Let's see, courtesy of The Bull, if it rates them as buys, holds, or sells:

Betashares Global Royalties ETF (ASX: ROYL)

The wealth advisory firm thinks this ETF could be a buy this week.

It highlights its strong track record since inception and its attractive and predictable income as reasons to consider the fund. It said:

This exchange traded fund focuses on global companies earning royalty and intellectual property income. The benefit from companies producing royalty income is the predictable nature derived from holding the underlying investments. Sector exposure at February 27, 2026 included gold, oil, gas, pharmaceuticals and semiconductors.

Geographical exposure includes the US, Canada and Brazil. Since its inception in September 2022, the fund had returned 19.77 per cent per annum as of March 31, 2026. ROYL can be considered a solid inclusion in a balanced portfolio.

iShares MSCI Emerging Markets AUD ETF (ASX: IEM)

DP Wealth Advisory has named this emerging market fund as a hold this week.

While it is positive on what it offers investors, it isn't enough for a buy rating. It commented:

This exchange traded fund provides exposure to big and mid sized companies in emerging markets. Geographical exposure includes China, India and South Korea, among others.

The average annual total return over three years was 15.30 per cent as of March 31, 2026. A benefit of the ETF is providing exposure to companies and economies that some would find difficult to source as an individual investor.

Betashares Global Cybersecurity ETF (ASX: HACK)

This cybersecurity focused ASX ETF has been named as a sell by DP Wealth Advisory.

While the fund has been a strong performer in recent years, it thinks investors may be better avoiding it while AI disruption concerns weigh on software stocks. It explains:

This exchange traded fund tracks the Nasdaq Cyber Security Index and provides investors with exposure to the rapidly growing and ever evolving cyber security theme. Names held within the ETF included CrowdStrike Holdings, Palo Alto Networks and Cisco Systems as at April 8, 2026.

After performing strongly for the past five years, this ETF, along with other software focused investments, have been under pressure due to fears artificial intelligence large language models (LLM) could significantly disrupt software-as-a-service (SaaS) businesses. While these concerns may be over done, it's safer to take profits and avoid the SaaS sector until more certainty emerges.

The post Expert names 1 ASX ETF to buy, 1 to hold, and 1 to sell appeared first on The Motley Fool Australia.

Rather than trying to pick stocks, ETFs allow investors to back broad themes, regions, or investment styles through a single ASX-listed investment. For those wanting to spread risk while positioning for long-term growth, the right mix of ETFs can be a powerful tool.

With that in mind, here are three ASX ETFs that could appeal to investors looking for exposure to very different global themes.

iShares S&P 500 AUD ETF (ASX: IVV)

The first ASX ETF that could be a buy is the iShares S&P 500 ETF. It is one of the simplest ways for Australian investors to gain exposure to the US share market.

This fund tracks the S&P 500 Index, which includes 500 of the largest and most influential stocks listed in the United States. These businesses operate across technology, healthcare, consumer goods, financials, and industrials, making the index a broad representation of corporate America.

What makes the IVV ETF particularly attractive is the quality of its underlying holdings. The S&P 500 includes global leaders with scale, strong balance sheets, and significant pricing power. Over long periods, these companies have benefited from innovation, productivity growth, and access to the world's largest capital market.

VanEck MSCI International Value ETF (ASX: VLUE)

Another ASX ETF that could be worth considering is the VanEck MSCI International Value ETF. It offers a very different approach by focusing on valuation rather than momentum.

This fund invests in a diversified portfolio of international large- and mid-cap companies that exhibit value characteristics, such as lower price-to-earnings and price-to-book ratios relative to peers. The portfolio spans multiple countries and sectors, reducing reliance on any single market.

Its holdings currently include Micron Technology (NASDAQ: MU), Western Digital (NASDAQ: WDC), and Cisco Systems (NASDAQ: CSCO).

The VanEck MSCI International Value ETF was recently recommended by the fund manager.

VanEck China New Economy ETF (ASX: CNEW)

Finally, the VanEck China New Economy ETF could be a top pick for Aussie investors.

This ASX ETF is designed to capture the evolution of China's economy away from traditional industries and toward technology, consumption, and innovation.

It invests in Chinese stocks operating in areas such as ecommerce, digital services, healthcare innovation, and advanced manufacturing. These businesses are often aligned with rising domestic consumption and long-term structural change within the Chinese economy.

While investing in China comes with additional risks, this fund offers targeted exposure to growth areas that are traditionally difficult to access. It was also recently recommended by VanEck.

