The NASDAQ-100 Index (NASDAQ: NDX) and ASX tech shares had a really good performance in January 2023, after what was a really difficult 2022.

Over the last month, the NASDAQ-100 went up by 10.6%.

In January 2023, we saw the Xero Limited (ASX: XRO) share price climb by more than 9%.

The REA Group Limited (ASX: REA) share price went up by over 13%.

The Seek Ltd (ASX: SEK) share price rose by more than 15%.

The Carsales.com Ltd (ASX: CAR) share price climbed over 9%.

The WiseTech Global Ltd (ASX: WTC) share price rose 19%.

The Altium Limited (ASX: ALU) share price went up 10%.

Looking at the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC), an exchange-traded fund (ETF) that's invested in 46 ASX tech shares, saw a rise of over 9% in the month.

Why are ASX tech shares doing so well?

Technology businesses were one of the hardest hit in 2022 as interest rates zoomed higher.

But, there are signs that inflation may have peaked and could now be reducing.

For example, in the US in the three months to December 2021, the Employment Cost Index rose by 15%, which was less than the 1.1% expected number and a slowdown from the 1.2% in the prior three months, according to reporting by the Australian Financial Review.

The AFR quoted National Australia Bank Ltd (ASX: NAB) head of fixed income research, Skye Masters, who said:

The clear point from this data is it's showing that wages growth in the US is easing.

So, it does alleviate that concern that some Fed members might have had that maybe we're entering into a wage price spiral, so it's supportive of the view that the Fed can dial back its pace of tightening and possibly pause.

The AFR also reported on comments from Matt Wacher, chief investment officer at Morningstar for the Asia Pacific, who said that while the Reserve Bank of Australia (RBA) could increase the cash rate one or two more times, there could then be a cut later this year. Wacher commented:

I am sure the RBA would like to keep rates higher for longer, but this can put significant pressure on the economy here, more so than other regions given personal debt levels.

On the ASX tech share space, he said that the shares are "not cheap, even though they had fallen sharply, and are priced to perfection", according to the newspaper.

My take

I don't think the US Federal Reserve is going to make things easy for the share market.

Jerome Powell has promised to fight inflation "until the job is done". I think that means that interest rates are going to stay high for longer than some investors are expecting. This is what he said a few months ago:

But, with many valuations still a long way below their 2021 levels, I think a number of ASX tech shares, like Xero, seem very promising for the long term even if they have risen a bit higher than a month ago.

Keep this in mind: it may not really matter what happens in February 2023 if the investment horizon is five years or more ahead with an ASX (tech) share.

The post The Nasdaq just had its best January in over 20 years. Are ASX tech shares back? appeared first on The Motley Fool Australia.

The financial year that just ended on 30 June was a tough one for ASX shares. Over FY 2022, the S&P/ASX 200 Index (ASX: XJO) lost 10.19%. So it goes without saying that any ASX exchange-traded fund (ETF) that tracks the ASX 200 gave investors a similar loss.

But were there any ETFs that did even worse? Let's check out the five worst-performing funds of the year.

The 5 worst-performing ASX ETFs of FY 2022

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

Our first laggard is this tech-focused fund from provider BetaShares. ATEC tracks one of the newer ASX indexes in the S&P/ASX All Technology Index (ASX: XTX). It holds many of the ASX's largest tech shares, including Xero Limited (ASX: XRO) and Carsales.com Ltd (ASX: CAR).

Unfortunately, ASX tech shares were some of the hardest-hit companies last financial year, as we can see this in this fund's performance. Over FY 2022, ATEC units lost 35.7% of their value.

BetaShares Cloud Computing ETF (ASX: CLDD)

Another BetaShares ETF, CLDD has only been around since February 2021. But it has certainly had a rough time over its short life. As the name implies, this fund focuses on global companies that operate in the cloud computing arena.

You might know some of its larger holdings such as Zoom Video Communications and Netflix. But having such a potent exposure to tech has also hampered CLDD, with this fund losing 35.79% over FY 2022.

BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

Tech is certainly featuring prominently in this list. RBTZ is such an ETF, and one that concentrates on robotics and artificial intelligence companies from around the world. It includes companies such as NVIDIA and Yaskawa Electric Corp. RBTZ took a beating over FY 2022, losing 36.01% for its investors.

ETFS S&P Biotech ETF (ASX: CURE)

A tech ETF of a different kind, this fund from provider ETFS focuses on US biotechnology companies. You'll find COVID-19 vaccine provider Novavax here, as well as Twist Bioscience and Arrowhead Pharmaceuticals. But CURE investors were left wanting in FY 2022, with this fund going backwards by 40.51%.

ETFS Ultra Long NASDAQ 100 Hedge Fund (ASX: LNAS)

Our final and worst-performing ETF of FY 2022 is an index fund of sorts. LNAS tracks the US NASDAQ-100 (INDEXNASDAQ: NDX), giving investors exposure to 100 of the largest companies on the NASDAQ exchange.

However, LNAS is also leverage, meaning it is designed to amplify the gains or losses of the index it tracks. Sadly for investors, FY 2022 was a negative one for the NASDAQ. And due to LNAS's leveraged nature, investors suffered a 49.99% loss as a result.

The post Here are the worst-performing ASX ETFs of FY 2022 appeared first on The Motley Fool Australia.

I believe that exchange-traded funds (ETFs) can be a very effective way to invest in ASX shares and global shares. After the recent volatility, I think there are some opportunities.

In theory, higher interest rates do act as a headwind for asset prices.

However, with some ETFs noticeably down, I think it's worth noting that the underlying businesses in those ETFs are still operating, generating revenue, and aiming to grow for the long term.

The lower prices we're now seeing with some of these businesses and ETFs look like opportunities to me. That's why I think these two investments are attractive:

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This ETF aims to give investors access to a portfolio of large businesses across the world that are "climate leaders", according to BetaShares, which have passed screens that exclude businesses with significant exposure to fossil fuels or are "engaged in activities deemed inconsistent with responsible investment considerations".

Some of the screens include avoiding businesses that are significantly engaged in weapons, gambling, alcohol, junk food, and more. The ETF also isn't invested in businesses that have human rights or supply chain concerns, as well as ones that lack gender diversity.

The ETF owns 200 of the largest global businesses that pass all those screens. These are some of the companies in the portfolio, which each have a weighting of at least 2%: Nvidia, Apple, Visa, Home Depot, Mastercard, Toyota, UnitedHealth, ASML, Adobe, and Cisco Systems.

I think this ETF's net returns have shown that 'ethical' businesses can perform just as well, if not better, as ones that don't pass the ethical screens. Keeping in mind that past performance is not a guarantee of future performance, in the five years to April 2022 the ETF has returned an average of around 17% per annum.

In my opinion, this ETF can provide exposure to quality businesses that can perform well and also act ethically. It looks more attractively valued after a 20% fall in 2022.

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

This ETF is invested in the ASX tech share space. The S&P/ASX 200 Index (ASX: XJO) is heavily focused on financial and resource names. But, technology can be a sector that generates more revenue growth than others.

I think that the tech sector looks much better value after the heavy falls in 2022. The ATEC ETF has dropped 30% in 2022 at the time of writing.

There are currently 72 names in the ETF's portfolio, with many of the biggest names being highly profitable.

These are the biggest 10 positions: Computershare Limited (ASX: CPU), Xero Limited (ASX: XRO), Seek Limited (ASX: SEK), Block Inc (ASX: SQ2), WiseTech Global Ltd (ASX: WTC), REA Group Limited (ASX: REA), Carsales.com Ltd (ASX: CAR), Nextdc Ltd (ASX: NXT), Altium Limited (ASX: ALU), and TechnologyOne Ltd (ASX: TNE).

While I wouldn't necessarily buy every ASX tech share in the ATEC ETF portfolio for my own portfolio, I think the much lower price means the ETF is noticeably more attractive considering the structural shift towards technology over the long term.

The post 2 great ETFs I'd buy for my portfolio appeared first on The Motley Fool Australia.

The Smartpay Holdings Ltd (ASX: SMP) share price is not having a great day today. At the time of writing, Smartpay shares are down 1.14% to 87 cents a share.

