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If you’re looking for exposure to the banking sector, then Westpac Banking Corp (ASX: WBC) shares could be the way to do it.

That’s the view of analysts at Morgans, which have named the banking giant on its best ideas list for February.

Morgans’ best ideas are those that it believes offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence.

Why Westpac shares?

Morgans is positive on Westpac due to its belief that Australia’s oldest bank has the potential to deliver big return on equity improvements. It also highlights its attractive fully franked dividends. The broker explained:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.

Morgans currently has an add rating and $25.80 price target on Westpac’s shares. Which, based on its current share price, implies a potential return of 9.5% for investors over the next 12 months.

But of course, the returns don’t stop there. Westpac is a big favourite of income investors because it tends to provide a generous dividend yield.

Pleasingly, FY 2023 will be no exception according to Morgans. Its analysts are forecasting a $1.53 per share fully franked dividend this financial year. This equates to a pretty tasty 6.5% dividend yield at current levels.

Combined, this suggests that Westpac’s shares could provide investors with a total return of 16% between now and this time next year.

The post Westpac shares are ‘attractive for income-oriented investors’: analyst appeared first on The Motley Fool Australia.

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More reading

• Investing in ASX 200 bank shares? Here’s the dividend outlook for 2023
• Forget gold! ASX 200 blue-chip shares could be the new safe-haven asset
• 5 things to watch on the ASX 200 on Wednesday
• Everything you need to know about Wednesday’s Australian inflation data release
• How much profit could Westpac shares make in 2023?

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 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 All Ordinaries (ASX: XAO) is having a positive day. In afternoon trade, the index is up 0.3% to 7,708.5 points. This leaves it trading approximately 3% away from its 52-week high.

Three ASX All Ordinaries shares that have already reached that milestone during today’s session are listed below. Here’s why they are hitting new highs today:

Accent Group Ltd (ASX: AX1)

The Accent share price climbed to a new 52-week high of $2.27 on Wednesday. Investors have been scrambling to buy this footwear and fashion retailer’s shares in recent weeks thanks partly to a strong trading update. So much so, the Accent share price is now up a sizeable 35% since the start of the year. That update revealed that total sales for the first half were up 33% over the prior corresponding period to $825 million. This is expected to lead to half year earnings before interest and tax (EBIT) in the range of $90 million to $92 million, up from $30.3 million a year earlier.

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura share price has hit a new 52-week high of 63.7 cents today. While there has been no news out of the rare earths developer today, its shares have been on fire since early November. This has been driven by a combination of good progress at the company’s Nolans project, the positive outlook for rare earths demand, and investments from key backers in the mining space. The latter includes Gina Rinehart’s Hancock Prospecting business taking part in a recent capital raising.

Emerald Resources NL (ASX: EMR)

The Emerald Resources share price has hit a 52-week high of $1.45. Last month, Emerald revealed that it achieved record production of 29,640 ounces of gold during the December quarter. This comes at a time when the gold price is particularly strong, which bodes well for the gold miner’s earnings in the first half.

The post 3 ASX All Ordinaries stocks hitting new 52-week highs today appeared first on The Motley Fool Australia.

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• Why is the Arafura share price surging 12% to an 11-year high?
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• Brokers name 3 ASX shares to buy now
• Why Accent, Mineral Resources, Newcrest, and Whitehaven Coal shares are dropping
• Why Accent, Iluka, Myer, and QBE shares are charging higher today

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 recommended Accent 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 S&P/ASX 200 Index (ASX: XJO) peaked at a nine-month high on Wednesday, helped along by five shares hitting their own long-forgotten highs.

Right now, the index is up 0.28% at just under 7,500 points. That’s less than 2% off the all-time high it set in August 2021.

Among the stocks rejoicing alongside the iconic index today are some of the market’s most recognisable names. Let’s take a look at their shiny new 52-week highs.

5 ASX 200 shares soaring to long-forgotten highs

First off the bat is ASX 200 banking giant Commonwealth Bank of Australia (ASX: CBA). It hit another record high today, peaking at $110.81 – a 0.7% gain on its previous close.

Interestingly, there’s been no news from the ASX’s second largest company, commanding a market capitalisation of $185 billion.

However, its stock has now bested its previous 52-week high for four consecutive sessions.

