With more than $8 billion in assets under management, QUAL is currently the fifth most popular ASX ETF on our markets. It comes in behind the Vanguard Australian Shares Index ETF (ASX: VAS), the Vanguard MSCI Index International Shares ETF (ASX: VGS), the iShares S&P 500 ETF (ASX: IVV) and the BetaShares Australia 200 ETF (ASX: A200).

Unlike those four ETFs, though, QUAL isn't a market-wide index fund that blindly invests in companies according to their market capitalisation, with few other considerations.

Instead, it tracks an index that actively screens companies to identify their quality. These screens include factors like a stock's return on equity, earnings stability and financial leverage.

After applying these screens to a range of internationally listed shares, the VanEck International Quality ETF settles on a portfolio of around 300 different stocks, hailing from more than a dozen different countries. These countries range from Switzerland, Japan and the United Kingdom to China, Denmark and Ireland.

However, the vast majority of QUAL's portfolio is drawn from the United States of America, which commands more than three-quarters of this ETF's weighted holdings.

So, let's get into what you're actually buying when purchasing QUAL units in 2026.

QUAL: What's in this ASX ETF's box?

Here are the current top ten holdings of the VanEck International Quality ETF, as well as their respective weightings in the QUAL portfolio:

1. Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) at 5.67% of the total QUAL portfolio
2. Meta Platforms Inc (NASDAQ: META) at 5.02%
3. NVIDIA Corporation (NASDAQ: NVDA) at 4.64%
4. Apple Inc (NASDAQ: AAPL) at 4.62%
5. Microsoft Corporation (NASDAQ: MSFT) at 4.46%
6. Eli Lilly & Co (NYSE: LLY) at 3.44%
7. Visa Inc (NYSE: V) at 2.92%
8. ASML Holding N.V. (AMS: ASML) at 2.52%
9. Johnson & Johnson (NYSE: JNJ) at 1.86%
10. Walmart Inc (NYSE: WMT) at 1.77%

Some other significant QUAL holdings include Mastercard Inc (NYSE: MA), Netflix Inc (NASDAQ: NFLX), Costco Wholesale Corp (NASDAQ: COST) and Caterpillar Inc (NYSE: CAT).

Not only does this list reveal how dominant the US is in this ASX ETF, but it shows how similar its holdings are to a broad-market US index fund like the iShares S&P 500 ETF. We discussed that ETF just the other day, so check out how its holdings compare to QUAL's here.

This methodology seems to have worked quite well for the VanEck International Quality ETF, though. As of 31 December, QUAL units have returned an average of 14.8% per annum over the past ten years, and 22.85% per annum over the past three. It will be interesting to see if this performance keeps up in 2026.

This ASX ETF charges a management fee of 0.4% per annum.

The post Investing in the VanEck International Quality ETF (QUAL)? Here's what you're really buying appeared first on The Motley Fool Australia.

According to the company's newly released voting results, an extraordinary 99.88% of votes cast were in favour of the takeover. In addition, 96.90% of shareholders present and voting supported the transaction, comfortably exceeding both approval thresholds required under the Corporations Act.

The outcome confirms what was already evident from proxy tallies ahead of the meeting: shareholder support for the Caterpillar bid is emphatic.

With no superior offer emerging, RPM investors have embraced the opportunity to crystallise significant, certain value at a premium. RPM Global shares are up 65% year to date, largely spurred on by news of the acquisition.

What happens next?

Although shareholder approval is a major milestone, several steps remain before the scheme becomes binding.

The scheme is still subject to approval by the Foreign Investment Review Board (FIRB), which remains pending, as well as Federal Court approval, with a hearing scheduled for 3 February 2026 in Melbourne.

If all conditions are met, RPM Global shares are expected to be suspended from trading at the close on the effective date, and the takeover would be fully implemented on 18 February 2026.

Why shareholders backed the deal

For most investors, the Caterpillar offer represents a clean exit at a compelling valuation with no market execution risk. In the absence of any rival bids, the certainty of cash today outweighs the operational risks and competitive pressures involved in continuing to scale the business independently.

Mining technology remains a rapidly evolving sector, and Caterpillar's global footprint and financial strength provide RPM's software with an opportunity to reach a wider commercial platform than it could achieve alone.

Foolish bottom line

With shareholder approval secured and the ACCC having already cleared the deal, only FIRB and the court remain as formal hurdles. Barring unexpected delays, RPM Global appears firmly on track to join the Caterpillar group early in 2026, marking the end of the ASX chapter for this mining technology company.