On the surface, that move doesn't look great for Smartpay shares. But if we zoom out, the picture gets a whole lot rosier. Smartpay shares are still up almost 30% year to date. They are also up more than 97% over the past 12 months. And with a 52-week range of 28-98 cents per share, Smartpay is definitely still in the upper echelons of this range. 

So what has gone so well for this payments company over the past 3-and-a-half months?

Smartpay share price pays off

Well, there hasn't been too much to talk about with Smartpay in recent months. We haven't had any meaningful announcements of consequence for the company since 12 March. And that was a notice from S&P Global that Smartpay would be joining the S&P/ASX All Technology Index (ASX: XTX), effective 22 March. This does have the potential to be a growth catalyst for the Smartpay share price, seeing as ASX tech shares are an area that is attracting more and more attention these days. The ASX exchange-traded fund (ETF) that tracks the XTX Index – the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) – is an increasingly popular ETF that now has more than $200 million in net assets. It has also appreciated more than 83% over the past 12 months, which doesn't hurt either.

Remember, part of every dollar that gets invested with this ETF goes into Smartpay shares. So that's certainly a tailwind for the Smartpay share price.

But we could still be seeing the aftershocks of a very well-received quarterly trading update that the company released back in January. As we reported at the time, this trading update saw the Smartpay share price reach its current 52-week (and all-time) high soon after. 

And for good reason. The update told investors that revenues were up 18% quarter-on-quarter and 24% over the prior corresponding quarter to NZ$9.2 million. Perhaps most impressively, Australian revenues grew 35% over the previous quarter's numbers, and 75% against the prior corresponding quarter. 

Those are objectively strong numbers and have almost certainly done the lion's share of the legwork when it comes to the Smartpay shares' 2021 performance thus far. 

Those factors are likely to be behind the Smartpay share price's 28% gain in 2021 so far. At the current share price, Smartpay has a market capitalisation of $204.25 million.

The post Why the Smartpay (ASX:SMP) share price is up 30% in 2021 appeared first on The Motley Fool Australia.

Australian exchange-traded funds (ETFs) that invest in Asian companies went gangbusters in October.

Local ETFs were on fire last month, breaking the industry's all-time record for incoming money and reaching a historic-high for total funds held.

But popularity doesn't equate to performance, so it's interesting to see which products fared the best for its investors.

The latest Betashares report showed 3 of the top 5 performing funds in October were Asia-themed.

5 best-performing Australian ETF in October 2020 

Betashares Asia Technology Tigers ETF (ASX: ASIA) rose 8.3% for the month, on the back of a calmer COVID-19 environment compared to the western world.

The fund has gained 67% for the 12 months ending 31 October, according to Betashares head of strategy Ilan Israelstam.

"During the pandemic, Asian technology stocks have benefited both from the strong showing of Asian stocks in general, and from the outperformance of the technology sector," he said.

"Asian economies have demonstrated a greater ability to gain control of COVID-19 outbreaks than their American and European counterparts, while technology stocks have been the leading performers around the world as the world increasingly went online as the virus took hold."

Australian investors are buying even more Chinese stocks this month as a new US president is poised to reset a now-toxic trade relationship.

The Australian ETF industry generally had an excellent October, adding $2.3 billion of funds. This is the highest-ever monthly inflow.

Vanguard and Betashares are dominant among the suppliers, each racking up more than $4 billion of investor money this year.

The post Best performing Aussie ETFs right now appeared first on The Motley Fool Australia.

Uncertainty is the name of the game as the outcome of the US presidential election remains up in the air. And the world is unlikely to know who will walk away with the keys to the White House anytime soon.

With Joe Biden potentially edging towards victory, Donald Trump's team has already filed lawsuits in 2 critical US states – Pennsylvania and Michigan – to contest the late vote counting. Trump also wants a recount in Wisconsin, which Biden narrowly won.

And speaking from the White House, Trump said, "Frankly we did win this election…. We will be going to the US Supreme Court. We want all voting to stop."

Isn't this the worst possible outcome for share prices?

A contested election was meant to be the worst possible outcome for global share prices. Yet all the major US and European indexes closed strongly in the green.

Tech shares led the charge higher. The tech-heavy NASDAQ 100 Index (NASDAQ: NDX) closed up 4.4%. It's now down just 5.2% from its 2 September all-time highs.

It's a similar story here in Australia, with the S&P/ASX 200 Index (INDEXASX: XJO) up 1.19% at the time of writing. It's now up more than 3% since Friday's closing bell.

As in overseas markets, ASX tech shares are handily outperforming.

The S&P ASX All Technology Index (ASX: XTX), which contains 50 of Australia's leading and emerging technology companies, is up 2.0% at time of writing and 6.0% since the end of Friday's trading.

Not surprisingly, then, the share price of BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) is also gaining strongly. The exchange-traded fund (ETF) aims to track the performance of the All Tech index. The ATEC share price is up 2.1% today, and 6.7% since Friday.

What's going on with the markets, and what can we expect?

If the polls were to be believed – they're not – then Joe Biden and the Democrats would have swept into the White House and ruled both houses of Congress in the so-called 'blue wave'.

That would likely have meant an increase in capital gains taxes and a repeal of Trump's corporate tax cuts, while the Democrat's much larger stimulus package would likely get the green light.

Now it looks like the Republicans will hold onto the Senate while the presidential winner remains in doubt.

To get a better idea of why this is seeing shares rallying, and tech shares in particular, we turn to some of the market experts.

Alicia Levine is the chief strategist at BNY Mellon Investment Management. She noted (as quoted by Bloomberg):

Part of what is going on is tech is rallying strongly, which is pushing the market up, and the reason tech is rallying is because it sold off, it was uniquely exposed to higher yields, higher taxes. That created a viscous reversion trade into cyclicals with the expectation yields were moving up with the prospect of further stimulus.

Matt Maley, chief market strategist at Miller Tabak + Co agrees that investors in tech shares are breathing a sigh of relief on the tax front (quoted by Bloomberg):

People said back in March and April that tech is a safe play. This sentiment is now returning – big time. If a capital gains tax isn't going to be increased, all those investors waiting to take chips off table in their tech positions are now saying, 'You know what, I'll hold on.'

Where to next for share prices?

With share markets already having posted big gains over the past days, has the train left the station?

Hardly, says LPL Financial's Ryan Detrick (quoted by the Australian Financial Review):

We don't know who will be the next president as of Wednesday morning, but we do know that stocks tend to do well the final two months of an election year, in particular November. Of course, 2020 isn't like any other year, and we still could be a ways away from who the winner will be.

One of the big takeaways so far from Tuesday night is that the Senate likely will stay Republican, meaning we may have a divided Congress. The chances of higher taxes and more regulation likely took a hit under this scenario.

This could be a nice tailwind for stocks, as the S&P 500 historically has done quite well under a divided Congress, up more than 17 per cent on average. Additionally, in years with a divided Congress, stocks have been higher the past 10 times, with 2020 potentially being the 11th in a row.

Evercore ISI's Dennis DeBusschere is also bullish on the closely contested outcome of the election, writing in a note to clients (from Bloomberg):

With the chances of a significant increase in tax rates and headwinds to cash return largely off the table, the S&P has about 13% upside from yesterday's close. Either a narrow Biden victory or Trump's re-election would push that slightly higher.

Whether or not DeBusschere and Detrick are proven correct, we may have to rethink the old adage that share markets hate nothing more than uncertainty.

If you're still sceptical, just have a look at the Afterpay Ltd (ASX: APT) share price. Shares in the buy now, pay later giant are up 3.03% so far today, and more than 7% higher since Friday's close.

At the current price of $103.80, the Afterpay share price is once again at a new record high.

The post Why share markets are shrugging off this uncertainty, and what to expect next appeared first on The Motley Fool Australia.

Last week was one most global share markets will gladly put behind them.

Soaring COVID infections across the United States and Europe coupled with uncertainties in the US election outcome saw many investors hit the sell button.

The S&P 500 Index (INDEXSP: .INX) lost 5.6% over the 5 trading days. And tech shares, many of which quickly rebounded from the March lows to hit new all-time highs, weren't spared. The tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) shed 5.5%.

All up, it was the worst week for US shares since the heavy selling abated in late March.

European share prices were hammered too, as nation after nation – including France, Germany, and the United Kingdom – moved to implement strict lockdown measures that may last through Christmas. Germany's DAX PERFORMANCE-INDEX (INDEXDB: DAX) dropped 8.6% over the week.

