MENU

Who else wants to diversify their portfolio?

Don't put all your eggs in one basket...

Getting diversification right for your portfolio is one of the best ways to deliver strong returns. Diversification can mean spreading your investments across industries and geographies.

It’s a good idea to expand your portfolio into companies that operate in different industries. If you invest like everyone else, then you’ll get similar results.

Here are three shares that I think would help diversify a portfolio:

Apiam Animal Health Ltd (ASX: AHX)

Apiam is a regional veterinary business that owns 42 clinics and one joint venture equine clinic.

There are three ways that Apiam is growing.

It is growing nicely though organic growth which it reported was 4.3% to May 2018. This is being helped by a growing market for livestock services, which could increase as food exports rise.

Apiam is growing through acquisitions, it added six clinics during FY18, which was a 17% increase in the number of clinics.

The final growth avenue is opening vet clinics inside regional Petstocks, such as in Bendigo.

Apiam has provided guidance that FY18 revenue will be 8.7% higher and the earnings before interest, tax, depreciation and amortisation (EBITDA) margin is going to increase from 9% to 9.4%.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is an international-focused listed investment company (LIC). It has been one of the highest-performing LICs by investing in some of the world’s best businesses.

Its top holdings are likely to continue to perform for MFF Capital. For example, Visa and MasterCard together made up 27.4% of MFF’s assets at the end of June 2018. The world is increasingly going cashless and this is going to help the two card companies continue to grow.

I think nearly every Australian investor needs more exposure to international shares.

MNF Group Ltd (ASX: MNF)

MNF is a leading voice over internet protocol (VoIP) provider that is winning important, long-term customers to its systems. Two of its major customers includes Skype and Uber.

The company is experiencing impressive organic growth but it is also making moves to expand into other areas. It recently acquired a Singapore business so that it can expand there and it’s launching an over-50 telco brand called Pennytel.

Investors don’t seem to like the Pennytel idea, but it could turn into a good segment for MNF if it takes off and generates a profit.

Foolish takeaway

These three shares are very different to the normal holdings you’d find at the large end of the ASX index. I believe all three will soundly outperform the index over the next five years due to the relatively little growth on offer by the index’s largest constituents.

Another way to diversify your portfolio would be to invest in this top share which is the leader in its industry and is expanding into Asia.

The best dividend stock to buy in July

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of Apiam Animal Health Ltd and Magellan Flagship Fund Ltd. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. 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 Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.