The post What's the latest update on takeover target RPM Global? appeared first on The Motley Fool Australia.

With that in mind we look at two ASX companies – an insurance brokerage company and a tech company which provides mining software solutions – that analysts have recently tipped as sells (courtesy of The Bull).

Limited upside left for this ASX 300 share

The first company you might want to sell is RPMGlobal Holdings Ltd (ASX: RUL).

That's according to Medallion Financial Group's Stuart Bromley.

RPMGlobal shares are up 0.3% in late morning trade on Friday, changing hands for $4.915 apiece. This sees the share price up 63.8% in 2025.

"RUL is a high-quality mining software business, operating as a pure play software-as-a-service provider to major mining clients and state governments," Bromley said.

So, why is he issuing a sell recommendation on the ASX 300 share?

Bromley explained:

RUL received a takeover offer at $5 a share. A RUL shareholder vote regarding the takeover proposal is scheduled for December 19. The stock was trading at $4.91 on November 27, so upside is limited.

That takeover offer was lobbed by United States based mining equipment manufacturer Caterpillar Inc (NYSE: CAT). RPMGlobal announced the acquisition deal on 1 September. And investors responded by sending the share price rocketing 22.8% on the day.

Bromley conclude, "With many quality large market capitalisation stocks now trading at meaningful discounts, we believe it's more beneficial to sell and redeploy the capital into more attractive opportunities."

Which brings us to…

Company facing earnings pressure

Peak Asset Management's Niv Dagan believes it is time for investors to sell Steadfast Group Ltd (ASX: SDF).

"Steadfast operates a large general insurance broker network," he said.

Steadfast shares are up 2.2% at time of writing on Friday, swapping hands for $5.11 each. But the ASX 300 share has underperformed this year, with the Steadfast share price down 12.6% in 2025. Losses which will have been modestly eased by the stock's 3.8% fully franked dividend yield.

And Dagan believes the company will struggle to outperform in the year ahead.

"Steadfast has materially reduced fiscal year 2026 premium rate expectations, cutting Australian premium growth guidance from between 3% and 5% to between 1% and 2%," he noted.

Dagan added:

While underlying net profit after tax guidance remains between $315 million and $325 million in fiscal year 2026, the company is increasingly reliant on acquisitions and cost-out initiatives to meet earnings targets.

Connecting the dots, Dagan said, "Structural pressures in insurance broking are intensifying. The shares have fallen from $6.63 on October 28 to trade at $5.225 on November 27."

The post Sell alert! Why analysts are calling time on these 2 ASX 300 stocks appeared first on The Motley Fool Australia.

Investments that offer both growth and income potential are usually lucrative ones. A company, or set of companies in the case of an ETF, that can afford to pay out substantial income whilst consistently growing its earnings and profits is often a sign of a potentially hot investment.

One such investment is in my own ASX share portfolio, and is one that I have held for a number of years now. Ever since my first purchase, this ASX ETF has delivered both growth and income in spaces. As such, I have no plans to ever sell this high-flying ETF.

It is none other than the VanEck Morningstar Wide Moat ETF (ASX: MOAT).

The VanEck Wide Moat ETF is a fund that is designed to mimic the investing philosophy of the legendary Warren Buffett.

Buffett has long touted the benefits of investing in companies with 'wide economic moats'. A moat is a concept Buffett himself coined a while ago. It refers to an intrinsic competitive advantage a company can possess, which helps it stay ahead of its competition, in the same way a castle's moat kept out intruders centuries ago.

An ASX ETF to buy for growth and income?

There are a few forms that this kind of moat can take. Some examples include a strong and trusted brand, a cost advantage over competitors, or providing a good or service that customers find difficult to avoid paying for.

The VanEck Wide Moat ETF holds a portfolio of US stocks that are selected based on their perceived possession of at least one of these moats.

We can see this in action by looking at some of this ASX ETF's holdings. As of 31 August, these included the likes of Alphabet, Boeing, Nike, Disney, Adobe, Caterpillar, Microsoft and Clorox.

It's not hard to see why these names appear in MOAT's holdings. Microsoft, for example, provides products like Office, Teams and Windows that are indispensable in modern workplaces. Disney has some of the best intellectual property in entertainment, while Nike has one of the world's most beloved brands.

