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

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

The monthly cost of being a diehard Apple (NASDAQ: AAPL) fan is going up.

Apple recently announced price increases for Apple Music and Apple TV+, charging subscribers $1 or $2 more per month. Apple is pushing those price increases into the Apple One bundle as well, which also includes Apple Arcade, Apple News+, iCloud, and more.

What’s not going up in price? The iPhone.

These price changes, or lack thereof, can tell investors a lot about how Apple is positioning itself for the future.

Apple is sacrificing device profits

The cost of everything has gone way up over the past year due to inflation, and the iPhone is no different. Estimates indicate the bill of material for the iPhone 14 Pro Max was 20% higher than that of the 13 Pro Max.

The cost of all the components found inside that little glass rectangle totaled nearly 46% of Apple’s asking price this year. That’s the highest cost of material relative to its price Apple has paid for any Max model.

Instead of passing on the increased costs to consumers, Apple decided to keep the price of all its iPhone models the same. With competitors increasing prices and inflation running rampant, it means Apple made its iPhones much more attractive in terms of price.

That’s a bold move for a company that generated 52% of its revenue from the iPhone over the past year. It’s not just the iPhone, either. Apple notably also gave Apple TV device purchasers a price cut on its new 4K Apple TV, which now starts at just $129.

And while the new iPads have a higher starting price, Apple is keeping the old model in the lineup at its current price. That’s a move the company has made with other hardware lineups, including the Mac, in order to maintain affordable pricing.

The push toward more profitable services

It was just a few years ago that Apple TV+ was seen as a clever way to incentivize new iPhone purchases. Apple launched the service with a generous 12-month trial for anyone who bought a new Apple device.

But the recent price hike indicates Apple is serious about making the streaming service a profitable endeavor. It’s making major licensing deals with sports leagues and its prestige original content is starting to gain traction with a broad audience. It’s also looking into adding advertising to the platform.

The margin profile on the overall services business is extremely attractive, even considering the significant losses it’s likely incurring on newer efforts like Apple TV+. Apple’s services gross margin over the past year was 71.7%. That’s nearly twice as high as its 36.3% device gross margin.

Gross margin for the services business continues to expand, and it’ll likely expand further as Apple pushes prices higher. All told, services accounted for nearly one-third of total gross profit at Apple over the past year. And services will likely account for an even greater percentage going forward as Apple aims to increase pricing.

So, keeping device prices as low as possible, even to the point of sacrificing margin on its biggest revenue source, can help drive overall sales and grow the user base of Apple device owners. With a bigger base to sell its services to, Apple can maximize its most profitable (and still increasingly profitable) segment, services.

The recent pricing decisions offer clear evidence that Apple sees services as the core profit driver going forward.

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

The post Apple’s latest price changes tell investors a lot about the future of the company appeared first on The Motley Fool Australia.

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Adam Levy has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. 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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Bubs Australia Ltd (ASX: BUB) share price has come under significant pressure this week.

This morning the junior infant formula company’s shares are down over 1% to 37 cents, bringing their week-to-date decline to a sizeable 16%.

It also means the Bubs share price is now down 57% from its 52-week high.

What’s going on with the Bubs share price?

Investors have been selling the company’s shares following the release of a very disappointing first quarter update on Monday.

That update revealed softer than expected sales growth, a large cash burn, and very weak outlook in China.

In response to the update, the team at Bell Potter has downgraded the company’s shares to a speculative hold rating and slashed the price target on them by 40% to 45 cents.

What did the broker say?

Bell Potter’s analysts were disappointed with Bubs’ first quarter performance. They commented:

1Q23 gross revenue of $23.6m was up +28% YOY, but sequentially down -51% QOQ. IMF made up 92% of quarterly revenues with the US making up 40% of revenues at A$9.6m. China IMF sales grew +4% YOY, with +20% YOY growth in Daigou sales. At face value IMF gross revenues of ~$22m was below our expectations, where we had anticipated completion of the original AZ Global Bub’s Supreme purchase order and continued US inventory fill to make a more meaningful 1Q23 contribution.