Joining CBA shares in posting a new 12-month high are those of Rio Tinto Ltd (ASX: RIO). Stock in the iron ore giant rocketed 1.7% earlier today to a high of $128.78.

Investors might be snapping up Rio Tinto shares for the company’s exposure to iron ore and copper, or its whopping dividend yield. Whatever the reason, it appears to be good news for the Rio Tinto share price.

And who could forget shares in ASX 200 travel giant Webjet Limited (ASX: WEB)? They launched 2.3% earlier today to reach $7 – the highest the stock has been since the onset of the COVID-19 pandemic.

That’s despite only silence from the online travel agent. Indeed, the last time the market heard news from Webjet was back in November. And investors might have more time to wait.

The company isn’t expecting to post its full-year earnings until May.

The Treasury Wine Estates Ltd (ASX: TWE) share price is also taking off today, peaking at $14.84 – a 2.2% gain on its previous close and another post-pandemic high.

The company has been tipped to benefit if tensions between Australia and China ease this year.

Finally, also posting a new 52-week high today is ASX 200 healthcare share Pro Medicus Limited (ASX: PME). It soared 1.4% to hit $67.80 shortly after the market opened today.

The stock has been on a roll in 2023, gaining 22% year to date amid news of contracts with Samaritan Health Service and the University of Washington.

The post 5 ASX 200 shares smashing new 52-week highs on Wednesday appeared first on The Motley Fool Australia.

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More reading

• The Rio Tinto share price just hit a new 52-week high! Here’s why
• 2 explosive ASX growth shares to buy now: Goldman Sachs
• Own Rio Tinto shares? The iron ore giant just sank $21m into this copper stock
• CBA share price hits new record high again on Tuesday
• 3 of the very best ASX 200 travel shares to buy according to Goldman Sachs

Motley Fool contributor Brooke Cooper 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 Pro Medicus. The Motley Fool Australia has positions in and has recommended Pro Medicus. The Motley Fool Australia has recommended Treasury Wine Estates. 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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S&P/ASX 200 Index (ASX: XJO) gold shares have enjoyed a solid start to 2023, buoyed by a more than 4% boost in the price of the yellow metal since 3 January. 

At the time of writing, gold is trading for U$1,925 per ounce.

Year-to-date, that lift has seen ASX gold share Northern Star Resources Ltd (ASX: NST) leap 14% higher, while Newcrest Mining Ltd (ASX: NCM) shares have gained 6%, and the Evolution Mining Ltd (ASX: EVN) share price is up 5%.

The blue-chip gold stocks, logically, tend to perform better from an investment perspective when the gold price is rising.

And economic 101 dictates that prices tend to rise amid increasing demand or falling supply.

So what can investors in ASX 200 gold shares expect for 2023?

For some greater insight into those supply and demand dynamics, we turn to The World Gold Council’s latest Gold Demand Trends report.

What happened with gold in 2022?

Before addressing how gold demand may impact ASX 200 gold shares in 2023, it’s worth noting that worldwide gold demand in 2022 (excluding OTC) increased 18%. The 4,741 tonnes of gold represents the highest yearly demand since 2011.

The Council said those decade-high demand levels were driven by “hefty central bank-buying” and strong retail investment.

Indeed, central banks purchased 1,136 tonnes of bullion in 2022. That’s a 150% increase from the 450 tonnes that central banks bought in 2021. And this trend was picking up pace as the year unfolded, with the banks buying 417 tonnes of gold in the fourth quarter alone.

Commenting on the data, Louise Street, senior markets analyst at the World Gold Council, said:

Last year we saw the highest level of annual gold demand in over a decade, driven in part by colossal central bank demand for the safe haven asset.

Gold’s diverse demand drivers played a balancing act as rising interest rates prompted some tactical ETF outflows, while elevated inflation spurred on gold bar and coin investment. In the end, overall investment demand was up 11% on the previous year.

That’s the year gone by.

So, let’s get back to the outlook for the gold supply and demand, and how that may impact ASX 200 gold shares, in the year ahead.

What can ASX 200 gold share investors expect in 2023?

As Street points out, there are a lot of competing factors at play that will determine the average gold price in 2023.

“Economic forecasts are pointing to a challenging environment and a likely global recession which could lead to a role reversal in gold investment trends. If inflation comes down, this could be a headwind for gold bar and coin investment,” she said.