This strategy has worked exceptionally well for this ASX ETF. Since its inception in mid-2015, MOAT units have appreciated by about 210% (at recent pricing), which works out to be roughly 12% per annum.

In addition, its investors have also routinely enjoyed substantial dividend income from this ETF. MOAT tends to pay out just one dividend distribution every year. But it's often a substantial one. To illustrate, investors have just banked an annual payout worth $7.56 per unit. That gives this ASX ETF a trailing yield of about 6.1%.

If we combine both growth and income, MOAT investors have enjoyed an average return of 15.05% per annum since inception (again, as of 31 August).

Past performance is never a guarantee of future returns, of course. But even so, this track record, I believe, speaks for itself.

The post I own this ASX ETF for both growth and dividend income appeared first on The Motley Fool Australia.

During the Monday lunch hour today, shares in the mining software solutions provider are changing hands for $4.66 apiece.

That sees the RPMGlobal share price up a whopping 90.2% since 9 April. That's enough to turn an $8,000 investment into $15,216. In just five months.

We'll look at why the analysts at Taylor Collison expect more outperformance from the ASX 300 stock below.

But first…

What's been driving the outsized RPMGlobal share price gains?

Taking a look back at the price charts, RPMGlobal shareholders recently enjoyed two days of seriously outsized gains.

The first came on 27 August, when the RPMGlobal share price closed the day up 17.2%, trading for $3.88 apiece.

That followed the post-market-close release of the ASX 300 tech stock's full-year FY 2025 results on 26 August.

Investors sent the share price flying after the company reported a 6% year-over-year increase in gross operating revenue to $76.7 million. On the bottom line, the company's net operating profit of $2.2 million was up 311% from FY 2024.

But investors would have done well to buy the small dip in the RPMGlobal share price the following day when the stock closed at $3.77 a share. Because after emerging from a trading halt on 1 September, the RPMGlobal share price rocketed 22.8% to close the day at $4.63.

This big leg up came after the ASX 300 tech stock reported it had received a Non-Binding Indicative Offer (NBIO) from United States heavy equipment giant Caterpillar Inc (NYSE: CAT).

Caterpillar lobbed a bid of $5.00 per share, which implies an Enterprise Valuation (EV) of $1.05 billion

RPMGlobal entered into an exclusivity arrangement with Caterpillar and the board said it would recommend shareholders vote in favour of the takeover proposal barring a superior proposal.

Which brings us back to why Taylor Collison expects more short-term outperformance ahead.

ASX 300 tech stock tipped for more outperformance

Taylor Collison maintained its outperform rating on RPMGlobal shares and a $5.00 price target, in line with Caterpillar's takeover bid.

That represents a potential upside of 7.3% from current levels.

"With further validation of the growth pipeline, and confirmed corporate interest, we maintain our outperform recommendation," the broker said of its outlook for the ASX 300 tech stock.

According to the broker:

We cannot be certain but consider it unlikely CAT would find reason for not submitting a BSID [binding scheme implementation deed] post due diligence. We suspect that anything materially significant would already have come to light. Management's 1st September investor call confirmed 25 confidentiality agreements had been signed, allowing parties access to the "data room"…

Significantly, the flagship AMT product, which presently makes up ~37% of RUL's ARR [annual recurring revenue], was originally created as a solution for CAT to manage maintenance contracts in 2002. With AMT still used today in both CAT and competing fleets globally, CAT's understanding of the offering is likely well established.

The post Up 90% since April, why this ASX 300 tech stock is tipped to keep outperforming appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are rising:

4DMedical Ltd (ASX: 4DX)

The 4D Medical share price is up 33% to 76 cents. This morning, this respiratory imaging technology company announced that its ventilation-perfusion product, CT:VQ, has received U.S. Food and Drug Administration (FDA) 510(k) clearance. It notes that this represents a historic moment in respiratory diagnostics, as CT:VQ becomes the world's first non-contrast imaging modality capable of delivering quantitative ventilation and perfusion analysis directly from standard chest CT scans. CEO and Founder, Andreas Fouras, said: "FDA clearance of CT:VQ is a defining milestone for 4DMedical and for lung health. For the first time in history, doctors can order a lung perfusion scan without requiring their patients to be injected with any radioactive tracer or contrast media."