By comparison Australian shares did relatively well, though the S&P/ASX 200 Index (ASX: XJO) hardly emerged unscathed, finishing the week down 3.9%.

ASX tech shares weren't spared either. The BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) – an exchange traded fund holding some of Australia's largest and most innovative tech companies – fell 4.3%.

ATEC is falling again today, down 1.5% in afternoon trading, while the ASX 200 has reversed its early morning losses and is up 0.4%.

All this points to another volatile period ahead in a week that brings us the US Congressional and Presidential election, the Reserve Bank of Australia's next rate cut and quantitative easing (QE) decision, and more news – good or bad – on the coronavirus pandemic.

With many investors on edge this week, let's have a look at some of the leading market experts' views on what they expect.

Will the US enter economy crimping lockdowns like Europe?

Under the leadership of Donald Trump, the US has so far opted not to order lockdowns on a national level. But Joe Biden, should he get the keys to the White House, may steer a different course.

Addressing that uncertainty, Matt Sherwood, Perpetual's head of investment strategy, is quoted by the Australian Financial Review (AFR) as saying:

Everyone's questioning whether Europe is a canary in the coal mine for what's ahead for the United States. We have seen big lockdowns in the UK, in Germany, in France, in Spain, but also in smaller economies like Austria, Greece and Portugal. And now people are looking to the other side of the [Atlantic] and saying, 'OK, what's going to happen with the Americans?' …

If Biden and the Democrats do get a clean sweep, they will have a higher tendency to close the economy down, so all of a sudden the markets' assumptions about their recovery, about growth, will be thrown into question.

If the world's biggest economy raises taxes, what happens to ASX share prices?

It's not just how a new administration in the US may deal differently with the pandemic.

There are a range of potential changes coming to US corporate, private, and capital gains taxes that could impact the share prices of many ASX shares.

Biden has previously indicated the Democrats would move to increase the long-term capital gains tax for people making more than US$1 million (AU$1.4 million). And they're likely to increase the corporate tax rate – slashed by Trump early in his presidency – to 28% from the current 21%.

That could have a big impact on Australia's US investments. Even if you haven't bought any shares yourself, your super fund most likely has. According to the United States Studies Centre, about 20% of Australia's total superannuation investments (more than $500 billion) are invested in the US.

Betsy-Ann Howe is an international tax partner at K&L Gates, the top US law firm in Australia. Commenting on a Biden victory, Howe says (as quoted by the AFR):

For Australian investors, the main areas of concern will be the increase in tax rates for corporates and individuals and some of the changes to business taxes. Biden's plan does refer to "eliminating certain real estate tax provisions", which suggests that changes are likely. This may include the ability to offset income with active losses from real estate activity.

Given the myriad of considerations necessary for Australians making such investments – whether individuals, companies, superannuation funds or privately managed funds – and the substantial Australian investment in US real estate – whether residential build-to-rent, infrastructure or commercial – this will be an area of continual scrutiny for Australian investors.

This will have a significant impact on decisions relating to cross-border investment from Australia into the US.

Not everyone believes higher US taxes would be detrimental for Australia's markets or economy. AMP Capital chief economist Shane Oliver, for example, said:

[Mr Biden] would probably be the best outcome for Australian shares and the Australian dollar as Australia would benefit from more US stimulus. Our companies would be relatively more attractive with a higher tax rate in the US and we would likely see less tensions with China.

Then there's Fundstrat Global's Tom Lee. As quoted by the AFR, Lee is bullish on share markets, even in the case of a contested election:

If this happened, we believe the Fed would intervene. In other scenarios, we see fiscal stimulus moving forward with the same Fed backstop. So, the odds heavily favour a rally post-election. In short, while people are sitting on the sidelines into election day, we see a rally taking root thereafter.                                    

Two ASX 200 shares that have a significant exposure to US markets are property and infrastructure group Lendlease Group (ASX: LLC) and cement building products supplier James Hardie Industries plc (ASX: JHX).

Year-to-date the Lendlease share price remains down 31%. James Hardie's share price has regained all its COVID-driven selling and is up 26% so far in 2020.

As for the RBA?

Of all the uncertainties facing ASX investors this week, the RBA's decision tomorrow on an interest rate cut comes in near the bottom, with almost unanimous consensus among analysts that a final small cut is coming. The only question remains the size of its QE program.

According to Perpetual's Matt Sherwood:

The RBA has done everything they can bar place ads in the paper that the cash rate is going to be lowered on Tuesday, so that won't surprise the market. If the RBA delivers an asset purchase program above expectations, then Australia would outperform during what is going to be probably a pretty volatile period to the end of the year.

There you have it.

If you started this week feeling a bit uncertain about the short-term direction of your shareholdings, you're not alone.

But regardless of who wins the US election, the longer-term outlook for Australia – which recorded another day with zero new coronavirus community infections – and ASX share prices remains strong, in my view.

The post Elections, pandemics and rate cuts. Where to next for ASX share prices? appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) has slipped lower in morning trade, down 0.05% at the time of writing.

This morning's retrace came following a strong performance last week, which saw the ASX 200 finish the five days up 5.4%.

It also came despite most major European indexes gaining on Friday, alongside every United States index finishing well into the green. Technology shares again led the way, with the tech-heavy Nasdaq Composite (NASDAQ: .IXIC) gaining 1.4%.

Though still down 4% from its 2 September all-time highs, the Nasdaq is up 27% so far in 2020. That compares to a gain of 7% on the S&P 500 Index (SP: .INX) and an 8.8% loss from the ASX 200.

Tech shares still shining

Technology shares, as you likely know, were already outperforming heading into the pandemic. And since the lockdowns and social distancing began, they've really grabbed investor interest amid growing demand for tech gadgets and services from a nation now working, shopping and socialising from home.

That's seen ASX tech shares enjoy similarly strong gains to US listed technology companies. Unfortunately, it's difficult to give you a simple like-for-like comparison for the full year without crunching 50 plus company share price movements myself. That's because the S&P/ASX All Technology Index (ASX: XTX) – which tracks 50 of Australia's leading and emerging technology shares – didn't launch until 24 February this year.

I can tell you that the All Tech Index is up nearly 29% since then. And that it's up 1.5% in intraday trading today, while the broader index is flat.

Which leaves us with two takeaways.

First, the bull run in technology shares appears far from over. Meaning if you don't already own some quality ASX tech shares, or want to add to your holdings, I believe that window is still open. If you want to own some of Australia's biggest tech companies with a single investment, you can look into the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC). The share price of the exchange-traded fund (ETF) is up 41% since its inception on 4 March.

The second takeaway is that all shares in every market are, at times, volatile. Share prices can swing from losses to gains and back again in a single day. Over the long haul, though, share prices of quality companies tend to only head in one direction. Higher.

Which, belatedly, brings us to Dr Takao Inui.

Why ASX investors need a 'bulbous bow'

As far as I know, Takao Inui never invested in any Australian shares.

What he did do was develop the modern bulbous bow still used in many large ships today.

Building on research from other scientists, Inui's work at the University of Tokyo in the 1950s and 1960s led to his discovery that ships with the right type of bulbous bow had less drag in the water along with greater stability. Meaning they can ride through the peaks and troughs in rough seas with far less discomfort for their passengers.

That's incredibly useful for ships ploughing ahead through big swells. Rather than plunging up and down, the captain can keep a steady eye on the horizon.

And it's this same horizon that long-term investors should keep in mind rather than bemoaning any short-term losses or even celebrating any short-term gains.

This 'buy-to-hold' investment philosophy is the same one employed by The Motley Fool's own Scott Phillips and his lead analyst Andrew Legget in their investment service, Share Advisor. A philosophy that's seen Scott outperform the benchmark with his ASX recommendations by more than 25% since 2011.

Here's what Andrew wrote to members of Share Advisor last week:

Volatility is not risk, it is not something to be avoided or feared, it is just the price of admission into the lucrative world of investing on the share market. If you want impressive returns, you have to become comfortable with holding great companies during tough periods.

Avoid the desire to get in and out of investments because some 'bad news' arrives. In fact, if you continue to like the company and believe it has a strong long-term future, these are more often than not buying opportunities, rather than reasons to get out.