On the flip side, she added, “Continued weakening of the US dollar and the moderating pace of interest rate hikes could have positive implications for gold-backed ETF demand.”

The Council expects gold demand for jewellery to remain strong. Though the increased demand expected from China’s COVID-zero reopening could be diminished by reduced consumer spending, should the major world economies slip into recessions.

“While there are several possible outcomes, gold has a precedent for performing well in turbulent economic times, highlighting its value as a long-term, strategic asset,” Street said.

On the potential supply side impacts for ASX 200 gold shares, the Council reported that the total annual supply of bullion increased 2% in 2022 to 4,755 tonnes. Mine production hit four-year highs last year, reaching 3,612 tonnes.

How have these ASX 200 gold stocks been tracking?

You can see the 12-month performance of these three ASX 200 gold shares in the charts below.

Since this time last year, the Evolution share price is down 10%; Northern Star shares have gained 50%; and Newcrest Mining shares are flat over the 12 months.

The post Investing in ASX 200 gold shares? Here’s what to expect from the yellow metal in 2023 appeared first on The Motley Fool Australia.

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More reading

• Up 30% in 4 months! ASX 200 gold share Newcrest is still trading cheap: fundie
• 5 things to watch on the ASX 200 on Wednesday
• This is the ASX 200 gold mining share to buy now: Morgans
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Bernd Struben 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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The S&P/ASX 200 Index (ASX: XJO) is having another great trading session so far today. After the shakiness we saw yesterday, the ASX 200 has gained 0.29% at the time of writing to just under 7,500 points. 

So let’s dive deeper into today’s pleasing performance by taking a look at the ASX 200 shares that are currently topping the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Wednesday

Core Lithium Ltd (ASX: CXO)

Our first chip off the block today is ASX 200 lithium stock Core Lithium. So far this Wednesday, a sizeable 12.2 million Core shares have been traded on the share market.

There’s been no new news out of Core today. As such, we can probably put this high volume down to the gyrations we have seen with this company’s share price.

After a relatively strong start this morning, Core Lithium shares have nosedived as the afternoon has progressed. The company is now down by a nasty 2.16% at $1.135 a share after going as high as $1.20 soon after open. It’s this volatility and sizeable share price fall that we can probably blame for this high volume.

Telstra Group Ltd (ASX: TLS)

ASX 200 telco Telstra is our next share worth a look this Wednesday. A notable 13.62 million Telstra shares have been called in for trading at the time of writing. There’s been no fresh news out of Telstra either. So the telco’s elevated volumes are again a probable consequence of the company’s share price movements themselves.

Unlike Core Lithium, the Telstra share price has gone from strength to strength today. The company opened at $4.09 a share this morning and has risen by 1.96% at present to $4.16 apiece. This continues the company’s good run of late, with Telstra now up 5.2% in 2023 to date.

Sayona Mining Ltd (ASX: SYA)

Our final and most traded ASX 200 share for today is another ASX 200 lithium stock in Sayona Mining. Sayona is in a league of its own today, with a hefty 29.9 million shares finding their way across the ASX to a new home so far this session.

Sayona did release its quarterly activities report for the December quarter last night after market close. As we covered earlier this afternoon, Sayona told investors that the production timeline of its North America Lithium project has accelerated.

Investors reacted positively to this news this morning, sending Sayona up more than 7% at one point. However, the market seems to have gotten cold feet, and Sayona is back down to the 26 cents it started the day at. This bouncing around has probably been the cause of so many shares flying around.

The post Here are the 3 most heavily traded ASX 200 shares on Wednesday appeared first on The Motley Fool Australia.

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More reading

• ASX shares investors rejoice! RBA says inflation has now peaked
• Jeremy Grantham just warned shares could crash 50%, but did he also suggest lithium stocks may have “a substantial advantage” over the long-term?
• Should I buy Qantas shares before the company’s ASX earnings update?
• Guess which ASX 200 share dropped then popped on a 30% profit dive
• Up 30% in 4 months! ASX 200 gold share Newcrest is still trading cheap: fundie

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

IGO Ltd (ASX: IGO)

According to a note out of Citi, its analysts have retained their buy rating on this battery materials miner’s shares with a slightly trimmed price target of $17.10. Citi was pleased with the company’s performance during the first half and the record interim dividend. And while it suspects that lithium prices may have peaked, it still sees IGO benefitting from strong pricing for some time. The IGO share price is trading at $14.76 on Wednesday.

