Sharesight is a portfolio tracker that is integrated into Morningstar Investor. Their data shows the top 20 trades by Morningstar users in June 2023. Here’s what our analysts think about the top three buy trades.

Top 20 trades sharesight

Westpac (ASX: WBC) ★ ★ ★ ★

Of the big 4 banks, Westpac is the most attractive according to our banking analyst, Nathan Zaia. It’s trading at a meaningful discount to our AUD 28 fair value estimate. We award Westpac a wide-moat – this means our analysts believe the bank has a sustainable competitive advantage that will last for at least the next 20 years. Westpac has lost market share in home loans and fallen short of cost-saving targets, but we think the bank will improve on both fronts over time.

Despite intense competition, we expect margins to benefit from a large customer deposit funding base. Westpac is Australia's second-largest lender, number two in mortgages and number three in business loans.

Funding cost advantages should allow the bank to reprice loans and generate better margins as smaller banks struggle to make a decent return on equity given higher wholesale funding costs. Market share has stabilised in recent months, supporting our confidence there are no serious loan approval issues. Westpac has surplus capital, is well provisioned, and pays generous fully franked dividends.

Vanguard Australian Shares Index ETF (ASX: VAS) – Bronze 

Our analysts believe that this ETF is a compelling choice for core Australian equity exposure, awarding it a Bronze medallist rating. Our ratings are based on expectations for risk-adjusted future performance comparative to a category benchmark, instead of how well funds have performed in the past.

A diversified index that captures the investment opportunity set well, a highly competitive fee, and Vanguard's well-recognized index tracking and trading efficiencies are the drivers of our continued vote of confidence in the strategy.

When looking at funds, one of the biggest questions is whether to go active or passive. The low price of this strategy sets a significant hurdle for active managers in the same space when looking at net-of-fee returns over the long term. However, our analysts believe that Morningstar’s best-rated active managers can add value and cross that hurdle consistently.

CSL Limited (ASX:CSL) ★ ★ ★

CSL is trading within a range that we consider fairly valued. CSL is one of three tier one plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated as plasma sourcing is a key constraint in production. The plasma sourcing market is currently in short supply, however, CSL is well positioned having invested significantly in plasma collection centres, owning roughly 30% of collection centres globally.

We award CSL a narrow moat rating based on the cost advantage afforded by its large-scale plasma collection and fractionation (this is where the various components of blood plasma are separated). CSL also possesses intangible assets based on the intellectual capital in its existing products and the proven success of its R&D efforts over time. The industry has high barriers to entry as plasma fractionation has long lead times, taking approximately seven years to be built and approved. Fractionation is also a complex process that requires significant expertise and scale to be performed cost-effectively.