to look at next week is the BetaShares Asia Technology Tigers ETF.

This popular ETF gives investors access to the biggest and best tech companies in the Asian market. Many of which look set to benefit greatly from China’s reopening from the pandemic.

Among the ~50 technology and ecommerce companies included in the fund are the likes of Alibaba, Baidu, JD.com, Meituan Dianping, Pinduoduo, Samsung, and Tencent Holdings. The latter is the $620 billion tech company behind the widely used WeChat super app.

Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO)

Another ETF for growth investors to consider when the market reopens is the Vanguard MSCI Australian Small Companies Index ETF.

As you might have guessed from its name, this ETF gives investors access to small cap Australian shares.

It aims to track the MSCI ASX Small Cap index, which is home to approximately 200 small companies. Vanguard notes that the sectors in which the ETF invests include industrials, materials, and consumer discretionary.

Among its holdings you will find auto parts retailer Bapcor Ltd (ASX: BAP), lithium miner Core Lithium Ltd (ASX: CXO), online furniture retailer Temple & Webster Group Ltd (ASX: TPW), and online travel agent Webjet Limited (ASX: WEB).

The post 2 exciting ETFs for ASX growth investors to buy next week appeared first on The Motley Fool Australia.

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More reading

• 3 top tech ETFs for ASX investors to buy right now
• 2 ASX stocks I’ll be buying hand over fist in 2023
• 3 fantastic ETFs for ASX investors to buy in February
• 3 scintillating ETFs for ASX investors to buy this month

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Bapcor, Betashares Capital – Asia Technology Tigers Etf, and Temple & Webster Group. 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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Like Warren Buffett, I’m a big fan of buy and hold investing and believe it is the best way for investors to grow their wealth thanks to the power of compounding.

In order to show how successful it can be, I like to pick out a number of popular ASX shares to see how much a single $20,000 investment 10 years ago would be worth today.

This time around I have picked out the three ASX shares that are listed below:

Macquarie Group Ltd (ASX: MQG)

Thanks to its high quality operations and robust business model, this investment bank has been a great place to invest over the last decade. Since 2013, Macquarie has outperformed the big four banks significantly with its total average return of 19.25% per annum. This would have turned a $20,000 investment 10 years ago into almost $116,000 today.

REA Group Limited (ASX: REA)

Another ASX share that has beaten the market over the last decade has been property listings company REA Group. Thanks to the shift online for property listings and the domination of its realestate.com.au website, REA has delivered stellar earnings growth and big returns. Over the last 10 years, its shares have generated an average annual return of 17.5%. This means a $20,000 investment in 2013 would now be worth just over $100,000.

ResMed Inc. (ASX: RMD)

A third ASX share that has made shareholders smile is ResMed. Thanks to its industry-leading solutions and the growing awareness and prevalence of sleep disorders, ResMed has delivered consistently strong sales and earnings growth over the last decade. This has gone down well with the market and led to its shares generating an average total return of 23% per annum. This means that an investment of $20,000 into its shares in 2013 would have grown to be worth almost $160,000 this year.

The post $20k invested in these ASX shares 10 years ago is now worth over $100k appeared first on The Motley Fool Australia.

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More reading

• Buy these ASX 200 growth shares: Goldman Sachs
• These ASX 200 dividend shares are top of Macquarie’s income portfolio
• For $1,000 in monthly passive income, buy 1,770 shares of this ASX 200 stock
• Buy these ASX dividend shares next week: experts
• 3 excellent ASX 200 shares to buy and hold for a decade: analysts

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended Macquarie Group and ResMed. The Motley Fool Australia has recommended REA Group. 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 current National Australia Bank Ltd (ASX: NAB) share price looks like the most compelling S&P/ASX 200 Index (ASX: XJO) bank share opportunity to me.

There is plenty of competition for the top spot including Macquarie Group Ltd (ASX: MQG), Westpac Banking Corp (ASX: WBC), Commonwealth Bank of Australia (ASX: CBA), and ANZ Group Holdings Ltd (ASX: ANZ).

Certainly, I still highly rate names like Macquarie and Westpac, but there’s an argument for NAB being the pick of the bunch.

It’s a good environment for all of the banks at the moment – lending margins have increased thanks to higher interest rates and there hasn’t been an increase in arrears yet.

After seeing National Australia Bank’s quarterly update for the three months to 31 December 2022, I think it could be a good time to look at the ASX 200 bank share.