The post Why the IVV ETF and these funds could be top buys in 2026 appeared first on The Motley Fool Australia.

Whether you are seeking exposure to megatrends, fast-growing emerging markets, or long-term structural themes, the ETFs below offer a compelling mix for a small, high-impact investment.

Here are three ASX ETFs worth considering with $3,000 this December.

Betashares Global Cybersecurity ETF (ASX: HACK)

In recent years, cybersecurity has become a non-negotiable expense for businesses, governments, and consumers. With cyberattacks increasing in frequency, complexity, and cost, global spending on digital defence is surging.

The Betashares Global Cybersecurity ETF gives investors exposure to leading cybersecurity companies such as CrowdStrike Holdings (NASDAQ: CRWD), Palo Alto Networks (NASDAQ: PANW), and Cisco Systems (NASDAQ: CSCO). These are businesses providing essential security infrastructure, software, and threat detection systems to organisations worldwide.

Demand for cybersecurity is not cyclical, it is structural. As more devices and services connect to the internet, the need for reliable protection grows even faster. For investors seeking long-term, tech-driven growth without the need to pick individual winners, this fund could be a compelling addition to a portfolio in December.

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

The Betashares Global Robotics and Artificial Intelligence ETF taps into two of the most transformative forces shaping the global economy: robotics and artificial intelligence.

These technologies are already reshaping manufacturing, medicine, logistics, retail, and consumer electronics, and the pace of adoption is accelerating. Among its holdings are companies leading the charge such as Nvidia (NASDAQ: NVDA), Intuitive Surgical (NASDAQ: ISRG), and ABB Ltd (SWX: ABBN). Nvidia powers the world's AI chips, Intuitive Surgical leads robotic-assisted surgery, and ABB is a global automation heavyweight.

They, and the rest of its holdings, look well-positioned for growth over the next decade and beyond. This bodes well for the performance of the Betashares Global Robotics and Artificial Intelligence ETF, which was recently recommended by Betashares.

Betashares India Quality ETF (ASX: IIND)

Finally, the Indian economy could be one of the most powerful growth stories of the next 20 years. With a young population, rising incomes, rapid urbanisation, and increasing global influence, the country is positioning itself as a major economic engine.

The Betashares India Quality ETF gives investors exposure to high-quality Indian stocks such as Infosys (NYSE: INFY), HDFC Bank (NSEI: HDFCBANK), and Tata Consultancy Services (NSEI: TCS). These are leaders in IT services, financials, and business outsourcing.

Overall, this ETF allows Australian investors to tap into India's growth without needing to pick individual stocks or navigate the complexities of investing directly in the country. It was also recently recommended by analysts at Betashares.

The post 3 excellent ASX ETFs to buy with $3,000 in December appeared first on The Motley Fool Australia.

But if you're not sure which shares to buy, don't worry!

That's because there are plenty of exchange-traded funds (ETFs) out there for investors to choose from.

They give you instant diversification, exposure to global themes, and an easier way to build a long-term portfolio without trying to pick winners and losers.

With that in mind, here are five top ASX ETFs worth considering in October:

Betashares Nasdaq 100 ETF (ASX: NDQ)

For growth-focused investors, the Betashares Nasdaq 100 ETF is often the first stop they will make. And it isn't hard to see why. This ASX ETF tracks the Nasdaq 100 index, home to tech giants such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Amazon.com (NASDAQ: AMZN), and Nvidia (NASDAQ: NVDA). These are the stocks leading the charge in areas like artificial intelligence, cloud computing, and digital advertising. While the ride can be volatile, the long-term returns from the Nasdaq have been outstanding.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The Betashares Asia Technology Tigers ETF is another top option to consider in October. It provides exposure to the next generation of technology leaders across Asia. Think of names like Taiwan Semiconductor Manufacturing Co (NYSE: TSM), Samsung Electronics, and Alibaba (NYSE: BABA). These are companies at the forefront of semiconductors, ecommerce, and cloud infrastructure. With Asia's middle class expanding rapidly, demand for digital services is only expected to grow, giving this ASX ETF significant long-term potential.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

The VanEck Morningstar Wide Moat ETF takes a different approach to the others. It invests in US companies that have durable competitive advantages and fair valuations. Its holdings change periodically but currently include Nike (NYSE: NKE), Walt Disney (NYSE: DIS), and PepsiCo (NASDAQ: PEP). The fund has a track record of outperforming broader US markets over time, making it a compelling buy-and-hold option.