Over the short term, markets will fluctuate, sometimes for no reason at all. Your patience and nerves will be tested, sometimes for no reason at all. But if you stay the course over the long-term, the share price will match the performance of the business. Don't believe us, just pull up the long-term chart of your favourite company and see for yourself.

That's great advice from the team at Share Advisor. I especially like the last line. It's real 'bulbous bow' thinking.

The post The valuable lesson Dr Takao Inui has for every ASX investor appeared first on The Motley Fool Australia.

Yesterday, overnight Aussie time, the United States Federal Open Market Committee locked in investors' long-term relationship with TINA.

If you're not familiar with the acronym, it stands for 'there is no alternative'. Meaning with interest rates effectively zero, investors seeking returns have little choice but to invest in shares.

The Fed said it "expects to maintain an accommodative stance of monetary policy" until the US reaches established inflation levels of 2% and maximum employment. This likely means near zero rates until at least 2023. And where the Fed leads, most other major central banks across the world will follow.

The reaction in US markets was mixed, with the Dow Jones Industrial Average Index (DJX: .DJI) edging higher while the Nasdaq Composite (NASDAQ: .IXIC) lost 1.3%. But the mid and longer-term implications of years of record low rates and trillions of dollars more in quantitative easing (QE) from the US Fed and other central banks signal strong tailwinds for share prices.

But haven't share markets been selling off?

With that said, share markets never march higher in a straight line. After racing up at record paces since the mid-March troughs, US and Aussie markets have given back some of those share price gains in recent weeks as investors take the opportunity to pocket some profits.

That's seen the S&P 500 Index (SP: .INX) fall 5.5% from its 2 September all-time highs.

The S&P/ASX 200 Index (ASX: XJO), still nearly 18% below its own all-time highs set in February, is down more than 4.0% since 19 August.

Now it's certainly possible share prices could fall further from here in the short term. In fact, strategists at JPMorgan Chase & Co. point out that a pending US$200 billion (AU$270 billion) share sale by pension and sovereign wealth funds could drag shares lower.

However, as Bloomberg reports, JP Morgan's strategists remain optimistic, believing any short-term retracements present buying opportunities:

For the medium to long term, we still see plenty of upside given still low overall equity positioning. A retreat in equity and risk markets over the coming weeks would likely represent a buying opportunity.

Strategists at Goldman Sachs concur, forecasting that the recent pullback in share prices is near its end.

Goldman's strategists wrote (as quoted by Bloomberg):

Despite the sharp sell-off in the past week, we remain optimistic about the path of the U.S. equity market in coming months. Since the financial crisis, the typical S&P 500 pullback of 5% or more has lasted for 20 trading days and extended by 7% from peak to trough, matching the magnitude of the most recent pullback if not the speed.

But with technology shares having led the rally higher, and currently leading the markets lower, are the tech share price gains over?

The strong get stronger

If you've even glanced at the financial news in the past months, you'll know technology shares have been rocketing higher at a blistering pace. And that they've been giving some of those gains back in the past weeks.

The tech-heavy Nasdaq is down 8.3% since 2 September, more than twice as much as the Dow Jones. And the S&P/ASX All Technology Index (ASX: XTX) — which tracks 50 of Australia's leading and emerging technology companies — is down 8.4% since 25 August.

While no one likes to catch a falling knife, Hyperion Asset Management Chairman, Tim Samway, remains highly bullish on the big tech shares.

As the Australian Financial Review reports, Samway says record low interest rates have hidden the impact of slow global growth on many other businesses since the GFC. "You have 10 years post the GFC where average businesses have struggled. The bad news is there is no joy in sight for those businesses.'

However, Samway adds:

Modern information driven businesses not reliant on GDP growth are either expanding their addressable markets, taking market share or doing both. The strongest platforms with global scale win most customers and disrupt the old world regional competitors. The strong get stronger in an internet enabled globalised world.

One of the tech shares Samway is bullish on is Amazon.com, Inc. (NASDAQ: AMZN).

The Amazon share price is up 64% so far in 2020, but he believes it could far higher, pointing out the e-commerce in China accounts for more than twice the market share it does in the United States. "You can draw your own conclusion about how far Amazon's market share could rise from here. The number is substantial."

3 ASX shares to ride the technology wave

If you're looking for exposure to the biggest US technology shares, the Betashares Nasdaq 100 ETF (ASX: NDQ) holds the largest non-financial 100 companies listed on the Nasdaq. I won't run through its holdings, but the top 10 are all household names. The ETF is down 9% since 3 September. Year to date, the NDQ share price is up 20%.

Of course, there are some great tech shares trading on the ASX as well. One way to get exposure to some of Australia's largest and most innovative tech companies with a single investment is through the Betashares S&P/ASX Australian Technology ETF (ASX: ATEC).

ATEC only began trading on the ASX on 4 March and by 23 March, the share price was down 34%. Ouch!

But investors who held on were amply rewarded. The share price then leapt 109% to its record high on 25 August. Since 25 August, the ATEC share price is down 8%.

Finally, if you're looking to invest in a single share, and not a whole basket, there's online retail darling Kogan.com Ltd (ASX: KGN). The Kogan share price hit an all-time high on 18 August, up 208% in 2020. Since that high, the share price is down 10%.

But the Motley Fool's own Scott Phillips isn't dissuaded by these short-term pullbacks.

Scott first recommended Kogan in his investment advisory service, Share Advisor, on 28 September 2017. Members who followed Scott's advice and held onto their shares are currently sitting on gains of 434%.

And, in case you're wondering, Scott still has a buy recommendation on Kogan shares.

The post 3 ASX shares to buy before this window of opportunity closes appeared first on The Motley Fool Australia.

I think exchange traded funds (ETFs) can be great additions to a balanced portfolio.

This is because they allow you to invest across a large and diverse number of shares through just a single investment.

But which ETFs should you buy today? Three of the best ETFs in my opinion are listed below. Here's why I would buy them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

My favourite ETF is the BetaShares NASDAQ 100 ETF. This ETF gives investors access to 100 of the biggest non-financial companies on the legendary Nasdaq index. These means investors will be getting a slice of a large number of tech giants such as Apple, Microsoft, and Netflix. Due to the positive outlooks of the majority of the companies in the ETF, I believe it can generate strong returns for investors over the next decade. Another positive is a recent pullback following a tech selloff on Wall Street. This gives investors an opportunity to buy in at a more attractive price.

BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

Another option for investors to consider buying is the BetaShares S&P/ASX Australian Technology ETF. It is the Australian equivalent of the BetaShares NASDAQ 100 ETF and a great option if you don't already have exposure to the tech sector. Included in the fund are the likes of Afterpay Ltd (ASX: APT), Appen Ltd (ASX: APX), and Xero Limited (ASX: XRO). I believe this ETF has the potential to outperform the broader ASX 200 index by a decent margin over the long term.

iShares Global Healthcare ETF (ASX: IXJ)

A final option to consider is the iShares Global Healthcare ETF. This exchange traded fund gives investors a piece of some of the largest healthcare companies across the world. This includes giants such as CSL Ltd (ASX: CSL), Johnson & Johnson, Novartis, and Pfizer. Given the expected increase in demand for healthcare services over the next few decades, I believe it is a great place to invest with a long term view.

The post Buy BetaShares NASDAQ 100 ETF (ASX:NDQ) and these outstanding ETFs today appeared first on The Motley Fool Australia.

When it comes to investing in exchange-traded funds (ETFs), I think some of the best options out there are growth ETFs. ETFs have a reputation for being 'passive' investments best suited to investors who want to put them in the bottom drawer and never look at them again. Whilst that's true for index funds like the iShares Core S&P/ASX 200 ETF (ASX: IOZ), not all ETFs should be tarred with this brush. So here are 3 high-growth ETFs that I think all growth investors should be looking at investing in today.

3 high-growth ETFs

1) BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

This is a relatively new ETF, having only started out back in March of this year. However, since then ATEC has been on an absolute tear, rising more than 40% since its inception (and that includes through the March crash). I like ATEC as it's one of the only ASX ETFs purely dedicated to tracking ASX tech companies. You'll find the popular buy now, pay later share Afterpay Ltd (ASX: APT) and online furniture hawker Temple & Webster Group Ltd (ASX: TPW) here, as well as other WAAAX shares like Xero Limited (ASX: XRO) and Appen Ltd (ASX: APX). If you're bullish on the ASX tech sector, I think this ETF is a great candidate for your portfolio today.