Impressive quarterly update

The bank said that it generated cash earnings of $2.15 billion for the quarter, which represented 18.7% growth. Cash earnings before tax and credit impairment charges went up by 27%. Statutory net profit after tax (NPAT) was $2.05 billion.

NAB explained that excluding markets and treasury, revenue rose 12%, thanks to higher margins and volume growth. Expenses only grew by 4%.

The ASX 200 bank share said the credit impairment charge was $158 million, reflecting the impact of “lower house prices and business lending volume growth. Specific charges remain at ‘low levels’”.

This is one of the most interesting things to me – the ratio of 90+ days past due and gross impaired assets and acceptances decreased 4 basis points to 0.62%. In other words, the percentage of total loans that are in arrears over 90 days improved from 0.66% to 0.62%.

Considering the large ramp-up of interest rates in Australia since May, seeing the arrears at this low point is impressive, in my view. However, I wouldn’t expect it to stay that low forever. Still, with it being this low, NAB is earning high levels of profit each month with strong cash flow.

The ASX 200 bank share remains very amply capitalised. Its common equity tier 1 (CET1) ratio was 11.3% at December 2022.

Why I think the NAB share price is the best ASX 200 bank share to buy

NAB seems to be doing the right things under Ross McEwan’s leadership to deliver growth and profit while maintaining a conservative posture for the upcoming period.

According to Commsec, the NAB share price is valued at under 12 times FY23’s estimated earnings with a possible FY23 grossed-up dividend yield of 8.2%.

That compares to the CBA share price which is valued at almost 17 times FY23’s estimated earnings with a grossed-up dividend yield of 6.2%.

I do like that Macquarie is growing globally, though NAB’s focus on the domestic economy could be a bonus if the global economy cools.

If NAB’s arrears perform well then the increase in interest rates and margins could largely be a one-way boost.

The post Why I think NAB could be the best ASX 200 bank share to buy right now appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why are ASX 200 mining shares ending the week in the red?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Westpac Banking. 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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One of the most important factors when it comes to choosing an exchange-traded fund (ETF) is the fees the fund charges. This is especially so with ASX index funds, which basically provide a similar service.

Fees are one of the most detrimental aspects of owning ETFs and index funds, especially over long periods of time. So minimising the fees one pays to invest in an index fund is of the utmost importance. Luckily for ASX index investors, the past week has seen something of a price war kick off.

It started off with the iShares Core S&P/ASX 200 ETF (ASX: IOZ). At the start of the week, provider BlackRock announced that its ‘Core’ series of ETFs, which include the iShares ASX 200 ETF index fund, would have their fees slashed.

The iShares ASX 200 ETF previously charged investors a management fee of 0.09% per annum. That’s $9 for every $10,000 invested per year. But this week, this fee was slashed by more than 40% to 0.05% per annum.

iShares also reduced the fees of another index fund that tracks the bond markets. The iShares Core Composite Bond ETF (ASX: IAF) previously charged investors 0.15% per annum. But it will now only ask 0.1% per annum.

ASX 200 index funds start ETF price war

Rival ETF provider BetaShares previously boasted the crown of having the cheapest ASX 200 ETF on the market with its BetaShares Australia 200 ETF (ASX: A200). Not to be outdone, it didn’t take long for BetaShares to then announce it was reducing its fees. Its flagship index fund will go from charging 0.07% to 0.04% per annum. That’s $4 per year for every $10,000 invested.

We haven’t yet heard from the ASX ‘s most popular index fund though. The Vanguard Australian Shares Index ETF (ASX: VAS) is by far the index fund of choice for ASX investors. And by a large margin too.

The Vanguard Australian Shares ETF is a little different to the funds offered by BlackRock and BetaShares. It tracks the ASX 300 Index rather than the ASX 200. This enables it to provide a little more exposure to the bottom end of the Australian share market than the others.

But this Vanguard fund currently has a management fee of 0.1% per annum. That now puts it pretty far from the edge in terms of what other ASX-based index funds are charging. There’s been no word yet as to whether Vanguard will be joining this new ETF price war. So watch this space.

The post There’s an ETF price war on the ASX right now. Here’s what you need to know appeared first on The Motley Fool Australia.

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More reading

• How I’d invest $200 in ASX 300 shares each month to target a $20,570 second income
• Banking on term deposits to retire rich? I’d buy ASX 200 dividend shares instead
• Vanguard Australian Shares Index ETF: Short-term pain for long-term gains
• How I’d generate a $30,000 retirement income from the Vanguard Australian Shares Index ETF
• Top ASX ETFs to buy in February 2023

Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Every six months, a large number of ASX shares release their results and report their profits for the period.