Megaport Ltd (ASX: MP1)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this network services company’s shares with a reduced price target of $8.10. While Goldman wasn’t too impressed with operational trends during the first half, it remains positive on the company. This is due to Megaport having a clear product advantage versus peers and a decade-long runway for robust growth. The Megaport share price is fetching $5.78 this afternoon.

Pointsbet Holdings Ltd (ASX: PBH)

Analysts at Bell Potter have retained their speculative buy rating but cut their price target on this sports betting company’s shares to $3.50. This follows the release of a solid quarterly update earlier this week. And while Bell Potter believes that PointsBet will require a $100 million equity raising in FY 2024, it isn’t putting the broker off. It appears to believe that the company’s shares are a great long term option due to its very large opportunity in North America. The Pointsbet share price is trading at $1.48 on Wednesday.

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

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• Are Megaport shares mega cheap following Tuesday’s crash?
• 5 things to watch on the ASX 200 on Wednesday
• ASX 300 betting shares tumble on disappointing quarterlies
• 3 ASX lithium shares hammered after quarterly updates on Tuesday
• Why Bubs, Core Lithium, Megaport, and Pointsbet shares are crashing today

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 Megaport and PointsBet. The Motley Fool Australia has recommended Megaport and PointsBet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s a good day for ASX shares investors today. The S&P/ASX 200 Index (ASX: XJO) is up 0.35% and the S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.34%.

There’s some good economic news likely contributing to this market momentum today. The Reserve Bank of Australia has told a government hearing that it believes inflation in Australia has already peaked.

But that doesn’t mean there aren’t more interest rate rises coming.

Head of the RBA’s economic analysis team Marion Kohler fronted the senate select committee on the cost of living today.

In her opening statement, Kohler said:

… we think the peak in inflation was at the end of 2022 – at around 8 per cent – and that inflation will begin to ease over the course of this year”.

What does this mean for ASX shares?

Inflation is a problem for most ASX shares because it increases input costs for companies.

Some ASX shares are less affected by cost inflation because they can offset it. They can do this by increasing the prices they charge consumers for their products and services.

The companies that can do this without too much trouble are in the consumer staples sector of the ASX. Examples include Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).

Some companies have inflation built into their contracts, which means when inflation goes up, so does their income. Examples include Transurban Group (ASX: TCL), which has about 70% of its toll road contracts linked to inflation. So, they’re somewhat protected.

But all in all, most companies will tell you they prefer inflation at the lower end of the scale. Typically, the lower their costs, the higher their profits.

What about interest rates?

Inflation is the sole reason interest rates have gone up so much over the past 12 months. So, if inflation has peaked, does that mean interest rates won’t go any higher?

Sorry, no.

Unfortunately, we have a long way to go before getting inflation back into the RBA’s comfort zone of 2% to 3%. And that’s what they want.

The latest quarterly inflation report for December showed a higher-than-expected increase in the consumer price index (CPI). It went up 1.9% over the quarter to bring the annual rate for 2022 to 7.8%.

The RBA Board is “focused on returning inflation to target”, according to Kohler. This means despite the pain that rising rates are causing businesses and borrowers, they will go on.

Kohler explained that continuing to increase rates meant inflation would fall faster.

She said:

We understand that some people are finding the rise in interest rates difficult to manage and others will have to cut back on discretionary spending.

However, higher interest rates are necessary to ensure that the current period of higher inflation and cost of living pressures does not persist too long.

The impact of further increases to interest rates on ASX shares is two-fold.

Firstly, it’s another rising input cost for any company with debt on its books.

Secondly, rising rates mean homeowners will keep tightening their belts, which usually means cutting back on discretionary items.

That’s not good for ASX consumer discretionary shares, nor other ASX shares like travel stocks.

The RBA Board will meet again on Tuesday to make its next monthly interest rate decision.

The experts reckon a 25 basis point rise is on the cards, taking the official cash rate from 3.1% to 3.35%.

The post ASX shares investors rejoice! RBA says inflation has now peaked appeared first on The Motley Fool Australia.

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More reading

• Should I buy Qantas shares before the company’s ASX earnings update?
• Guess which ASX 200 share dropped then popped on a 30% profit dive
• Up 30% in 4 months! ASX 200 gold share Newcrest is still trading cheap: fundie
• ASX 200 lithium share Sayona Mining leaps on strong quarterly
• The Pilbara Minerals share price has rocketed! Have I left it too late to buy?