Unfortunately, the broker isn’t expecting things to improve and has made major revisions to its estimates. It said:

Following a softer than expected 1Q23 sales outcome, cautionary 2Q23e China IMF commentary and peer group comments on the US competitive landscape, we have adopted softer near term revenue forecasts, with our forecasts down -27% in FY23e, – 23% in FY24e and -20% in FY25e. Revenue downgrades along with higher marketing costs results in EBITDA downgrades of -98% in FY23e, -61% in FY24e and -50% in FY25e.

Overall, while Bell Potter acknowledges that there are bound to be a few bumps on the road, this bump was too large to ignore. It concludes:

While cognisant that the pathway to building brands is never linear, the shortfall in 1Q23 IMF revenues versus our expectations results in a more cautionary approach to near term revenue growth, earnings growth and valuation.

The post Why is the Bubs share price down 16% this week? 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 recommended BUBS AUST FPO. 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 AMP Ltd (ASX: AMP) share price has undergone a steady recovery throughout October.

Shares of the financial services company opened at $1.09 on 3 October and closed at $1.26 on 31 October for an appreciable 15.6% gain.

This was a sharp rebound from September’s performance when AMP shares were sold off mid-month. The sell-off bled into October with the AMP share price hitting a low of $1.06 on 3 October, a level unseen since the end of July.

But the last month has provided some reasons for investors to feel optimistic. Let’s cover the highlights.

AMP October recap

AMP shares made a new 52-week high yesterday to end the month at $1.26 apiece as the share price rode on some positive developments built earlier in the month.

Just last week, there were arguments AMP is being potentially undervalued on a price-to-book (P/B) basis. My Fool colleague Brooke notes the company has a P/B ratio of around 0.8, which may compare favourably to other ASX financial shares.

Continuing the line that AMP could be trading at a discount to its intrinsic value, a fund manager singled out AMP as being a dividend share “of particular interest”. Bennelong Kardinia Absolute Return Fund portfolio manager Kristiaan Rehder thinks it has “considerable excess capital” and says it may “surprise the market in regards to the extent of its capital returns in the near term”.

Prior to that, on 17 October, my colleague Tristian noted that AMP’s $350 million on-market share buyback program has coincided with a modest share price gain since it was rolled out in August.

So, all in all, there’s been some positive speculation around the company which may have fuelled its share price recovery throughout October.

AMP share price snapshot

AMP shares are currently trading for $1.26 each, steady on yesterday’s closing price.

The AMP share price is up an impressive 26% year to date. That’s certainly outperforming the S&P/ASX 200 Index (ASX: XJO) — it’s down around 8% over the same period.

The company’s market capitalisation is around $3.95 billion.

The post How did the AMP share price perform in October? appeared first on The Motley Fool Australia.

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• These were the worst-performing ASX 200 shares in October
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Motley Fool contributor Matthew Farley 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 ReadyTech Holdings Ltd (ASX: RDY) share price is rocketing higher on Tuesday morning.

At the time of writing, the enterprise software company’s shares are up 32% to $4.28.

Why is the ReadyTech share price rocketing higher?

Investors have been scrambling to buy ReadyTech’s shares after it became the latest tech company to receive a takeover offer.

According to an announcement, the company has received a conditional, non-binding indicative proposal from funds managed or advised by Pacific Equity Partners (PEP) to acquire it by way of a scheme of arrangement at an offer price of $4.50 per share.

This represents a 38.9% premium to the ReadyTech share price at the close of play on Monday.

The release notes that the Australian private equity firm’s proposal is subject to a number of conditions. These include completion of satisfactory due diligence, negotiation and execution of transaction documentation, obtaining binding commitments from debt financiers, final investment committee approval, certain regulatory and other approvals, and other customary conditions precedent.