Many of these profitable companies like to reward their shareholders by sharing their earnings with them in the form of dividends.

One company that has paid out tens of billions of dollars to its shareholders in recent years is Rio Tinto Ltd (ASX: RIO).

In fact, this month when Rio Tinto released its full-year results, it declared a final dividend of US$2.25 per share. This brought the Rio Tinto dividend to a total of US$4.92 per share in FY 2022.

While this is a 38% reduction on what was paid a year earlier, it still equates to a total payout of US$8 billion for the year. It also represents a payout ratio of 60% of underlying earnings.

That means for every dollar of profit the company generated over the 12 months, it sent 60 cents of this into the pockets of shareholders.

And it’s going to be doing it all again in 2023 according to analysts at Goldman Sachs.

Its analysts are forecasting a US$4.50 per share dividend in FY 2023, which equates to A$6.61 per share based on current exchange rates.

And with Rio Tinto shares currently fetching $118.92, investors will receive a 5.55% dividend yield if Goldman’s forecast is accurate.

What would it take to generate $30,000 of income with Rio Tinto shares?

If you wanted to generate $30,000 of income from Rio Tinto shares, you would need to own 4,586 shares.

This would take a sizeable investment of $545,000 in order to yield the target figure.

The good news is that it wouldn’t be long until you received an even bigger pay check courtesy of Rio Tinto’s shares.

Goldman is forecasting the Rio Tinto dividend to increase to US$5.50 (A$8.08) per share in FY 2024. This means that your 4,586 shares would yield total dividends of $37,050 for that year.

That’s total dividends of over $67,000 across the two financial years. All without lifting a finger.

Though, it is worth remembering that the mining sector can be volatile due to commodity prices. As a result, it would be unwise to put all your eggs in one basket and investors may want to operate a more diverse income portfolio.

The post How I’d generate a $30,000 second income from Rio Tinto shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Did you know that the average period an investor holds onto a particular stock was eight years in the 1960s — but has dropped to just six months now?

Morgan Stanley head of global thematic & public policy research Michael Zezas cited this remarkable statistic to demonstrate the value of long-term horizons.

“Most investors would probably do better to focus on ‘secular’ themes, which are major trends that play out over a number of years and affect multiple sectors, rather than try to outwit the market on quarterly earnings or economic releases,” Zezas said in a Morgan Stanley research blog post.

He identified three such trends that investors should look for when screening for ASX shares to buy:

Supply chains will be ‘rewired’ 

Zezas claimed that his team recognised as early as five years ago that lowest cost was no longer the only criteria for businesses setting up supply chains.

Geopolitical risks were starting to be factored in.

“Morgan Stanley first flagged this secular trend in 2018 and believe it became the consensus following Russia’s invasion of Ukraine and the west’s policy response, which created fresh trade barriers and incentives to realign supply chains.”

An example of this is the US taking measures to protect its intellectual property in the semiconductor industry from China.

“The market may not fully grasp the practical implications of this rewiring,” said Zezas.

“It raises questions around how long it will take, whether it will lead to higher inflation, how such a transition will be financed and which companies and countries could benefit or suffer because of it.”

Journey to net zero carbon emissions

It seems all of the developed world is making efforts to transition to a cleaner global economy.

Zezas reckons it’s a tough ask.

“To reach net zero by 2050, carbon emissions would need to start falling by about 8% per year,” he said.

“Even during 2020, when COVID-19 lockdowns limited mobility and global GDP shrank, emissions fell only 5%.”

For each stock considered for addition to the portfolio, investors will need to carefully determine whether the underlying business will be a winner or loser out of this transition.

“One obvious beneficiary has been and will likely continue to be the clean tech industry,” said Zezas.

“With the recent passing of the Inflation Reduction Act [in the US], which provides significant federal support for wind, solar, hydrogen, energy storage and carbon capture, there is potential for long-term growth in this sector.”

Technology disruptions to be broader and deeper

Zezas admitted the spread of technology is nothing new.

But what’s different now is that tech is starting to touch industries that were out of reach in the past.

“Fragmented industries or those with high regulatory barriers have typically not reaped as many benefits from tech-driven productivity, but suddenly look poised for a multi-year transition via tech diffusion.”

Embedded finance revolutionising the consumer experience, tokenised assets providing financial inclusion, and health data ownership reform were named as examples of how tech was disrupting areas unimaginable decades ago.

The post 3 biggest themes to invest in for the long term: Morgan Stanley appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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