Motley Fool contributor Bronwyn Allen 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 Coles 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 lithium industry has started 2023 strongly. Since the start of the year, a number of ASX 200 lithium shares have generated stellar returns for investors.

This has been driven by optimism that lithium prices will remain higher for longer. This would be good news for miners and those on the cusp of pulling the battery-making ingredient out of the ground.

Should I buy ASX 200 lithium shares?

Well, firstly, I have had exposure to the lithium industry for a few years through my investment in what has become Allkem Ltd (ASX: AKE).

So, the question becomes, would I buy ASX 200 lithium shares today if I didn’t already own Allkem shares?

This is a difficult question to answer. While I have zero plans to sell my Allkem shares, I’m not certain that I would be jumping in right now.

That’s because when I make an investment, I like the risk/reward to be compelling.

This is something that I thought I saw in Domino’s Pizza Enterprises Ltd (ASX: DMP) shares back in November. Since that purchase, the Domino’s share price is up over 33%.

However, with the Allkem share price up approximately 20% since the start of the year, I don’t personally believe the risk/reward is overly compelling given the uncertainty over future lithium prices. And that goes for all the ASX 200 lithium shares.

But given the volatility that occurs in the lithium industry periodically, investors may not have to wait long until they get an opportunity to invest at a more favourable level. In light of this, I would sit tight and wait for a pullback before considering an investment.

Brokers remain positive

It is worth noting that some brokers aren’t holding back for a better price.

For example, Macquarie has an outperform rating and $7.50 price target on Pilbara Minerals Ltd (ASX: PLS) shares, Goldman Sachs has a buy rating and $15.50 price target on Allkem’s shares, and UBS has a buy rating and $112.00 price target on Mineral Resources Ltd (ASX: MIN) shares.

These price targets imply a minimum of 18% upside for each of these ASX 200 lithium shares.

The post Should I buy ASX 200 lithium shares now or not? appeared first on The Motley Fool Australia.

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More reading

• Jeremy Grantham just warned shares could crash 50%, but did he also suggest lithium stocks may have “a substantial advantage” over the long-term?
• The Pilbara Minerals share price has rocketed! Have I left it too late to buy?
• These were the best performing ASX 200 shares in January
• Why was the Lynas share price hit so hard on Tuesday?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor James Mickleboro has positions in Allkem and Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s no secret that ASX shares had a cracking start to the year. Over January, the S&P/ASX 200 Index (ASX: XJO) rose from 7,038.7 to 7,476.7 points – a rise of 6.2%. That means that most ASX index funds would have recorded a similar level of gains. But the same can’t be said of the Vanguard MSCI Index International Shares ETF (ASX: VGS).

The Vanguard International Shares ETF is one of the most popular exchange-traded funds (ETFs) on the ASX. But it did not deliver for investors over January as an ASX 200 ETF would have.

Over the month just gone, this ETF went from $91.98 per unit to $93.10 by the end of January. That’s a rise worth 1.22%:

Nothing to turn one’s nose up against – but still enough to make this ETF a significant market lagger over January.

So what happened here to cause such a chasm of value between the Vanguard International Shares ETF and the ASX?

What’s behind the Vanguard International Shares ETF’s lukewarm start to 2023?

Well, there’s a relatively simple explanation: the Vanguard International Shares ETF is not related to the ASX at all. In fact, it holds no ASX shares within its portfolio.

That’s because this index fund tracks the MSCI World ex-Australia Index. This index holds around 1,500 shares holdings from advanced economies around the world. Most of its holdings are American, but it also has exposure to the Japanese, British, Canadian, and European markets.

Its largest holdings are dominated by the US tech giants though. Among the most dominant are Apple, Microsoft, Alphabet, and Amazon, as well as Johnson & Johnson, Exxon Mobil, and Berkshire Hathaway.

So this explains why the Vanguard International Shares ETF had such a different January to the ASX 200. Or does it?

On closer inspection, many of the largest shares within this ETF’s portfolio actually had stunning Januarys. Apple rose by around 10% last month. Microsoft was up by 3.3%, and Alphabet and Amazon shares rose by 12% and 22.8% respectively.

So what’s going on here?