ReadyTech also revealed that its major shareholder, Pemba Capital Partners, will work together with PEP on the proposal. However, it stressed that Pemba, which currently holds 32.01% of the company’s issued share capital, has no prior agreement, arrangement, or understanding in relation to the proposal.

What’s next?

The company established an Independent Board Committee and has carefully considered the proposal. And, with the benefit of advice from its financial and legal advisers, it has granted PEP non-exclusive access to non-public due diligence information to allow it to develop a more certain proposal.

For now, discussions are ongoing and no agreement has been reached between the parties in relation to the value, structure or terms of any transaction. Management also warned that there is no certainty that these discussions will result in a transaction.

As a result, it has stated that shareholders do not need to take any action in relation to the proposal.

The post ReadyTech becomes latest ASX tech share targeted for a takeover 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 positions in and has recommended Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd. 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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As we covered here on the Fool last month, there is something funny going on with the Telstra Corporation Ltd (ASX: TLS) share price of late. Or should it be ASX: TLSDA?

Telstra shares are still trading on the ASX. But until this morning, one might have a hard time finding a pricing quote for TLS shares in recent days, the traditional ticker code that Telstra has always used.

That’s because Telstra had been trading under a different ticker code for a while now. Investors wanting to look up the telco would have had to use the TLSDA code. So why the change?

Well, all of these shenanigans stem from the company’s restructuring program, which is now completed as of today.

As the company outlined earlier this year, part of its T25 cost-cutting and structural strategy involves a corporate and legal restructuring. It will see Telstra Corporation Limited become Telstra Group Limited.

Nothing much will change for shareholders when the dust has settled. But it will see ‘Telstra Group’ technically become a holding company for Telstra’s four underlying businesses, which will now be legally separated. These are ServeCo, InfraCo Fixed, Amplitel, and Telstra International.

Telstra and its ASX TLS ticker code get a shake up

Here’s how management explained this move to shareholders in an ASX announcement:

The restructure was a key component of our T22 strategy and is also a key component of our new T25 strategy, announced last year. It is an important next step in our drive to increase the transparency of our infrastructure assets and to improve management focus on our infrastructure and customer businesses, and consequently provides us more flexibility to create additional value for you, our shareholders…

The restructure is an internal legal re-organisation and will not itself result in any immediate change to the underlying assets or business activities of the Telstra Group. It will provide us with more options and potential to realise additional value for Telstra Shareholders from our infrastructure assets.

So this explains why there have been separate Telstra ticker codes on the ASX. According to the company’s schedule, 20 October was the last day that the TLS shares of the old Telstra Corporation traded on the ASX. After that date, the company moved to the TLSDA code under the name Telstra Group Limited.

There weren’t two separate tickers for Telstra. Rather, the TLSDA code represented Telstra shares trading on a deferred settlement basis while the restructuring was underway.

But today marks the first day that Telstra Group Limited shares trade on the ASX on a normal basis. As such, the ticker code has returned to TLS. The TLSDA-coded shares will be settled on 3 November later this week.

So that’s it for all of the ASX changes. But the company will technically complete this whole restructuring program on 1 January next year.

So shareholders can breathe a sigh of relief. This whole process is now pretty much finalised, and Telstra is back to its old ticker code from today onwards.

The post Telstra ASX code roadmap: what it was, what it is, and what it will be appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 Corporation Limited. 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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Billionaire and investing powerhouse Warren Buffett is often heralded as the greatest investor of all time. And much of his wealth has been built by investing in undervalued shares – a tactic ASX investors can take advantage of.

Particularly, as this year has weighed on ASX share prices broadly, meaning there are likely plenty of bargains in the mix right now.

The S&P/ASX 200 Index (ASX: XJO) has fallen 9.5% so far this year while the benchmark All Ordinaries Index (ASX: XAO) has dumped 11%.

It’s a worse situation on Wall Street. Key New York-based indices have tumbled into bear markets in recent months.