2) ETFS FANG+ ETF (ASX: FANG)

This ETF is also a relatively new addition to the ASX, having started life in February of this year. FANG invests in the shares held in the NYSE FANG+ Index. This includes the eponymous FAANG stocks of Facebook Inc (NASDAQ: FB), Apple Inc. (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Netflix Inc (NASDAQ: NFLX) and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL). It also includes a few more tech high flyers such as Microsoft Corporation (NASDAQ: MSFT), Tesla Inc (NASDAQ: TSLA), Alibaba Group (NYSE: BABA), NVIDIA Corporation (NASDAQ: NVDA), Baidu Inc (NASDAQ: BIDU) and Twitter Inc (NYSE: TWTR).

Having only these 10 holdings makes FANG a highly concentrated investment, but with its growth titan holdings, investors might not mind too much. FANG has also had a stellar start to life, delivering a return of 45.91% since its inception. If you don't have as many of these companies in your portfolio as you might otherwise like to, I think FANG is a perfect choice for a growth-orientated portfolio today.

3) Betashares Global Cybersecurity ETF (ASX: HACK)

Our final high-growth ETF is another fund from BetaShares, this time specialising only in companies within the cybersecurity space. With the increasing importance of the digital world to corporations and governments globally, I see a bright future for this sector. And this ETF gives us an easy ticket in.

HACK holds a basket of 43 shares from around the world, with its top holdings including Crowdstrike Holdings Inc (NASDAQ: CRWD), Broadcom Inc (NASDAQ: AVGO), Okta Inc (NASDAQ: OKTA) and Splunk Inc (NASDAQ: SPLK). HACK has been around a little longer than ATEC or FANG and has returned an average of 22.6% per annum over the past 3 years. Not a bad return!

The post 3 ASX high-growth ETFs growth investors can't ignore appeared first on The Motley Fool Australia.

The ASX's newest index, the S&P/ASX All Technology Index (INDEXASX: XTX) is capping off an inaugural 6 months for the ages. Since it first listed back in February, the value of this index has climbed from approximately 1,800 points on listing to 2,340 today. Mind you, that period includes the majority of the March share market crash that hit the ASX earlier in the year.

Designed to give a more direct exposure to the tech shares on the ASX over the previously-used S&P/ASX 200 Information Technology Index (INDEXASX: XIJ), the All Technology Index has been buoyed by the massive outperformance of its top shares like Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) over the past few months.

But according to reporting in today's Australian Financial Review (AFR), this index is about to get another boost. Today heralds this index's quarterly rebalancing (a process that all indices undergo periodically). And according to the AFR, the XTX is about to get 8 new members. This process will swell the index to a total market capitalisation of more than $143 billion, up from $110 billion at the last rebalancing.

None of the index's current top 10 holdings are set to change. These include Afterpay as well as Xero, Seek Limited (ASX: SEK), Computershare Limited (ASX: CPU) and REA Group Limited (ASX: REA).

Joining the index will be Dicker Data Ltd (ASX: DDR), Brainchip Holdings Ltd (ASX: BRN), Envirosuit Ltd (ASX: EVS), Mach7 Technologies Ltd (ASX: M7T), Novonix Ltd (ASX: NVX), Splitit Ltd (ASX: SPT), Sezzle Inc (ASX: SZL) and Whispir Ltd (ASX: WSP).

Is ASX tech a buy today?

Since the XTX is an index, you can't buy shares in it directly. But luckily, you can buy shares in an exchange-traded fund (ETF) that tracks this index. The BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) does just that, holding all 50 companies (soon to be 58). Thus, if you are interested in getting a slice of the action from the ASX tech space, this ETF is a great place to start.

I do think the 'tech sector' has run a bit in recent months, especially since ATEC units have appreciated 27.7% since first listing back in March. But I'm also bullish on the Aussie tech sector in general, and so I think this ETF would make a great long-term investment, especially for a passive investor. As the index rebalances, it prunes out the losers and adds to the winners, which I think is a great advantage for the tech space in particular. ATEC does charge a management fee of 0.48% per annum, something to keep in mind.

The post ASX All Technology Index swells with new additions appeared first on The Motley Fool Australia.

It's happened!

The Xero Limited (ASX: XRO) share price this week burst through the $100 per share mark, closing Wednesday at $100.02 per share. It is a big milestone for the New Zealand tech company with a share price rise of 25% so far in 2020. At the time of writing, the Xero share price is trading at $102.

Let's put the Xero share price rise into perspective

To put Xero's share price rise into perspective, the S&P/ASX All Technology Index (ASX: XTX), which includes Xero, has risen 26.9% so far this year. So Xero's share price rise is similar to its peers.

The All Technology Index, which can be tracked through the exchange-traded fund (ETF) Betashares S&P/ASX Australian Technology ETF (ASX: ATEC), currently includes 50 companies. Xero shares make up approximately 10.4% of the index, while the Afterpay Ltd (ASX: APT) share price makes up a chunky 20.4% of the index. The top 5 companies that make up the index are:

• AfterPay Ltd (ASX: APT), 20.4%
• Xero Limited (ASX: XRO), 10.4%
• SEEK Limited (ASX: SEK), 7.0%
• Computershare Limited (ASX: CPU), 6.6%
• REA Group Limited (ASX: REA), 5.6%

How does Xero's $14.2 billion valuation compare?

Xero currently trades at a market capitalisation of around $14.2 billion dollars, which means it has a price-to-sales ratio of around 21x. This is certainly well above the company's own average over the last five years of closer to 12x sales,according to data from ycharts.com. It is also substantially higher than the All Technology Index average price-to-sales ratio of 6.7x.

The price-to-sales multiple alone is not necessarily a fair reflection of the company's valuation. But it does tell me that an investor buying Xero shares at $100 today is assuming a surge in revenue growth in years ahead to justify paying so much more than in previous years.

Should you buy Xero shares at $100?

I own Xero shares and I've written before that I think Xero has the potential to become one of the world's best companies. The platform that Xero provides is evolving from an accounting service to a full suite of products designed to help small businesses and is growing an incredible switching cost moat.

Still, I can't help feeling that at $100 per share, there is very little margin for error in the Xero share price. In my view, Xero's financial performance still has some way to go before justifying the $100 mark and it's likely that Xero has simply been caught up in the hot demand for consumer-tech stocks. 

As Motley Fool Australia Director of Research Scott Phillips wrote recently about Apple (NASDAQ: AAPL): "Where the 'safe stocks' used to be banks and oil companies, they're quickly being supplanted by big, well known, consumer-tech stocks."

In this kind of environment, it's best to proceed with caution.

The post Is the Xero Ltd share price a buy at $100? appeared first on The Motley Fool Australia.

Exchange-traded funds (ETFs) are a great way to invest into ASX shares.

ETFs allow us to invest in many different businesses at once in a single investment. I think it's an attractive way to passively be invested in the share market and benefit from the long-term capital growth.

ASX shares are a good place to invest. Australia is a good country for businesses to operate in and it's a good base for some mid-cap ASX businesses to launch their global plans from.

So which ETFs are good options to invest into ASX shares? Here are two of the best in my opinion:

BetaShares Australia 200 ETF (ASX: A200)

This is the lowest-costing ETF for ASX share investors. BetaShares offers this ETF for an annual cost of just 0.07% per annum – that's great value. It's even cheaper than the Vanguard ASX option. The lower the costs of an ETF, the higher the net returns.

It aims to track the returns of the S&P/ASX 200 Index (ASX: XJO). That means a sizeable amount of the returns of the ETF are influenced by the ASX's biggest blue chips.

Looking at the latest holdings, BetaShares Australia 200 ETF's biggest exposures are: CSL Limited (ASX: CSL), Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Wesfarmers Ltd (ASX: WES), Australia and New Zealand Banking Group (ASX: ANZ), Woolworths Group Ltd (ASX: WOW), Macquarie Group Ltd (ASX: MQG) and Transurban Group (ASX: TCL).

The fact that you get exposure to 200 businesses in a single investment is good diversification, although it's not as attractive as other ETFs. When you look at the sector allocation, around half of the ETF is invested in just financial and resource businesses.