Dollars and dollars

Well, there is one factor that has probably blunted this ETF over the past month – the Australian dollar. The Aussie dollar had a particularly strong month against the US dollar. Our dollar finished 2022 at around 68 US cents.

But it ended January at around 71 cents after going as high as 72 cents a few days earlier. This might not seem like a big difference, but it represents a move of up to 6%.

When US assets are priced in Aussie dollars (as this ETF is by virtue of its ASX listing), a rising Aussie dollar reduces the value of the US-priced assets. So currency fluctuations seem to have taken a big chunk of value out of the Vanguard International Shares ETF over January.

So that’s what investors in this ETF can probably blame for the miserly performance that the fund had last month against the ASX 200.

Saying that, the Vanguard International Shares ETF has still returned an average of 10.65% per annum since its inception in 2014.

The post The Vanguard MSCI Index International Shares ETF lagged the market in January. Here’s why? appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon.com, Apple, Berkshire Hathaway, Johnson & Johnson, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, Microsoft, and Vanguard Msci Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, Berkshire Hathaway, and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It was the best of times, it was the worst of times. The last five years have been a rollercoaster for Zip Co Ltd (ASX: ZIP) shares. 

What is now ASX’s largest buy now, pay later (BNPL) provider began life on the market as resource stock Rubianna. It transformed into the Zip we know today after acquiring the fledgling BNPL business in 2015 – a year after it first launched.

The Zip share price then gained more than 3,500% over the following years, hitting a record high of $14.53 in early 2021. But the years since haven’t been nearly so kind.

Of course, past performance is not an indication of future performance. Still, I’d argue it’s important to look to the past to determine how a company came to be where it is, and how it might move forward.

Recapping the Zip share price

The Zip share price has fallen more than 90% over the last two years to trade at 66 cents today. Looking further back, it’s fallen 48% over the last five years – an average of nearly 10% each year.

Of course, there’s more to the company’s story than those numbers. It rose to its highest heights during the 2021 tech rally alongside former market darling Afterpay.

While there’s heaps of competition in the BNPL space today – Apple Inc (NASDAQ: AAPL), PayPal Holdings Inc (NASDAQ: PYPL), and even some of Australia’s big four banks boast BNPL offerings – back in 2020 and 2021 consumers wishing to pay for purchases in instalments only had a handful of choices, Zip being one. And its revenue was growing. However, it didn’t grow fast enough.

The market turned on unprofitable companies in 2022 as surging inflation dinted consumers’ back pockets and led to rate hikes around the globe.

In turn, the cost of borrowing soared and concerns Zip could face more bad debts amassed.

Looking to the future

So, that’s what brought Zip shares to where they find themselves today. Could worst be behind them?

The obvious happening that could turn things around for the stock would be a maiden profit.

Passing the financial milestone could boost both sentiment and confidence in the stock, thereby bolstering its price.

Zip posted record revenue and transaction volume for the December quarter. Its United States segment also became profitable during the period.

Not to mention, the company expects to be cash earnings before tax, depreciation, and amortisation (EBTDA) positive on a sustainable basis at the end of this financial year.

It also boasted $78.5 million of cash and liquidity – enough to see it through to the milestone, according to the company. That suggests it mightn’t need to raise cash in the near future.

Could Zip shares provide returns in 2023?

With that in mind, it’s definitely possible the Zip share price could pull itself up by the bootstraps and charge forward in 2023. Indeed, it could be on track to post a notable recovery before the year is out.

However, I’m still sceptical of the BNPL giant’s future. Unprofitable outfits generally house a considerable level of uncertainty. Additionally, many of the factors weighing on Zip in 2022 haven’t abated yet.

For that reason, I’m passing on Zip shares for now. Instead, I’ll keep a hold of my cash until I come across an investment I have more confidence in.

The post If I buy $1,000 of Zip shares now, what could my returns be this year? appeared first on The Motley Fool Australia.

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More reading

• Avoid my biggest mistake in investing: fund manager
• The Zip share price: Has it bottomed out?
• Why Coronado Global, Mincor, OFX, and Zip shares are dropping today
• Zip share price on the move amid record quarter and US profitability
• Why Boss Energy, Pilbara Minerals, Sezzle, and Zip shares are charging higher

Motley Fool contributor Brooke Cooper 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 Apple, PayPal, and Zip Co. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and PayPal. 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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