Betashares Global Cybersecurity ETF (ASX: HACK)

Cybersecurity is quickly becoming a necessity for businesses. That makes the Betashares Global Cybersecurity ETF one of the most relevant ASX ETFs for the next decade. Its portfolio includes global leaders like CrowdStrike Holdings Inc (NASDAQ: CRWD), Palo Alto Networks Inc (NASDAQ: PANW), and Cisco Systems Inc (NASDAQ: CSCO). As threats escalate and spending on cybersecurity grows, this ETF could benefit from structural demand that doesn't depend on the economic cycle.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

For investors looking for core global exposure, the Vanguard MSCI Index International Shares ETF could be a standout pick in October. It provides access to more than 1,200 international stocks across the US, Europe, and Asia. Holdings include names such as Nestle (SWX: NESN), Toyota Motor Corp (TYO: 7203), and Roche Holding AG (SWX: ROG). With broad diversification and Vanguard's low-cost structure, this fund is a simple yet powerful way to capture long-term market growth.

The post 5 top ASX ETFs to buy in October appeared first on The Motley Fool Australia.

Let's take a look at three stocks that the fund managers at LSN Emerging Companies Fund are bullish on:

ASX tech company going in the right direction

Artificial intelligence has been the topic du jour in public discourse this year.

The mainstream release of generative AI engine ChatGPT has opened the world's eyes to the astounding possibilities of this technology.

And, perhaps unsurprisingly, many investment experts have named it as the theme to follow in the coming years.

The LSN team is putting its money into Megaport Ltd (ASX: MP1) to ride this megatrend.

"The recent organisational restructure and investor demand for all things AI pushed Megaport Ltd +21% higher during [last] month," it said in a memo to clients.

"The company provides the connectivity between customers and the top seven cloud providers across three hundred data centres."

Megaport was one of those businesses that burnt through capital in return for growth but is now endeavouring to achieve positive cash flow to satisfy the new world of high interest rates.

The business also lost its chief executive earlier this year.

"The restructure included the appointment of ex-Cisco Systems Inc (NASDAQ: CSCO) executive Michael Reid as CEO, who laid out the pathway to a significant improvement in profitability," read the LSN note.

"A renewed focus on the direct sales channel is a key driver of growth as they position themselves 'to be selling the picks and shovels for the 'AI gold rush"."

'Highly profitable' business on 'confident growth trajectory'

Shares for online currency exchange platform OFX Group Ltd (ASX: OFX) also went gangbusters in May, rocketing a whopping 28%.

According to LSN analysts, the outlook announced during the full-year report last month absolutely exceeded expectations.

"The unwind from COVID tailwinds caused concern in the market about their ability to generate earnings growth, however, benefits from both volume and price, in addition to synergies from their most recent acquisition, has the company confident they can continue their growth trajectory."

The LSN memo noted the company is already "highly profitable".

"[It's] earning operating EBITDA margins of 25% to 30% and has consistently generated free cash flow, which will allow them to pursue further bolt-on acquisitions."

The OFX share price is still 20.2% below where it started 2023.

Property business ready for turnaround

Lifestyle Communities Ltd (ASX: LIC) shares had a miserable May, losing 11%.

"Victoria's leading housing estate operator Lifestyle Communities Ltd advised that settlements for the current financial year would be slightly below previous expectations," read the memo.

"The shortfall stems from two projects — Wollert and Deanside — with residents taking longer to start selling houses, although the company did maintain their long-term settlement targets."

Despite this hiccup, the LSN analysts like what the future holds for the retirement property operator.

"Looking ahead we see the tailwinds for the sector remaining strong with Lifestyle Communities standing to benefit as an experienced player with a solid pipeline, track record and management team."

The Lifestyle Communities share price is down 23.6% year to date.

The post 'AI gold rush': 3 ASX shares LSN analysts love right now appeared first on The Motley Fool Australia.

The stock market built up some positive momentum last week, but it's unclear whether the good times will last. At the market open on Monday morning, the Dow Jones Industrial Average (DJINDICES: ^DJI) had given back a tiny portion of its substantial recent gains, trading down about 0.25%.

Even though this earnings season is starting to wind down, some key components of the Dow Jones Industrials are set to report their latest results in the coming week. What Walmart (NYSE: WMT), Home Depot (NYSE: HD), and Cisco Systems (NASDAQ: CSCO) say about the conditions of their respective businesses will play a key role in determining whether last week's rally continues through this one, or whether the bear will growl once again.