However, in normal times – when COVID-19 isn't around – the ASX normally offers an attractively-high dividend yield because banks and miners usually have higher dividend payout ratios than other sectors.

Betashares S&P ASX Australian Technology ETF (ASX: ATEC)

However, what the ASX 200 offers in income, it seems to lose in growth potential. Most ASX blue chip shares have limited growth prospects, but ASX technology shares tend to offer more profit growth potential with higher margins and global growth aspirations.

Software can be replicated for new customers at a very low cost. New revenue tends to come with a higher profit margin, more of it is added to the bottom line.

This ETF gives exposure to many of the ASX's leading technology companies in segments like information technology, consumer electronics, online retail and medical technology.

It was only launched in March 2020, but it has been a strong performer since then. Since 4 March 2020 it has risen in value by 31.8%. The recovery since the COVID-19 crash has been strong. Over the past three months the ETF has produced net returns of 25.2%.

Some of its largest holdings right now are: Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO), SEEK Limited (ASX: SEK), REA Group Limited (ASX: REA), Nextdc Ltd (ASX: NXT), Carsales.Com Ltd (ASX: CAR), Altium Limited (ASX: ALU), Appen Ltd (ASX: APX) and WiseTech Global Ltd (ASX: WTC).

Many of the above names are leaders in their industries and are among the best businesses on the ASX.

This ETF's annual management fee, at 0.48% per annum, is more than BetaShares Australia 200 ETF. But the most important number for investors is the net return figure, not the annual cost figure. The Betashares S&P ASX Australian Technology ETF return has been strong so far, which has been driven by its biggest position – Afterpay.

Foolish takeaway

Both of these ETFs are good investment options for ASX investors to consider. If you want to get the cheapest ETF to track the ASX 200, then you could go for the one I have written about in this article. However, for medium-to-long-term growth I think the Betashares S&P ASX Australian Technology one will be the better performer because of the underlying investments.

The post 2 of the best ETFs for investing in ASX shares appeared first on The Motley Fool Australia.

If you've been betting against technology shares, or just waiting it out on the sidelines as tech share prices boom, you may want to skip ahead a little.

Yesterday, overnight Aussie time, the NASDAQ-100 (INDEXNASDAQ: NDX) hit yet another new record high gaining 1.4%. The index of the largest 100 tech-oriented shares is now up 29% year-to-date, and up 64% from the 23 March low.

As Ed Moya, senior market analyst at Oanda, wrote:

The love for technology stocks grew as the favorite pandemic plays, such as Apple and Tesla saw strong demand. No one wants to short this market, so we are seeing investors just rotate back into technology stocks today.  

The Apple Inc. (NASDAQ: AAPL) share price gained 2.2%, sending its market cap above US$2 trillion (A$2.8 trillion).

Meanwhile the Tesla Inc (NASDAQ: TSLA) share price rocketed 6.6%. Year-to-date, Tesla's share price is up an eye-popping 365%, and up 454% from its 18 March low. (Short sellers, I did warn you to skip ahead!)

Australia's tech shares are also on the rise again today. At the time of writing, BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) shares are up 0.68%.

This technology exchange-traded fund (ETF) holds some of Australia's largest and most innovative tech companies. ATEC's share price is up 9.13% so far in August and up 100% since its 23 March low. For comparison, the All Ordinaries Index (ASX: XAO) has gained 38% since 23 March.

Clearly, technology shares have been the big winner in 2020. And with the uptrend firmly in place, there's good reason to remain bullish on the best tech shares.

But if you're a long-term investor — which I believe is the best way to grow your wealth over time — there are other shares you may want to look at adding to your portfolio.

It hasn't been a great year for ASX energy share prices

When the price of the resource you produce dives, your share price tends to follow it down.

And that's largely been the case with Australia's energy shares.

Liquified natural gas (LNG) spot prices, for example fell below US$2 per million British thermal units (MMBTU) in the wake of COVID-19.

Tumbling energy prices took their toll on some of the ASX leading energy shares.

The Santos Ltd (ASX: STO) share price cratered more than 69% from its January peak through its 19 March low. Since the low, the Santos share price is up 110%, though year-to-date it remains down 30%.

The Origin Energy Ltd (ASX: ORG) share price also fell more than 56% from its January highs to its 23 March low. Despite a 45% rebound from that low, Origin's share price is still down 35% since 2 January.

But if your investment horizon stretches out a few years, both these companies could deliver a lot of share price growth from here.

Today, LNG spot prices are back in the US$4/MMBTU range. That's well below its peak price. And it may not return to peak prices.

But with the Australian government backing cheap energy to revive domestic manufacturing and put some money back into household pockets, well-placed energy shares don't need a return to peak prices to be profitable.

As the Australian Financial Review (AFR) notes:

Queensland Premier Annastacia Palaszczuk called on the Morrison government to match her government's $5 million commitment to a feasibility study into a new gas pipeline from the Bowen Basin.

She said Queensland had already unlocked 20,000 square kilometres of land for domestic gas supply.

"The gas pipeline will support further gas supply for manufacturing while lowering carbon emissions from existing mines," she said. "And I would welcome a matching commitment from the federal government."

Even Labor frontbencher Bill Shorten put his hat in the ring for LNG to help bring energy costs down, saying:

You can't have a manufacturing sector, from Qenos in Botany and Altona through to foundries, through to the four smelters in aluminium, the steel industry, unless we have low price energy. I think gas does tick some of those boxes.

Santos chief executive Kevin Gallagher puts the emphasis on the long-term outlook here (as quoted by the AFR):

So I am thinking we are beginning to see some green shoots of recovery, but I think there's a bit to go yet and I wouldn't expect to see any material change until some time next year. … These are 20-year projects so it's more about what the market conditions are, the ability for markets to operate, the ability for shipyards to deliver on … construction builds, etc – so you don't have big capex blowouts.

Allan Gray, portfolio manager at Suhas Nayak said:

Origin is well placed to handle the low prices. Given the cost reductions that have occurred and given the reduction of debt that's occurred over the last little while I think they're well placed to navigate the challenges.

While you're unlikely to see many energy shares dominating the financial headlines with huge new weekly share price gains in the short run, longer-term you may wish you'd bought them at today's discounted prices.

The post These beaten down ASX energy shares could mirror the tech share price boom appeared first on The Motley Fool Australia.

If you have cash sitting idle in a bank account, you will likely be disappointed at the low interest rates that appear to be sticking around for some time to come. A better strategy could be to invest in ASX shares.

The ASX share market has consistently moved higher since the lows we saw in March when COVID-19 shut down economies all over the world. In spite of the setbacks, many companies are evolving with new ways of working and pushing forward with growth strategies.

Investor confidence appears to be returning amidst a range of government stimulus measures and hopes of a vaccine. I believe there is no time like the present to invest. So, how should you invest your money? If we take a hypothetical $10,000, here is how I would invest it right now:

How I'd invest $10,000 in ASX shares

$2,000 | Xero Limited (ASX: XRO)

Xero is a leading provider of cloud-based, business software. It essentially helps organisations to run their businesses. In an ever-changing world, more and more companies are relying on Xero to manage their operations. The Xero share price has a history of strong performance, rising a staggering 2,000% since listing on the ASX. In my view, investors thinking they have missed out on all the growth don't need to worry. The Xero share price is still currently growing strongly, increasing by more than 70% since the March bear market.

With more than 2 million subscribers, Xero maintains a substantial customer base by any measure. At its recent AGM, Xero announced an additional 96,000 subscribers were added to the platform from April to July. One thing I love about Xero is its mission to make life easier for business owners. In my experience, a business owner needs to focus on 'keeping the main thing, the main thing'. As such, relying on software that simplifies management and operations is essential to business growth.

Xero software integrates with many common business expenses, such as those generated by fuel providers Caltex and BP, and even transport providers such as Uber for Business. For banking integration, Xero accesses bank feeds daily to save time with cash flow and reconciliation. All major Australian banks are supported by the platform including National Australia Bank Ltd (ASX: NAB), Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group Limited (ASX: ANZ), Westpac Banking Corp (ASX: WBC) and also Bendigo and Adelaide Bank Ltd (ASX: BEN).