Genesis Minerals Ltd (ASX: GMD)

The Genesis Minerals share price is up 10% to $4.96. This follows the release of drilling results from its Laverton and Leonara projects. The gold miner's managing director, Raleigh Finlayson, said: "Genesis is focused on maximising financial returns and organic growth generates some of the strongest financial returns in mining. We have the assets and infrastructure to deliver this and that is why we have doubled our annual exploration budget. This investment is already delivering outstanding drilling results which illustrate the immense scope to grow the inventories at both Laverton and Leonora."

Harvey Norman Holdings Ltd (ASX: HVN)

The Harvey Norman share price is up 9% to $7.52. This appears to have been driven by a positive reaction to the retail giant's FY 2025 results from brokers. For example, this morning, the team at Citi responded to its results by retaining its buy rating and lifting its price target from $5.80 to $7.70.

RPMGlobal Holdings Ltd (ASX: RUL)

The RPMGlobal share price is up 23% to $4.64. The catalyst for this is news that the mining software company has received a takeover offer from US giant Caterpillar Inc (NYSE: CAT). An offer of $5.00 cash per share has been tabled. In response, RPMGlobal has entered into an exclusivity arrangement with Caterpillar. The company stated: "Subject to the parties entering into a binding SID on terms consistent with the Indicative Proposal and following completion by Caterpillar of confirmatory due diligence, the RPM Board intends to recommend the Proposed Transaction to RPM shareholders and to vote any RPM shares they hold in favour of the Proposed Transaction."

The post Why 4DMedical, Genesis Minerals, Harvey Norman, and RPMGlobal shares are charging higher appeared first on The Motley Fool Australia.

According to CNBC's Berkshire portfolio tracker, Buffett, as of 31 March, has US$347.7 billion in cash and cash-equivalent investments ready to go at Berkshire. That cash pile is worth more than the combined public stock portfolio of Berkshire right now (although not if combined with its private, unlisted investments). It's also the highest cash position Berkshire has ever had. Not a bad problem to have, all things considered.

But let's move from the factual to the hypothetical. If I had a cash pile as large as Warren Buffett's, what would I spend it on?

Well, apart from a nice house and perhaps a vintage Aston Martin DB5, I would, of course, buy stocks.

The ASX shares I would buy with Buffett's cash pile

I would be happy to spend a large chunk of the pile on a simple index fund tracking ASX shares, probably the Vanguard Australian Shares Index ETF (ASX: VAS). This exchange-traded fund (ETF) offers investors exposure to the largest 300 shares listed on the ASX, weighted by market capitalisation.

This is a great hands-off investment that will likely grow in line with the broader Australian economy over time, which I find appealing as a cornerstone investment.

Following VAS, I would then opt for some additional ASX shares that balance a supply of reliable dividends with some of the ASX's most exciting growth stocks.

For dividends, I would choose a mixture of Washington H. Soul Pattinson and Co Ltd (ASX: SOL), Coles Group Ltd (ASX: COL), Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), and National Australia Bank Ltd (ASX: NAB). These companies all have a strong history of providing hefty and steadily rising dividends, which is a trait Buffett himself often looks for.

I would add investments in TechnologyOne Ltd (ASX: TNE), REA Group Ltd (ASX: REA), and Xero Ltd (ASX: XRO) for some growth exposure too.

Never bet against America

But I wouldn't just stick with ASX shares. Warren Buffett himself has expressed his belief that the US markets, and the companies that reside on them, are the world's best. As such, I would probably invest more of that enormous cash pile into US stocks than those on the ASX.

My top priorities would be the companies that are leaders in their fields and have a long history of delivering for shareholders. I would start with the magnificent seven stalwarts Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), and Microsoft Corporation (NASDAQ: MSFT). I think these names are the best that the US currently has to offer, and have long growth runways still ahead of them.

Then, I would add quality names like Mastercard Inc (NYSE: MA), Netflix Inc (NASDAQ: NFLX), American Express Inc (NYSE: AXP), and Costco Wholesale Corp (NASDAQ: COST).

Perhaps I would also consider Caterpillar Inc (NYSE: CAT), McDonald's Corporation (NYSE: MCD), and Procter & Gamble Inc (NYSE: PG).

With these stocks, which range from growth engine companies like Mastercard to consumer staples fortresses like Procter & Gamble, I think I would have a portfolio that could look after my family's financial interests for the rest of my days.

Shame about the lack of a Buffett-style cash pile, though.

.

The post If I had a big cash pile like Warren Buffett, here's how I'd spend it in 2025 appeared first on The Motley Fool Australia.