Getting ready for retail

Tuesday morning will bring two key reports from the retail sector. Department store giant Walmart is set to release its results at around 7 a.m. ET, while Home Depot has historically gotten a slightly earlier start, having published its press release last quarter at 6 a.m. ET.

Walmart's numbers for its fiscal 2023 second quarter, which ended July 31, showed considerable strength amid a tough economic environment. Revenue rose 8.4% to $152.9 billion, and although operating income sagged 7% year over year due to higher costs, its net income of $5.15 billion was up 20% from year-earlier levels. However, the retailer warned at the time that conditions could continue to worsen for the rest of the fiscal year. Management projected that its fiscal 2023 sales would rise by about 4.5%, but forecast that adjusted earnings per share would fall by between 9% and 11% 

Home improvement specialist Home Depot also held up well in its fiscal 2022 second quarter, posting revenue of $43.8 billion for the period that ended July 31. That top-line figure was up 6.5% year over year. Earnings of $5.05 per share compared favorably to year-earlier profits of $4.53 per share, and Home Depot was able to confirm that it still sees its fiscal year sales climbing 3% on mid-single-digit percentage gains in earnings per share.  

Investors will be watching closely to see if ongoing macroeconomic pressures start to have bigger impacts on these companies' financials. Most analysts following Walmart's stock expect the company to post a year-over-year decline in earnings, albeit with continuing revenue growth. Meanwhile, Home Depot is expected to keep boosting its bottom line. Any disappointments on those fronts could put the Dow stocks' prices back on a downward slope, although investors will hope for better news to support the recent positive momentum.

Cisco looks to keep inching ahead

Meanwhile, Cisco Systems is set to announce its financial results after the closing bell on Thursday. Investors are hopeful that the networking giant will be able to keep bouncing back during what has been a tough year for tech stocks generally.

In Cisco's fiscal fourth quarter, which ended July 30, showed the pressures hitting the company. Revenue was down 0.2% year over year to $13.1 billion, with declines in internet-related revenue offsetting gains in the security and application optimization areas. Adjusted earnings dropped by 1% to $0.83 per share. However, annualized recurring revenue rose 8% to $22.9 billion, and Cisco continued to make headway in its transition toward getting more of its overall sales from subscription-based sources.

Investors are hopeful that its fiscal 2023 first-quarter report will show modest strength. Those following the networking giant anticipate sales growth of around 3% and a similarly small rise in earnings.

It's easy to overlook Cisco within the crowd of disruptive companies competing against it. However, the tech giant has a long legacy of success, and whatever it says Thursday has the  potential to ripple across the entire technology sector. 

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

The post These 3 Dow stocks will make or break the market this week appeared first on The Motley Fool Australia.

Yes, since 4 October, the HACK ETF has put on an impressive 7.27%, including the healthy 1.5% it's managed today so far. That's almost triple the broader market.

So what's gone so right for this ASX ETF?

Why has the BetaShares Global Cybersecurity ETF HACKed such a good month?

Well, to answer that question, let's check out this ETF's top holdings. So the BetaShares Cybersecurity ETF tracks the performance of the Nasdaq Consumer Technology Association Cybersecurity Index. This aims to provide "exposure to the leading companies in the global cybersecurity sector."

So let's check out which companies this ETF's portfolio is currently most heavily invested in, as of 2 November:

1. Palo Alto Networks Inc (NYSE: PANW) with a portfolio weighting of 6.3%
2. Accenture plc (NYSE: ACN) with a weighting of 6.1%
3. Cisco Systems Inc (NASDAQ: CSCO) with a weighting of 5.6%
4. Okta Inc (NASDAQ: OKTA) with a weighting of 5.5%
5. Crowdstrike Holdings Inc (NASDAQ: CRWD) with a weighting of 5.4%
6. Cloudflare Inc (NYSE: NET) with a weighting of 4.5%
7. Tenable Holdings Inc (NASDAQ: TENB) with a weighting of 3.4%
8. Zscaler Inc (NASDAQ: ZS) with a weighting of 3.3%
9. F5 Networks Inc (NASDAQ: FFIV) with a weighting of 3.1%
10. Cyberark Software Ltd (NASDAQ: CYBR) with a weighting of 3.1%

So the shares with the most weighting (and thus influence) in the HACK ETF are Palo Alto, Accenture, Cisco, Okta and Crowdstrike. Together, these companies make up 28.9% of this ETF's portfolio. So let's see how they've performed over the past month.

Since 4 October, Palo Alto shares are up a healthy 8.3%.