But stock in Buffett’s Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) has outperformed. It’s fallen around 2% over the first 10 months of 2022.

It’s likely the company’s shares have been buoyed by positions in other listed entities that it snapped up for less than their intrinsic values.

So, what advice from the ‘Oracle of Omaha’ might help ASX investors hunt down undervalued shares of their own? Keep reading to find out.

The Buffett advice I’d use to buy undervalued ASX shares

Warren Buffett’s approach arguably overlaps with what we call value investing. That is, buying shares for less than their true value.

ASX shares can be dubbed ‘good value’ if they’ve suffered amid an unrelated market or sector downturn. Or, perhaps, if they’ve lost popularity for reasons unrelated to their business.

However, Buffett famously doesn’t seek out cheap shares to buy. He is often quoted as saying:

It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.

That can arguably be broken down into two pieces of advice. First, that it’s important to assess a company’s quality, competitive advantages (or disadvantages), and future prospects. Next, a buyer should consider if a company’s current share price actually reflects fair value.

Generally, buying shares in a quality ASX-listed business for less than it’s ultimately worth means an investor primes themselves for potentially greater capital returns. Though, future gains are never guaranteed.

Of course, identifying value where the market has not isn’t always easy. Perhaps that’s why Buffett advises investors to know the businesses and sectors they buy into back-to-front.

Finally, don’t fret about what the market is doing. Perhaps surprisingly, Buffett doesn’t attempt to time the market.

Instead, he makes sure he is confident in a mooted investment before jumping in, no matter the broader environment.

While a downturn might induce dread or anxiety, the guru remains confident the market will return to the green, as it has historically.

No doubt, there are plenty of undervalued shares trading on the ASX as we speak.

The post I’d listen to Warren Buffett’s advice to buy undervalued ASX shares today appeared first on The Motley Fool Australia.

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• These were the worst-performing ASX 200 shares in October
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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 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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It was a month to remember for the S&P/ASX 200 Index (ASX: XJO) in October. The benchmark index charged an impressive 6% higher during the month.

Unfortunately, not all ASX 200 shares managed to climb with the market and some even recorded sizeable declines. Here’s why these were the worst performers on the index last month:

St Barbara Ltd (ASX: SBM)

The St Barbara share price was the worst performer on the ASX 200 in October with a 31.1% decline. Investors were selling this gold miner’s shares following the release of the company’s first quarter update. That update revealed weaker than expected production and higher costs, which led to St Barbara downgrading its full year production guidance and increasing its all-in sustaining cost guidance.

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price was sold off in October and dropped a sizeable 25.3%. The majority of this decline came after the semiconductor company released a quarterly update which revealed cash receipts in line with what a café would generate. Yet Brainchip had a market capitalisation of $1.5 billion at the time. No wonder short sellers are targeting the company!

Megaport Ltd (ASX: MP1)

The Megaport share price wasn’t far behind with a 21.8% decline last month. This was driven by the release of a first quarter update which was slightly below expectations on the top line. However, the real damage was done by the company’s higher capex guidance, which is impacting Megaport’s free cash flow breakeven goals.

Medibank Private Ltd (ASX: MPL)

The Medibank share price was out of form and sank 19% during the month. Investors were selling this private health insurer’s shares after the company was hit by a cyberattack. Medibank estimates that its half year earnings will be impacted by $25 million to $35 million pre-tax. However, this doesn’t include costs relating to potential remediation, regulatory, or litigation-related costs. Nor does it cover the brand damage and potential customer churn.

The post These were the worst-performing ASX 200 shares in October 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 positions in and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 Bitcoin (CRYPTO: BTC) price closed out September trading for US$18,694, give or take a few dollars depending on your time zone.

As we flipped our calendars over into November, BTC was swapping virtual wallets for US$20,548.

That puts the world’s original crypto up a healthy 9.9% in October.

