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Where I would invest $10,000 in the ASX

Last month the Reserve Bank of Australia held the cash rate on hold at the record low of 1.5% for yet another month.

While there’s no meeting in January, if there had been one it would almost certainly have been the same story. In fact, I wouldn’t be at all surprised if the cash rate remains at this record low for the entire year.

Which unfortunately is not good news for savers. In light of this, if I had $10,000 sitting in a savings account I would consider investing it in the share market.

Here are three shares which I think could provide returns that smash the interest rates on offer from savings accounts:

A2 Milk Company Ltd (ASX: A2M)

I’ve been very impressed at the progress a2 Milk has made in the lucrative China market. But despite the incredible growth of its infant formula product sales in the nation, its market share is still only in the low single digits. I expect new regulations that came into place on January 1 will reduce competition in the market, allowing a2 Milk to grab more share. This could lead to bumper profit growth over the next few years that more than justifies the premium its shares trade at today.

Collins Foods Ltd (ASX: CKF)

A weaker than expected half-year report has led to Collins Foods’ shares trading at a significant discount to their 52-week high. Furthermore, it means that its shares now provide a trailing fully franked 3.1% dividend which I feel has significant room to grow over the next few years thanks to its international expansion and low payout ratio. All in all, I think Collins Foods could be a good buy and hold investment option for investors.

Corporate Travel Management Ltd (ASX: CTD)

Another share which is trading well below its 52-week high is Corporate Travel Management. After a strong gain last year, profit taking has weighed heavily on the travel company’s shares since the start of November. In my opinion, this has left its shares trading at a very attractive level. Especially given its bright long-term growth prospects in a highly fragmented corporate travel industry.

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Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia owns shares of A2 Milk. 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 Bruce Jackson.

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