Accenture shares are up 13.15%.

Cisco has enjoyed gains of 6.25%.

Okta is up 12.8%.

And Crowdstrike has managed 12.2% in gains.

So with the top shelf of HACK's portfolio enjoying such a successful month, it's perhaps no surprise that this ETF's pricing has commensurately appreciated.

But investors in this ETF might be used to outperformance by now. Since its inception in August 2016, the HACK ETF has averaged an annual gain of 22.47%. Over the past year alone, investors have enjoyed a gain of 39.26%.

The BetaShares Global Cybersecurity ETF charges a management fee of 0.67% per annum.

The post Why has the BetaShares Global Cybersecurity ETF (ASX:HACK) share price leapt 7% in a month? appeared first on The Motley Fool Australia.

On Friday, the US-based tech giant disclosed it had suffered a breach at the hand of hackers. Let's take a look at the details.

Microsoft breach links with SolarWinds cyberattack

In a post to its security response center, Microsoft divulged that it was tracking new cyberattacks conducted by Russian hacking group Nobelium.

The group were successful in installing malicious software on a computer used by a Microsoft customer support employee. Nobelium proceeded to steal sensitive information which would be used to target Microsoft customers.

Accordingly, Microsoft responded by securing and removing access to the compromised device. Afterwards, the company noted its customer service agents have access to minimal personal information as part of its 'Zero Trust' approach to customer information.

Reportedly three customers were affected by the compromised data. All customers that were compromised or targeted were being contracted by the company.

Furthermore, the cyberattack on Microsoft was part of a larger attack targeting 36 countries. This activity predominately targeted IT companies and government organisations.

Cyberattack déjà vu

The hacking group involved in this breach was also responsible for the SolarWinds Corp (NYSE: SWI) attack in December 2020.

That breach was one of the largest in recent history, impacting 18,000 users including the U.S. Treasury, Department of Commerce, and Homeland Security.

"These attacks appear to be a continuation of a multiple efforts by Nobelium to target government agencies involved in foreign policy as part of intelligence gathering efforts," said Microsoft.

Investing in combatting cyberattacks

Companies and governments are investing billions to fend off the rapidly growing occurrence of cyberattacks. With it becoming an increasing problem, the amount of funding funnelling into the sector is unprecedented.

So, if you are looking for ways to try and capitalise, there are options out there. One ASX-listed example is the Betashares Global Cybersecurity ETF (ASX: HACK). The exchange-traded fund (ETF) is invested in 40 of the world's biggest and most innovative companies in the space.

Moreover, the top 5 holdings in the ETF currently consist of Crowdstrike Holdings Inc (NASDAQ: CRWD), Zscaler Inc (NASDAQ: ZS), Okta Inc (NASDAQ: OKTA), Accenture PLC (NYSE: ACN), and Cisco Systems Inc (NASDAQ: CSCO).

The HACK ETF climbed 0.42% higher to $9.52 per share in today's session. Meanwhile, over the past 12 months, the fund has delivered a 17.8% return.

The post Microsoft (NASDAQ:MSFT) customers compromised in a cyberattack appeared first on The Motley Fool Australia.

The most popular ASX ETFs on the market today are index funds – those that track a broad-market benchmark like the S&P/ASX 200 Index (ASX: XJO) However, there are others out there that could prove even better for diversification purposes. Here are 2 such funds:

iShares Global Consumer Staples ETF (ASX: IXI)

This ETF from iShares invests in a basket of companies that all dwell within the consumer staples sector. Consumer staples are goods or services that we humans tend to need, rather than want. As such, companies that sell food, drinks, household essentials and other life basics make up most of the holdings of this ETF. 'Sin stocks' that manufacture vices like alcohol and tobacco are also included. The appeal of this sector rests on this 'essential nature'. Companies that sell consumer staples are arguably likelier to be resistant to recessions, inflation and other economic troubles. That's simply because they are the last things that people tend to stop buying in times of trouble.

This iShares ETF invests in a global basket of more than 90 of these companies. Most of its holdings hail from the United States, with names like the Coca-Cola Co (NYSE: KO), Colgate-Palmolive Company (NYSE: CL), Altria Group Inc (NYSE: MO) and Walmart Inc (NYSE: WMT). But there are other geographies represented too, including our own with the inclusion of Woolworths Group Ltd (ASX: WOW) and the A2 Milk Company Ltd (ASX: A2M).

This ETF charges a management fee of 0.46% per annum.