Analysts at ANZ Group Holdings Ltd (ASX: ANZ) are tipping the US Fed to raise rates at a meeting later this week.

The S&P 500 Index (SP: .INX) slid 1.3% overnight, the Dow Jones Industrial Average (DJX: .DJI)slipped 0.77% and the Nasdaq Composite Index (NASDAQ: .IXIC) slipped 1.96% on Monday, US time.

What's ahead?

ANZ highlighted it is a "big week for both central banks and US equities" in a research report released this morning.

Among the US stocks due to report earnings are Apple Inc (NASDAQ: AAPL), Meta Platforms Inc (NASDAQ: META), Caterpillar Inc (NYSE: CAT), McDonald's Corp (NYSE: MCD), General Motors Company (NYSE: GM), United Parcel Service Inc (NYSE: UPS) and Alphabet Inc Class A (NASDAQ: GOOGL).

ANZ senior economist Felicity Emmett said these earnings announcements will provide a "micro overview of the macro economy". She added:

Investors bought into the 'soft landing' view in early 2023, despite the prospect of what could still be a bumpy ride for activity as the lagged effects of last year's interest rates front-loading and still-high inflation bite. 

Meanwhile, the United States Federal Open Market Committee (FOMC) is due to announce an interest rate decision on Thursday morning, Sydney time. ANZ is forecasting a 0.25% rate rise.

Commenting on this outlook, ANZ's Emmett said:

We expect a 25bp rate rise and anticipate that the Fed will caution against an early pause in the tightening cycle and certainly give the notion of cuts no rein.

Risk appetite could be vulnerable to a correction.

US stock market snapshot

Meta shares fell 3% on Monday and have shed 53% in the last year.

Apple Inc (NASDAQ: AAPL) shares lost 2% on Monday and have slid 18% in the last year.

Alphabet shares slid 2.74% on Monday and have tumbled 28% in the past year.

McDonalds shares dropped 0.58% on Monday but have climbed 4.41% in the last 52 weeks.

General Motors shares shed 4.37% on Monday and have slumped 31% in the last year.

Caterpillar shares fell 1.11% on Monday but have soared 29.74% in the past year.

The United Parcel Service share price lost 2.81% on Monday and has slid 12.48% in the last year.

Meanwhile, the S&P 500 Index has shed 11% in the last year, while the Dow Jones has lost 4% in a year and the Nasdaq Composite has shed nearly 20% in the past 12 months.

The post What to watch on the US stock market this week: ANZ appeared first on The Motley Fool Australia.

Such a long and steady track record shows that a company is financially stable and strong enough to fork out such a large volume of cash consistently.

Over on the US markets, there are many dividend aristocrats. Some you might have heard of include Caterpillar Inc (NYSE: CAT), Exxon Mobil Corp (NYSE: XOM), and McDonald's Corp (NYSE: MCD).

What's more, is that the US markets also boast quite a few dividend kings. These fabled royals of the share market have a 50-year streak of annually raising their dividends. This list is a lot smaller but includes Coca-Cola Co (NYSE: KO), Colgate-Palmolive Company (NYSE: CL), and Altria Group Inc (NYSE: MO).

Does the ASX offer any dividend aristocrats?

Unfortunately, here on the ASX, we have no dividend aristocrats by the US definition. Let alone dividend kings.

But we do have a couple of ASX dividend heavyweights that come close. And they are two shares that I think any investor could comfortably buy and hold for the long term.

The first is Brickworks Limited (ASX: BKW). Brickworks is a building and construction materials company. But it also has a few other earning streams, including from its lucrative property business.

Brickworks has a strong dividend track record. It hasn't raised its dividend for 25 consecutive years, so we can't call it an official dividend aristocrat.

But what it does have is a 45-year history of not cutting its dividends. In other words, Brickworks has either maintained or increased its annual dividends every year since 1976. Definity heavyweight material.

Soul Patts: 3 years to go

The second is Washington H. Soul Pattinson and Co Ltd (ASX: SOL).

Soul Patts is the closest thing to a dividend aristocrat the ASX has. No, Soul Patts hasn't quite got to 25 years of annual dividend raises. But it has upped its annual dividend every year since 2000. That means it's only three years away from becoming the ASX's first dividend aristocrat.

Soul Patts is a rather interesting company. It functions more as a listed investment company (LIC) than a traditional ASX business, owning large chunks of other ASX shares in a massive investment portfolio.

