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Morningstar runs the numbers

Lewis Jackson  |  30 Aug 2021Text size  Decrease  Increase  |  
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Technology stock WiseTech closed up 28.4% after it reported, the biggest stock price reaction to an earnings report to date, writes Emma Rapaport in the Editor’s Note: “The big movers on the positive side were technology related with Nanosonics shares up 21.9% and WiseTech up 28.4%. Domino's, which Warnes describes as a "serial outperformer", again reported positively, benefiting from covid-induced eating at home. Who among us hasn't ordered a pizza this lockdown?”


The ASX makes up just 2.1% of global stock markets and Graham Hand says investors wedded to Aussie shares risk missing out on amazing opportunities: “We recently published an article with six stock picks which were all foreign companies, and some people complained that they only wanted to read about Australian companies. Come on, folks. That's like the old days of living in Australia on meat and three veg. The world offers far more variety and opportunity, with a greater range of excellent companies than Australia can ever offer. No investor should ignore the amazing opportunities in the US alone (although it is the home of hot dogs and bad coffee) a country that makes up over half of global stock markets. Australia is a tiny 2.1%.”


Thematic ETFs have soared in popularity over the last year, with six of the eleven in the market launched within the last year, writes Emma Rapaport: “Six out of the 11 thematic ETFs available to Australian investors were launched over the last year in what analysts say is an "increased appetite for thematic investors". And while the market comprises a small part of the Australian ETF industry - just over $1.9 billion of the total ETF funds under management ($110 billion) - several thematic ETFs, as categorised by Morningstar, have grown significantly over the last year.”


The acquisition of Spark Infrastructure by private groups at a modest 13% premium to fair value would leave income investors with a dwindling list of listed infrastructure stocks, I write: “Atkins is circumspect about the $2.95 a share offer—the consortium’s third and a 30% premium on the pre-offer share price—which is a “modest” 13% premium to fair value. His full recommendation is on hold until further documents are released in the December quarter.”


When BHP converts its dual listing structure to a purely Australian one, its weight on the ASX 200will increase, taking the collective weight of miners and financials to 52.4%, writes Nicki Bourlioufas: “Brett Evans, managing director of Atlas Wealth Management, said the changes to BHP’s listing would make ETF investing in the Australian market even more exposed to concentration risk. Investors in an ETF tracking the S&P/ASX 200 would be vulnerable to a downturn in the finance or mining sector, due to the fact that these two sectors would comprise 52.4 per cent of the ASX200 index and would govern over half of the returns from the index.“

Charts from last week - Robo advice and the ASX up close

Robo wealth advisers look different up close, under the hood on the "Aggressive" option at three Robo advisers (here)

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The sector composition of the ASX (as seen via an ASX 200-tracking ETF) (here)

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is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email

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