BetaShares Global Cybersecurity Etf (ASX: HACK)

This ETF from BetaShares invests in an area that's a little different. Cybersecurity is arguably one of the most important industries of the 21st century, and will likely only grow in importance as more and more 'stuff' is done online. That's the trend that this ETF tries to capture.

HACK invests in a basket of global companies all dedicated to cybersecurity efforts. Like IXI, many of its holdings are from the USA. But there is still some representation from Israel, Britain and Japan here too. Some of this fund's top holdings include names like Cisco Systems Inc (NASDAQ: CSCO), CrowdStrike Holdings Inc (NASDAQ: CRWD), Zscaler Inc (NASDAQ: ZS) and Cloudflare Inc (NYSE: NET).

HACK charges a management fee of 0.67% per annum.

The post 2 ETFs that could be buys today for any ASX share portfolio appeared first on The Motley Fool Australia.

But these days, it has never been easier. You don't even have to navigate foreign sharemarkets, there is a plethora of exchange-traded funds (ETFs) on the ASX that take care of the hard work for us.

Here are two such ETFs today that offer diversification for an ASX share portfolio.

2 ASX ETFs for future-proof diversification

Vanguard MSCI Index International Shares ETF (ASX: VGS)

This ETF from Vanguard brings home the bacon when it comes to diversification. It holds more than 1,500 companies dispersed amongst the major advanced economies of the world. That's diversification for you. This includes the United States (of course), as well as Canada, Britain, Europe, Japan, Singapore and Hong Kong. US shares do make up the lion's share of this fund's holdings with more than 60%. But since the US is home to most of, if not all of, the world's largest companies, this is understandable.

In VGS, you'll find all of the big US tech companies like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com Inc (NASDAQ: AMZN), as well as other giants like Nestle SA, LVMH and Toyota.

VGS has returned an average of 12.4% per annum over the past 5 years, and charges a management fee of 0.18% per annum.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ETF today is this cybersecurity fund from BetaShares. The brilliantly tickered HACK holds 40 companies that all offer goods and services related to electronic security. An area I'm sure we can all agree is of growing importance in this day and age.

This ETF's holdings are heavily weighted towards the US at more than 88% of its holdings being American companies, reflecting the centrality of the US in this industry. But it also has exposure to Britain, Israel, Rance, Japan and South Korea. Some of this ETF's top holdings include CrowdStrike Holdings Inc (NASDAQ: CRWD), Zscaler Inc (NASDAQ: ZS), Cisco Systems Inc (NASDAQ: CSCO) and Splunk Inc (NASDAQ: SPLK).

HACK has returned an average of 20.26% per annum and charges a management fee of 0.67% per annum.

The post 2 ETFs to buy today for future-proof ASX diversification appeared first on The Motley Fool Australia.

Investors are nervous because soaring inflation could provoke central banks to raise interest rates.

Many ASX shares are priced as if rates will stay at the current historic lows, so it's understandable why some people might be anxious.

"We're pretty certain about this. But we're not absolutely certain about the timing of the inflation," Nucleus Wealth head of investments Damien Klassen said last week.

"We are pretty certain that there'll be inflationary shock where people are going to be pricing in inflation. Over the last few days even, we've seen this – it's gone a bit exponential."

Speaking on a on a Nucleus webinar, Klassen and chief strategist David Llewellyn Smith picked out some places to invest in anticipation of inflation:

Value vs growth shares

Growth shares benefit the most from low interest rates, as their valuations depend on how cheap future money is. 

So the most obvious way to invest for inflation is to shift into value stocks. 

But once inflation hits the fan, Klassen said keen investors should still keep an eye on growth bargains.

"You're going to get these opportunities to buy growth stocks over the next few months or a year or two at a much cheaper price," he said.

"Because if we do return to deflation, those growth stocks are once again going to be in demand."

The transition away from growth stocks has already happened somewhat in the past couple of weeks. And Klassen expects this to continue for "a few months".

He did emphasise that this didn't mean buying up growth shares indiscriminately when the market is depressed. Purchases still need to be made at a prudent price.

"Note the Cisco Systems Inc (NASDAQ: CSCO) example I keep trotting out. The last 20 years, they've increased their earnings 6 times and their share price has halved," said Klassen.

"Because the price was so high to start with in the [1990s] tech boom. So it's a matter of getting that price right."

The Nucleus team, therefore, is buying into value shares now then plan to flip over to growth later in the year, according to Klassen.

Buy international shares 

A by-product of the current environment is that the Australian dollar is trading at a high value.