This it runs for the benefit of its shareholders. Soul Patts' largest holdings include TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC), and Brickworks itself.

But Soul Patts also owns a large and diversified portfolio of ASX 200 shares, thanks to the acquisition of ASX LIC Milton Corporation last year. These include your typical ASX holdings like BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA).

Both of these would-be ASX dividend aristocrats have a long history of delivering meaningful returns to their shareholders. And both boast unrivalled dividend records on the ASX, if not yet long enough to qualify for the 'dividend aristocrat' tag.

As such, Soul Pattss and Brickworks are two ASX dividend heavyweights that I would happily buy and hold until retirement and beyond.

The post 2 ASX 200 dividend heavyweights to buy and hold until you retire appeared first on The Motley Fool Australia.

Investors are breathing a sigh of relief on Dec. 2 following yesterday's Dow Jones Industrials (DJINDICES: ^DJI) 462-point decline. At 2:11 p.m. ET, the Dow Jones is up 680 points, or 2% higher, as investor worry about the Omicron variant of the coronavirus fades. Today's gains are broad, with 26 of the Dow Jones' 30 component stocks, including Boeing, higher today. 

Today's gains are led by aerospace giant Boeing (NYSE: BA), one of yesterday's worst performers. Shares are up more than 5% on both the reduced fears that Omicron will lead to broad travel bans and news that Chinese regulators are set to recertify the 737 MAX for commercial operation in that country. 

Following on Boeing's heels are payments and credit card giants Visa (NYSE: V) and American Express (NYSE: AXP), with shares up more than 4% on a hopeful outlook about the recovery of global travel and spending. Shares of yesterday's biggest loser, Salesforce.com (NYSE: CRM), are also up almost 3% today following yesterday's double-digit drop after giving underwhelming guidance for its fourth quarter. 

Today's worst-performing Dow stock is Apple (NASDAQ: AAPL), down more than 1% on rumors that demand for the iPhone 13 is falling. 

Boeing investors hopeful on China and continued travel recovery

Word first got out a couple of weeks ago that the Civil Aviation Administration of China (CAAC) was getting closer to letting the company's flagship, narrow-body jet return to commercial service. But a report in The Wall Street Journal on Thursday offered more detail, including what looks like a complete list of changes it requires Boeing to make. That's a serious step toward recertification that would also likely lead to a big jump in orders for Boeing aircraft to service Chinese markets after a multiyear freeze on sales to Chinese operators. 

Boeing's gains, exceeding most stocks today, weren't just a product of good news out of China. Like the other consumer and travel-related companies that gained sharply today, investors are also betting that travel and spending will continue to trend higher, and the initial worries about the Omicron coronavirus variant are probably overdone. 

Omicron bull market?

It seems that many investors believe that to be the case, with most of yesterday's biggest losers and many of the Dow Jones stocks that fell yesterday reporting gains. These include Visa and American Express, which have seen most of their in-country payment volume recover and surge past 2019 levels. However, both have seen cross-border transactions from travel continue to lag pre-COVID numbers. Investors also sent bank stocks up today, with Goldman Sachs (NYSE: GS) and JPMorgan Chase (NYSE: JPM) up more than 2.5% on hopes for continued economic health and the potential that interest rates will move higher sooner rather than later. That's a positive for lenders. 

Shares of Caterpillar (NYSE: CAT) and Walt Disney (NYSE: DIS) also gained more than 2.5% today, on expectations that businesses will continue to buy heavy equipment, and consumers will continue to spend and increasingly travel, ideally to Disney resorts and theme parks. Home Depot (NYSE: HD), one of yesterday's biggest winners, gained another 2% today as investors remain convinced that the home improvement giant will continue to win customers looking to improve their current home or update the home they just bought. Housing demand continues to remain sky-high, a positive indicator for the home improvement giant's prospects. 

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

The post Omicron what? Dow Jones shakes off fears, surges 680 points appeared first on The Motley Fool Australia.

Cathie Wood, the CEO of ARK Invest, is known for finding hypergrowth names with upside potential. The three largest holdings in ARK's six actively managed funds are Tesla, Square, and Teladoc. None of the three is cheap by traditional valuation metrics like price to sales (P/S) or price to earnings (P/E). But ARK believes that these companies, and others like them, will lead to a doubling of U.S. GDP to $40 trillion by 2035. 