The business landscape is changing rapidly and often the only way to survive is to adapt. Xero enables businesses to do just that. 

$5,000 | BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

This ASX ETF aims to track the performance of the S&P/ASX All Technology Index (ASX: XTX) (before fees and expenses). By investing your money here, you are effectively getting exposure to many leading Australian companies in the technology space. Sectors covered include information technology, consumer electronics, online retail, and medical technology. 

The top ten holdings inside this ETF consists of 

• Afterpay Ltd (ASX: APT) at 18.1% 
• Xero Limited (ASX: XRO) at 10.8%
• Computershare Limited (ASX: CPU) at 7.4%
• Seek Limited (ASX: SEK) at 7.2%
• REA Group Limited (ASX: REA) at 6.0%
• Nextdc Ltd (ASX: NXT) at 5.8%
• Carsales.com Ltd (ASX: CAR) at 5.0%
• Altium Limited (ASX: ALU) at 4.5%
• Appen Ltd (ASX: APX) at 4.3%
• WiseTech Global Ltd (ASX: WTC) at 3.1%

Technology companies are thriving amidst the COVID-19 pandemic as the world goes through a digital evolution. Buying this ASX tech ETF can help to give your portfolio broad exposure, while maintaining your investment in Australian companies.

$3,000 | CSL Limited (ASX: CSL)

Who better to tackle the COVID-19 pandemic than a company with a 100 year history of successfully delivering biotherapies and vaccines? CSL is at the forefront of healthcare development. I feel it is one of the highest quality companies available on the ASX. If you're looking to invest in ASX shares, I definitely think it should feature in your portfolio. 

The federal government is backing this biotech superstar to help produce COVID-19 vaccines for all of Australia. On top if this, CLS recently announced it had entered into a strategic partnership with the Coalition for Epidemic Preparedness Innovations (CEPI) and the University of Queensland to help with fast tracking of a vaccine. 

The CSL share price is up more than 800% over the last decade, or around 80% per year. Currently it's trading at a 14% discount to its pre-COVID highs, representing a good buying opportunity.

Foolish takeaway

If I'm employing a common sense approach to investing, I'm looking for companies and funds that stand to gain the most from real world events. The economy is still suffering through the pandemic which can make you feel uneasy as an investor.

Despite this, I believe one thing is for sure; technology and healthcare are both going to be prominent growth industries moving forward. If we continue to struggle with this pandemic longer term, tech and health will continue to thrive. If we recover more quickly, these industries are still critical aspects of everyday life. Personally, if I was to invest $10,000 into ASX shares right now, it would definitely be in the tech and healthcare sectors.

The post Where I would invest $10,000 in ASX shares right now appeared first on The Motley Fool Australia.

Yesterday (overnight Aussie time) the tech-heavy Nasdaq Composite Index (NASDAQ: IXIC) gained 1.0% to reach yet another new record high.

Year-to-date, the index of predominantly leading tech shares is now up more than 22%. That was almost unimaginable in mid-March, after the Nasdaq had lost more than 30% in the COVID-19 market rout.

But the remarkable rebound is indicative of the resilience of companies like Apple Inc. (NASDAQ: AAPL). Although Apple's share price dropped 0.3% yesterday, its 53% share price surge this year has seen it hit a market cap of US$1.96 trillion (A$2.72 trillion). And it's helped drive the Nasdaq to regular new record highs.

All this has been buoyed, of course, by the fiscal and monetary stimulus global governments have provided to keep their economies afloat during the pandemic.

It's also a good reminder that — unless you have a crystal ball to pinpoint the highs and lows — buying quality shares and holding them for the longer-term is the best way, in my opinion, to build your wealth. Far too many investors would have sold their shares near the March lows only to sit on the sidelines and watch share prices rebound before buying back in at a heavy loss.

ASX tech shares also shooting higher

The US may be home to the biggest tech shares in terms of market cap. But you'll find a growing number of high performing tech shares on the ASX as well.

In fact, the top 3 performing shares on the S&P/ASX 200 Index (ASX: XJO) for 2020 to date are all technology related.

Topping the list is fintech company Afterpay Ltd (ASX: APT). Year-to-date, Afterpay's share price is up 158%.

Coming in a close second is biotech company Mesoblast Limited (ASX: MSB). Mesoblast's share price is up 151% so far in 2020.

That almost makes data centre operator Nextdc Ltd's (ASX: NXT) 82% share price gain in 2020 seem mediocre. (It's not!)

And a look at how the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) share price has been doing shows that ASX tech shares have broadly been booming since March.

The BetaShares S&P/ASX Australian Technology ETF holds some of Australia's largest tech companies. Since its 23 March low, the ATEC share price is up 92%. (I can't give you the year-to-date figure, as the fund only listed on the ASX on 4 March.)

That covers technology shares for today. Any guesses on what the next best performing shares are involved with?

If you said 'mining', give yourself a gold star. The top 10 performing shares on the ASX 200 this year so far are all tech or mining companies.

Why Bank of America has a buy rating on BHP and RIO shares

Fortescue Metals Group Limited (ASX: FMG)'s 72% share price leap in 2020 puts it in 7th place on the ASX 200 top earners board.

BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), on the other hand, don't even make the top 20 list. At least, not yet.

The BHP share price is up 2.3% year-to-date, while the Rio Tinto share price is up 1.2%.

But after raising its forecasts for iron ore prices through 2024, Bank of America sees value in both mining giants.

In its 7 August note, Bank of America stated (as quoted by the Australian Financial Review):

We remain at buy for Vale, BHP and Rio and recently raised price objectives on all based on strong free cash flow and the better iron ore pricing outlook.

China's voracious appetite for iron ore has continued into 2020, with government stimulus playing a key role in this further growth. Yet it is natural for that growth to eventually taper off, as China's steel consumption per capita is already higher than other regions.

Our forecasts assume 0.4 per cent steel production growth in 2021 and a 0.4 per cent drop in 2022, which temper global iron ore needs ahead. To be fair, China's demand has continued to surprise us, and in recent years our forecasts have proved conservative, so further upside risk to our outlook is possible.

Noting that Vale has some of the world's lowest cost iron mines, Bank of America cautioned that, while it doesn't expect this to occur, "If Vale were to ramp up to its full potential, it could single-handedly result in global oversupply."

Bank of America's price target for Rio Tinto is $123 per share. At time of writing, the Rio Tinto share price is $1021.77.

Bank of America's price target for BHP is $44 per share. BHP's share price is currently $39.68.

The post Tech shares race to record highs as Bank of America tips BHP and Rio shares appeared first on The Motley Fool Australia.

Growth investment is one area that I find exchange-traded funds (ETFs) most useful. Sure, picking a single ASX winner like Afterpay Ltd (ASX: APT) is highly lucrative. But it's also highly difficult to get in before 'the crowd'.

By using an ETF to gain exposure to a high-growth industry or sector, you can somewhat mitigate the risk while still giving your portfolio the potential of high returns.

Let's look at 2 high-growth ETFs that I think fit the bill.

High-growth ETF 1) BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

This ETF is a relatively new addition to the ASX, only listing back in early March (unfortunate timing there). Even so, I think it's one of the most exciting, high-growth ETFs available on the ASX. ATEC tracks a basket of ASX shares that mirrors the S&P/ASX All Technology Index (ASX: XTX). This index aims to hold only ASX shares that are, according to Betashares, "leading ASX-listed companies in a range of tech-related market segments such as information technology, consumer electronics, online retail and medical technology".

Some of ATEC's current top holdings include names many ASX growth investors would be familiar with, such as Afterpay, Xero Limited (ASX: XRO), Altium Limited (ASX: ALU) and Seek Limited (ASX: SEK). Even though ATEC has only been around a few months, it has already delivered a return of 23.55% since inception. The index it tracks has an average return of 17.8% per annum over the past 5 years. That's a pretty good track record in my view and makes this fund one of the most exciting high-growth ETFs on the ASX.

2) BetaShares Asia Technology Tigers ETF (ASX: ASIA)

Another ETF from Betashares, this one also covers a basket of up-and-coming tech shares. But rather than holding ASX companies like Afterpay and Xero, ASIA instead tracks tech companies that operate in the Asian region (as the name implies). Most of the fund's holdings (56.2%) come from China. But it also has significant exposure to Taiwan (20.9%), South Korea (17.3%) and India (5.1%) as well.

