I’d buy this ASX share this week

If I were going to buy one ASX share this week it would be exchange-traded fund (ETF) Betashares Ftse 100 ETF (ASX:F100).
The post I’d buy this ASX share this week appeared first on Motley Fool Australia. –


If I were going to buy one ASX share this week it would be the exchange-traded fund (ETF) Betashares Ftse 100 ETF (ASX: F100).

What is Betashares Ftse 100 ETF?

This ETF is about giving investors exposure to the UK share market. As the name may suggest, it is invested in 100 of the biggest businesses on the London Stock Exchange.

The UK doesn’t have the large tech giants that the US does. But I like the diversification that the UK share market offers. Plus, plenty of its underlying holdings generate global earnings from many countries – they just happen to be listed in London.

It’s offered by BetaShares, one of the largest providers of passive investing options in Australia with a diverse array of ETFs.

How much is the annual management fee?

A key part of passively investing in ETFs is the management fee. The lower the annual fees the more of the net returns are left in the hands of the investors, which is obviously preferable.

Betashares Ftse 100 ETF has an annual cost of 0.45% per annum. That’s certainly not the cheapest fee out there available to ASX investors, but it’s a fair bit cheaper than many Australian active fund managers.

What shares does it own?

An ETF’s return will be entirely decided by its underlying holdings. So obviously it’s important to know what UK shares you’re actually invested in when you pick this investment option.

Betashares Ftse 100 ETF’s top 10 holdings are: AstraZeneca, GlaxoSmithKline, British American Tobacco, Diegeo, HSBC, Unilever, Rio Tinto, Reckitt Benckiser, BP and Royal Dutch Shell.

But there are plenty of interesting businesses outside of the top 10 such as: BHP Group, National Grid, Relx, London Stock Exchange, Prudential, Vodafone, Experian, Tesco, Ferguson, BAE Systems, Flutter Entertainment, Scottish Mortgage Investment Trust, Ocado, Just Eat, Smith & Nephew and Severn Trent.

I like the sector allocation of Betashares Ftse 100 ETF. Consumer staples has a 17.8% allocation, financials has a 17.4% allocation, healthcare has a 13.5% allocation, materials has a 11.2% allocation, industrials has a 11% allocation, energy has a 9.3% allocation, consumer discretionary has a 8.3% allocation, communication services has a 4.8% allocation, utilities has a 4% allocation and ‘other’ has a 2.8% allocation.

Whilst the lack of investment in ‘tech’ may be disappointing, there are plenty of other exciting and quality sectors to get exposure to. There isn’t too much of a focus on one industry. 

Why buy this week?

Good Australian ASX shares are trading strongly, so I’m not seeing too many opportunities here.

It can be a bit complicated when it comes to overseas investing. The investment needs to make sense both of the value of the underlying shares and a good exchange rate for the Australian dollar.

I think it makes a lot of sense to consider UK shares at the moment. There is a lot of uncertainty because of Brexit and COVID-19. The Betashares Ftse 100 ETF share price is still 27% lower than the pre-COVID-19 price.

Sometimes it’s a good time to buy shares whilst fear is elevated. Sometimes a share market can be under pressure for more than just a few months, but I don’t think the UK share market is going to be permanently impaired by the current issues.

The oil shares may be hurt for a while – but there are oil businesses in every major share market. I believe most of the shares in Betashares Ftse 100 ETF have a solid long-term future.

Earnings and dividends are being heavily affected at the moment because of COVID-19. But in the longer-term I think Betashares Ftse 100 ETF can return to having a solid dividend yield. At the moment the Australian dollar is close to a 52-week high again, so it’s a good time to buy GBP earnings.

These 3 stocks could be the next big movers in 2020

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post I’d buy this ASX share this week appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!