For some context, the Nasdaq Composite (NASDAQ: .IXIC) finished the month up 3.9%, while here in Australia, the S&P/ASX 200 Index (ASX: XJO) gained 6.0%.

Bitcoin price gains outperform

Atop the outperformance in October, the Bitcoin price moves were less volatile than most crypto investors may have expected.

Over the month, the token traded for a low of US$18,320 and a high of US$$20,988, according to data from CoinMarketCap.

Yes, that’s a 14.5% price variance. But remember, Bitcoin gained 9.9% over this time. A rather smooth ride for the virtual asset notorious for its volatility.

And it wasn’t just Bitcoin. Most altcoins joined the rally in October.

Despite inflation remaining concerningly high, crypto investor sentiment took a turn for the bullish amid hopes that the US Federal Reserve and other global central banks might not need to raise interest rates as rapidly or as high as the markets have widely priced in.

Higher rates have thrown up some turbulent headwinds to cryptos, which have suffered sell-downs alongside other risk assets, like high-growth tech shares.

Now what?

Where the Bitcoin price heads next will, to a large extent, continue to hinge on interest rates. Particularly the policies adopted by the highly influential Fed.

Remember, Bitcoin hit all-time highs of US$$68,790 on 10 November last year, as the world approached the end of more than a decade of ever-lower rates.

But October did throw out some early signs that the Bitcoin price may be decoupling from risk assets, like tech shares.

Simon Peters, market analyst at eToro, explained that the crypto had held up well despite some disappointing earnings results from the biggest US tech companies.

That looks to be because the percentage of longer-term holders, generally less likely to sell, reached all-time highs last month.

“These high ownership levels signal why we may be seeing a decoupling between US equities and Bitcoin,” he said.

Peters added:

At the current price, it is unlikely that entities apart from Bitcoin miners would want or need to sell Bitcoin, whereas given stock market conditions and the negative forecasts from companies reporting earnings, there is perhaps a greater inclination to sell stocks.

The post The Bitcoin price leapt 10% in October. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Why one of the smartest investors bought Bitcoin and thinks you should too
• The Bitcoin price may be decoupling from US stocks. Is this why?
• Why are Bitcoin, Ethereum, and Dogecoin leaping higher today?
• The Bitcoin price just popped back above US$20,000. Is the crypto bull run back on?
• Why Ethereum, Bitcoin, and Cardano are rocketing higher today

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 positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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 Commonwealth Bank of Australia (ASX: CBA) share price performance was impressive compared to the S&P/ASX 200 Index (ASX: XJO) in October last month.

Looking at the returns, the CBA share price climbed by 15.4% compared to the ASX 200 which went up by 6%. That’s an outperformance of close to 10% in just one month.

CBA is one of the big four ASX bank shares, along with National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

The bank didn’t announce anything during the month that was deemed to be price sensitive. However, there were a couple of things that happened that investors may want to take note of.

Annual general meeting (AGM)

An AGM gives a company’s management the chance to tell shareholders about how the last year went and any commentary they want to provide about the outlook.

Investors and the market are often forward-looking. In other words, the future is more important than the past with how that affects the CBA share price.

CBA held its AGM in October.

CBA’s CEO Matt Comyn said that in this uncertain environment, it’s committed to playing its part in supporting the economy, promoting financial stability and encouraging growth. Comyn also said:

Overall, we remain fundamentally optimistic about the medium to long term opportunities for Australia, as well as our capacity to provide support in the immediate future for customers who need us.

Looking ahead, we will continue to invest in the bank’s core retail, business and institutional banking franchises, to reinforce our proposition and extend our digital leadership.

We believe that strong customer engagement and deeper relationships will continue to underpin our ongoing positive performance.

RBA taps the brakes

Before October’s meeting, the Reserve Bank of Australia (RBA) had been increasing the cash target rate by 50 basis points per month.

With how quickly the interest rate was going up, there were two thoughts.