You might know some of this fund's top holdings as well, which include Tencent Holdings, Alibaba Group, Samsung Electronics and JD.com.

ASIA has a few more runs on the board than ATEC but was still only incepted back in September 2018. Since then, it has delivered an average annual return of 27.77%. That's a return I would be very happy to have collected! As such, I think this fund is another top high-growth ETF that I think would make an exciting addition to your ASX portfolio today.

The post 2 exciting high-growth ETFs to buy for high returns today appeared first on The Motley Fool Australia.

The tech rally is dead!

Long live the tech rally!

In an article I penned yesterday, I shared 3 of my favourite Warren Buffett investing adages. I won't rehash all of that today.

But part of one of Buffett's investing pearls is that you should think long-term, and ignore the ups and downs. That's great advice. Not only will you sleep better, you'll almost certainly make more money in the share market over time.

What got me thinking about this particular Buffett mantra was an article in Bloomberg yesterday. One which wholly ignored this advice, and may well have scared some trigger-happy investors into selling their shares in big technology companies like Facebook, Inc. (NASDAQ: FB) and Amazon.com, Inc. (NASDAQ: AMZN).

Here's the relevant excerpt from the Bloomberg article:

An oddity is occurring as the stock market grinds back to an all-time high: Big tech is getting left behind.

A risk-on rotation rippling across markets has the tech-heavy Nasdaq 100 flirting with a third straight loss — which would be its longest slide since March…

Risking hypocrisy…

At risk of hypocrisy by focusing on the daily moves here, I can't help but point out that yesterday (overnight Aussie time) the NASDAQ-100 (INDEXNASDAQ: NDX) gained 2.6%. That puts the Nasdaq 100 — comprised of the 100 largest companies on the broader tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) — less than 1% below last Thursday's all-time high.

And some of the biggest of the big tech shares led the way. Amazon's share price gained 2.7%. And Facebook's share price closed up 1.5%.

Perhaps the biggest story in the big tech space is Tesla Inc (NASDAQ: TSLA).

Following its announcement for a planned five-for-one stock split, the Tesla share price rocketed 13.1% by Wednesday's closing bell in US markets. In after-hours trading, Tesla shares are up another 0.7% at time of writing. And this is a company with a US$290 billion (AU$406 billion) market cap we're talking about.

Year-to-date, the Tesla share price is up 261%. And if you'd bought Tesla shares back on 2 July 2010 you'd be sitting on a gain of 7,998%.

Pity the short sellers!

ASX tech share prices soaring

It's not just the US tech companies seeing their share prices rocket.

Australia's leading tech shares leapt out of the starting gate this morning, continuing their march higher.

Now obviously not every ASX tech share is seeing its share price rocket. But a look at this morning's performance of the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) gives us a good indication of how the sector is performing.

And with ATEC's share price up 1.3% at the time of writing, it looks to be doing quite well.

If you're not familiar with ATEC, the exchange traded fund (ETF) holds some of Australia's largest tech companies. It only recently began trading on the ASX, launching on 6 March. You're probably aware that wasn't the best time to launch a new ETF, as the broader market was in freefall at the time. And indeed, ATEC's share price fell 34% by 23 March.

Reflecting the strength of the Australian tech companies it holds, ATEC's share price is up 86% since its 23 March low. That's easily enough to cover its losses from its first few weeks, with the share price now up 22% since its inception.

That's the broader market.

Now let's focus in on one of the ASX's shining tech stars. Namely, Whispir (ASX: WSP).

Whispir is a software-as-a-service (SaaS) company. It provides a communications workflow platform for businesses to automate their interactions with customers and other stakeholders. A service that's clearly seen booming demand in the age of social distancing and remote working.

In intraday trading, the Whispir share price is up 3.8%. Year-to-date the share price is up more than 160%. And that comes despite its precipitous share price plunge of 56% from 21 February though 23 March. If you were lucky enough to buy shares on 23 March, by the way, you'd be sitting on a gain of 472% today.

Whispir's sky-high potential wasn't lost on the Motley Fool's own Anirban Mahanti. He recommended members of his Extreme Opportunities service buy shares of Whispir back on 11 September 2019, less than 3 months after it started trading on the ASX.

Members who followed Anirban's advice and bought shares at $1.41 would, at time of writing, be sitting on a gain of 186%. That is if they kept their focus on the long-term and didn't join in the panic selling in February and March.

With all the recent share price gains in technology shares, you'll hear some bears saying they couldn't possibly go much higher. But then the bears have been saying that for years.

So long as you've got a longer-term investment horizon, I believe there should be far more share price gains to be had in Australian and international tech shares.

The post These soaring tech shares are making savvy investors rich appeared first on The Motley Fool Australia.

Could BetaShares Australia 200 ETF (ASX: A200) be the best ASX exchange-traded fund (ETF) to invest in?

What is BetaShares?

BetaShares is one of the biggest ETF providers in Australia. It offers a variety of funds that are focused on different things like industry sectors, geographic regions or a specific index like the BetaShares Australia 200 ETF is.

What index does BetaShares Australia 200 ETF track?

ETFs that aim to follow an index will try to provide a return that is very similar to the index. The ETF I'm covering in this article tracks the ASX 200. That represents 200 of the biggest businesses on the ASX.

The ASX 200 has the largest amount of money allocated to the largest shares like Commonwealth Bank of Australia (ASX: CBA) and a very small amount allocated to the smallest shares in the ASX 200 like Wastern Areas Ltd (ASX: WSA) and Tassal Group Limited (ASX: TGR).

What are the biggest holdings of the ETF?

An ETF's performance will be dictated by how its underlying holdings perform. If its largest holdings do badly then the ETF itself will inevitably produce disappointing returns.

As at 11 August 2020, BetaShares Australia 200 ETF had 7.9% allocated to CBA, 7.7% allocated to CSL Limited (ASX: CSL), 7.1% allocated to BHP Group Ltd (ASX: BHP), 3.9% allocated to Westpac Banking Corp (ASX: WBC), 3.4% to National Australia Bank Ltd (ASX: NAB), 3.2% to Wesfarmers Ltd (ASX: WES), 3.1% to Australia and New Zealand Banking Group (ASX: ANZ), 3% to Woolworths Group Ltd (ASX: WOW), 2.6% to Macquarie Group Ltd (ASX: MQG) and 2.4% to Telstra Corporation Ltd (ASX: TLS).

These are many of Australia's most recognisable businesses which are leaders in their respective industries.

Sector diversification

The ASX has a high allocation to financials and materials. At the end of June 2020, 27.7% of the portfolio was invested in financial businesses and another 19.6% was invested in materials.

It's not surprising those two sectors are so large in the BetaShares Australia 200 ETF's holdings considering Australia's large housing market and the huge commodity export industry.

However, the problem is that these two industries don't have a lot of growth potential. I think it would be unwise to think commodity businesses can just keep generating more and more profit. Banks may also find it difficult to generate solid growth over the long-term.

It would be nicer if there was a higher allocation to tech shares, but that's just how the ASX 200 is currently structured.

Is it the best ASX ETF?

In many ways it's similar to Vanguard Australian Shares Index ETF (ASX: VAS), the same kind of weightings to the ASX blue chips and industries.

There is a slight difference in annual management fees between the two ETFs. The Vanguard ETF fee is 0.10% per annum but the BetaShares Australia 200 ETF has an annual management fee of just 0.07%. Every little helps, but both fees are so small that they're both really good passive options.

The choice between the two comes down to whether you prefer the ASX 200 or ASX 300, and whether you want to go with Vanguard and BetaShares as the provider.

I'd be happy to invest in BetaShares Australia 200 ETF but there are a couple of other ETFs I'd prefer more. One is BetaShares Australian Ex-20 Portfolio Diversifier ETF (ASX: EX20), which excludes the biggest 20 businesses and the allocation to the other 180 shares offers more growth.

The other ETF I'd be more interested in buying is BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) which is invested in ASX tech shares like Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO), SEEK Limited (ASX: SEK) and Appen Ltd (ASX: APX). Technology shares have strong growth prospects with great gross profit margins compared to typical ASX shares.

The post Is BetaShares Australia 200 ETF the best ASX ETF? appeared first on The Motley Fool Australia.