It surpassed 80 US cents last week after descending to as low as 59 US cents 12 months ago in the midst of the COVID-19 panic.

"You're getting chances to buy international stocks at cheaper prices, over the next 6 to 12 months," said Klassen.

"If you can buy these with an Aussie dollar at 80 or 85 [US] cents, here's your chance to start getting exposure to international assets that are going to be very beneficial over the longer term – at a discount."

Exceptions to these rules

Klassen did note some exceptions to the above strategies.

"There's ones where we're reluctant holders," he said.

"We've got a lot more banks than we'd like to have."

He explained that the current environment of emerging inflation and rising long-term bond interest rates is positive for bank profitability.

But the danger is that deflation will soon take over again and stick around in the long term.

"If we're headed towards the European and Japan experience then the banks are really going to be the ones that suffer."

Shares associated with commodities also have short term potential but could plunge at any time after inflation arrives.

"There is a value trade in there but it's not an infinite value trade. We are concerned about the downside as well as the upside."

The post How to invest in inflation appeared first on The Motley Fool Australia.

Famously, this excitement turned into a frenzy that has come to be known as the 'dot-com boom'. Between 1999 and 2000 for example, Amazon shares went from around US$20 to US$100 a share (which seems laughable now, but it was a big deal back then). Internet infrastructure company Cisco Systems Inc (NASDAQ: CSCO) also experienced a similar move, going from around US$12 a share to nearly US$80 over the same period. Unlike Amazon, Cisco shares have never reached those heights again, 20 years later. Today, they sell for US$44.32.

But back then, it seemed every company that told investors it had even the vaguest hint of being an 'online business' would see a flood of capital chasing its shares.

We can see this in the performance of the tech-heavy Nasdaq Composite Index (INDEXNASDAQ: .IXIC). According to Macrotrends, the Nasdaq posted a 39.92% gain in 1995, a 22.71% gain in 1996, a 21.64% gain in 1997, a 39.63% gain in 1998 and a whopping 85.59% gain in 1999. No wonder that's the year Prince was partying!

Nasdaq: what goes up must come down?

But those gains are not what anyone should consistently expect from an index, if the past is anything to go by. The following three years were a bloodbath for the Nasdaq. It reportedly lost 39.29% in 2000, 21.05% in 2001 and 31.53% in 2002. Thus, the 'dot-com boom' has become the 'dot-com bust' in investing collective wisdom today.

But that's ancient history, right?

Well, let's have a look at what the Nasdaq has been doing in recent years:

• 2017 — a 28.24% gain 
• 2018 — a 3.88% drop
• 2019 — a 35.23% gain 
• 2020 (so far) — a gain of 36.14% (since 23 March, it is up more than 80%).

Now those numbers aren't as crazy as the dot-com boom. But they do seem unusually large. For some context, the three years preceding 2017 all brought in gains under 15% per year.

I'm not saying this means that 2021 is going to bring a painful crash. I, like everyone else, have no idea what the markets are going to do tomorrow, let alone next year. But if 2021 sees a year of 85% returns, history tells us we should be on high alert.

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Cisco Systems Inc (NASDAQ: CSCO) announced on Monday that it is making two acquisitions to help improve the functionality of its WebEx videoconferencing, collaboration, and customer service platform. The networking giant is paying an undisclosed sum to acquire audience interaction platform Slido. The technology company provides tools that help moderate large groups, and "enables real-time feedback and insight before, during and after any meeting." Slido has features that allow viewers and meeting participants to ask questions, answer polls, and participate in quizzes, among others. The Motley Fool regularly uses Slido for its events. 

Slido boasts over 7 million participants each month and will continue to be available for use by competitors. "Cisco understands the value in continuing Slido as a stand-alone product and building great integrations with other virtual meeting and presentation platforms like [Microsoft (NASDAQ: MSFT)] Teams, Zoom (NASDAQ: ZM) and [Alphabet's (NASDAQ: GOOGL) (NASDAQ: GOOG)] Google Meet," said Juraj Pal, Slido's product head. 

The tech giant also revealed plans to acquire IMImobile, a cloud communications software and services company, for roughly $730 million. IMImobile allows organizations to communicate with their customers across various channels, including social media, messaging, and voice. The company will become part of WebEx to further Cisco's contact center-as-a-service (CCaaS) platform. The company will use the platform's omnichannel capability to allow businesses to better connect with their customers.