By contrast, The Dow Jones Industrial Average (DJIA) will celebrate its 125^th anniversary on May 26. But while it's meant to reflect the entire U.S. economy, it doesn't exactly conjure an image of growth. In fact, the Nasdaq has given investors twice the return of the DJIA over the last five years.

Surprisingly, the four DJIA components that ARK owns -- Apple (NASDAQ: AAPL), Caterpillar (NYSE: CAT), Boeing (NYSE: BA), and Honeywell (NYSE: HON) -- are all relatively stable companies with histories of earnings growth, rather than up-and-coming rising stars. Here's why Cathie Wood likes these four Dow stocks, along with some surprising reasons she doesn't like a few others. 

1. Apple: $79.6 million

The ARK Fintech Innovation ETF (NYSEMKT: ARKF) owns 606,427 shares of Apple, which is worth nearly $80 million as of Apple's closing price on April 12. While this may sound like a lot, Apple is the fund's 24^th-largest holding and comprises less than 2% of its total value. ARK is a firm believer in mobile technology's increasing role in commerce, repeatedly noting the success of China's mobile payment system, so Apple's fintech developments like the Apple Card and Apple Pay make it a natural fit in ARK's Fintech ETF.

Augmented Reality (AR) is one of ARK's most closely followed trends. In its Big Ideas 2021 presentation, ARK called out Snapchat, Facebook, and Apple for increasing their investments in AR (all three companies are held in the Fintech Innovation ETF). ARK also supports Apple's decision to transition Macs to ARM processors. ARK believes ARM could become the new processor standard by 2030, displacing Intel and leading to further domination by AMD and NVIDIA. 

AAPL Total Return Level data by YCharts

2. Caterpillar: $75.6 million

Earth moving equipment manufacturer Caterpillar is the 15^th-largest holding in the ARK Autonomous Technology & Robotics ETF (NYSEMKT: ARKQ). After a strong market-beating year in 2020, shares of Caterpillar are currently right around their all-time high. In fact, Caterpillar is up over 25% so far in 2021, making it one of the best-performing stocks in the DJIA.

Caterpillar is an international company that generates over half its sales from outside the U.S. Global competition in the construction, mining, and energy industries is fierce, especially in China -- which is Caterpillar's hottest market. To stay ahead, Caterpillar is implementing machine learning and big data to help its customers better manage their fleets. Caterpillar has developed tools like Cat Connect and Cat Digital, which can be used for both existing and new equipment. 

3. Boeing: $22.5 million

Boeing is the 11^th-largest holding in the newly launched ARK Space Exploration & Innovation ETF (NYSEMKT: ARKX). As the world's second-largest maker of commercial airplanes and a leading aerospace company, Boeing has a clear role to play in the burgeoning space industry. Boeing's Defense, Space, and Security segment is a prime contractor for NASA's Space Launch System, a heavy-lift rocket for human space exploration. Boeing also builds satellites and software systems for commercial, military, and scientific exploration. 

4. Honeywell: $7.4 million

Honeywell is a minor holding, ranking 28^th in ARK's Space ETF. Honeywell manufactures and designs components for the commercial airline industry and the defense industry. However, its strides in the industrial internet of things (IIOT), which involves developing operational technology (OT) for industrial equipment, are right up ARK's alley. Honeywell would fit nicely into the ARK Innovation ETF (NYSEMKT: ARKK), the largest of its actively managed ETFs. But because the fund is centered almost entirely around tech stocks, that's unlikely to happen anytime soon.

Surprising Dow stocks ARK doesn't own

ARK's tech-centered focus may lead investors to assume it owns Salesforce and Microsoft, which are both Dow stocks. But it doesn't. The ARK Next Generation Internet ETF (NYSEMKT: ARKW) holds 53 securities, but not Verizon. And while five out of the DJIA's 30 components are financial companies, Ark's fintech fund holds none of them. Finally, the ARK Genomic Revolution Multi Sector ETF (NYSEMKT: ARKG) is focused heavily on healthcare, yet holds none of the DJIA's five healthcare stocks. 

Takeaways

Industrial stocks aren't often thought of as the most exciting sector on Wall Street. However, leading dividend-paying industrial stocks with growth potential have been handsomely rewarding investors for decades. Cathie Wood and her team think a handful of these names have bright futures in emerging industries. Honeywell and Caterpillar, in particular, stand out as two top-tier companies poised to raise their dividends and beat the market over the long term.

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

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