First, the higher interest rates are expected to boost banking lending profitability. That’s because they are hiking the loan rate faster than how much more savers are getting from savings accounts. For the banks, this is good for their short-term profitability.

But, the higher interest rates could also come with a sting in the tail. At the start of the interest rate increases, it could mean that banks make more profit. But, after a while, some households may not be able to keep up with the higher payments. Those loans could go into arrears and then turn into bad debts, which would impact profit for the banks like CBA.

Getting back to the RBA. When the RBA slowed the increase to just 25 basis points (0.25%), that could suggest that the rate increases could stay slower and that the peak of the interest rate will be lower than people were initially fearing.

In other words, CBA could get the bonus of strong lending profits, but not be hit as hard with the bad debts in the future.

Time will tell how the CBA share price reacts when it tells the market in the FY23 half-year result in February 2023 about how much better its lending margins are.

The post The CBA share price soared 15% in October appeared first on The Motley Fool Australia.

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More reading

• Here’s how the NAB share price has fared in October
• Own CBA shares? Here’s why the bank wants to shake up the RBA board
• Are NAB shares the most expensive of the big four banks?
• Here’s what’s putting CBA shares in the headlines this week
• If CBA is right, ASX 200 coal shares should keep the good times rolling

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 Westpac Banking Corporation. 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 Vanguard Australian Shares Index ETF (ASX: VAS) produced a strong performance for investors in October.

Not only did the exchange-traded fund (ETF) see the unit price rise by 4.4% over the month, but it also paid out a distribution that was equivalent to a return of approximately 1.8%.

That means that, in total, it made a return of around 6.2% during October.

Considering the ETF’s total return per annum over the decade to September 2022 was 8.3%, seeing a total return of 6.2% in one month was pleasing.

What drove the Vanguard Australian Shares Index ETF return?

There are two different elements to the returns I just mentioned.

ETFs are meant to pass through the dividends they receive from the investments they hold.

Every quarter, the Vanguard Australian Shares Index ETF pays out the income it has received from the investments that it’s invested in. It is invested in companies that are in the S&P/ASX 300 Index (ASX: XKO) – it tracks this index.

The distribution for the quarter ending 30 September 2022 had an ex-entitlement date of 3 October 2022 and a payable date of 18 October 2022. The ETF paid a distribution of $1.45 per unit.

But, the larger part of the return came from capital growth. The ETF’s capital growth comes from the capital movements from the underlying holdings.

The bigger the business holding in the ETF’s portfolio, the more of an effect it has on the overall return.

For example, names like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Limited (ASX: CSL) and National Australia Bank Ltd (ASX: NAB) have the biggest weightings and have the biggest impact. The other big ASX bank shares are also sizeable positions.

So, let’s look at those share price movements.

In October, the BHP share price fell 3%.

The CBA share price went up 15.4%.

CSL shares declined 1.6%.

The NAB share price went up 12.5%.

The Westpac Banking Corp (ASX: WBC) share price rose 16.8%.

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price grew by 12%.

Why did banks do so well?

During the month, ANZ reported its FY22 result, which demonstrated how much more lending profit it could make now that interest rates are higher. This logic of higher lending earnings could also be applied to other banks.

I also wrote about one of the main things that could have been a boost for banks. I suggested the smaller-than-expected interest rate rise from the Reserve Bank of Australia (RBA) in October could mean bank books may not be hurt as much as previously expected, putting less pressure on borrowers.

The post Why did the Vanguard Australian Shares Index ETF perform strongly in October? appeared first on The Motley Fool Australia.

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More reading

• 2 excellent ETFs for ASX investors in November
• Here’s how the Vanguard Australian Shares ETF (VAS) stacks up against the BetaShares Australia 200 ETF (A200)
• 5 things I look at when buying an ASX ETF
• Is the Vanguard Australian Shares (VAS) ETF the most popular ETF to buy?
• These could be the ETFs to buy for big dividends

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 positions in and has recommended CSL Ltd. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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