Zoom has become the de facto industry standard for video conferencing since the rise of the pandemic earlier this year. In the third quarter, its revenue grew 367% year over year. At the same time, the number of customers contributing $100,000 or more in trailing-12-month revenue grew 136%, while the number of customers with more than 10 employees grew 485%. This marked the third consecutive quarter of triple-digit revenue growth for Zoom, eating into Cisco's market opportunity.

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

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Cisco (NASDAQ: CSCO) and Microsoft (NASDAQ: MSFT) are generally considered solid long-term investments for conservative investors. Both tech giants have wide moats -- Cisco is the world's top maker of networking hardware, and Microsoft is its biggest software company.

But over the past 12 months, Cisco's stock only rose by the low single digits as Microsoft's stock soared more than 30%. Does that trend indicate that the former is a weaker investment than the latter? Let's dig deeper to find out.

Cisco's strengths and weaknesses

Cisco's core infrastructure business -- which sells routers, switches, wireless hardware, and other hardware products -- is a slow-growth one that faces tough competition from rivals like Huawei, Arista Networks, Hewlett Packard Enterprise, and Juniper Networks.

Cisco offsets that slower growth with two main strategies: expanding its portfolio of higher-growth applications and security software (16% of its revenue last quarter) with new products and acquisitions, and bundling those services with its hardware into cost-effective packages.

Those strategies shore up Cisco's defenses against its rivals, but it still faces two long term challenges. First, it faces softer enterprise spending in China, the U.S., and the UK as several big macro issues -- like the trade war and Brexit -- remain unresolved.

Second, a growing number of big enterprise customers are pivoting toward cheaper "white box" alternatives to Cisco's hardware, which run on open-source software and rely on cloud-based SDN (software-defined networking) to do the heavy lifting. Cisco could struggle to lock in those customers as they break free from its hardware and software ecosystem.

Microsoft's strengths and weaknesses

Microsoft owns a sprawling portfolio of software and hardware products, but most of its growth comes from its cloud unit -- which generates most of its revenue from Office 365, its Dynamics CRM (customer relationship management) platform, and Azure.

Azure, the second largest cloud infrastructure platform after Amazon (NASDAQ: AMZN) Web Services (AWS), is the cloud unit's core growth engine. Its revenue surged 68% annually on a constant currency basis last quarter, which boosted Microsoft's total commercial cloud revenue 39% to $11 billion, or 36% of its top line.

Azure's growth is supported by three main tailwinds: the rising use of cloud-based services, the increasing reluctance of Amazon's rivals (especially retailers) to use AWS, and the expansion of its ecosystem with new availability zones and services.

Microsoft's weakest business in recent quarters was its gaming unit, due to the maturation of the current console generation which started nearly six years ago. However, that business should recover next year when Microsoft launches its next-gen Xbox.

Which company is growing faster?

Cisco's revenue and adjusted earnings rose 7% and 20%, respectively, in fiscal 2019 (which ended on July 27). However, analysts anticipate just 2% revenue growth and 7% earnings growth this year, due to tougher year-over-year comparisons, slower enterprise spending, and ongoing challenges in China.

China only accounts for a small percentage of Cisco's sales, but the region's revenue is falling sharply due to a trade war-related backlash, which locked the company out of bids for network upgrades at state-backed enterprises.

Microsoft's revenue and adjusted earnings rose 14% and 22%, respectively, in fiscal 2019 (which ended on June 30). Wall Street expects its revenue to rise 11% and for its earnings to improve 10% this year.

That forecast assumes that Microsoft's commercial cloud revenue will keep rising, that its new Surface products will attract new customers, and that its gaming ecosystem -- which includes both consoles and popular subscription services like Xbox Game Pass -- will keep expanding.

The dividends and valuations

Cisco started paying a dividend in 2011, and it's raised its payout every subsequent year. It spent 40% of its free cash flow (FCF) on its dividend over the past 12 months, and currently pays a forward yield of 3%. Its stock currently trades at 13 times forward earnings.

Microsoft hiked its dividend annually for 15 straight years. It spent just 36% of its FCF on that payout over the past 12 months, and currently pays a forward yield of 1.5%. Microsoft currently trades at 24 times forward earnings.

Cisco's lower multiple and higher yield might look more appealing to value-seeking investors, but Microsoft's double-digit revenue and earnings growth also justify its higher valuation.

The winner: Microsoft

Cisco and Microsoft are still both stable long-term investments. But if I had to choose one at current prices, I'd pick Microsoft because it has a better diversified business and more irons in the fire (particularly Azure and the next Xbox), and faces fewer near-term headwinds.

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

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