If I were given $25,000 to invest into ASX shares today, I’d make sure I picked quality long-term growth shares.
In the current investment environment, I believe that we need to be careful and avoid shares that may suffer significantly during a downturn.
That’s why I’m attracted to the following ASX shares:
Magellan Global Trust (ASX: MGG) – $8,000
Magellan Global Trust is a listed investment trust (LIT) operated by Magellan Financial Group Ltd (ASX: MFG) that invests in high-quality international shares on behalf of shareholders.
Since the GFC the Magellan investment team have been one of the most consistent outperformers of the global share index, which makes it attractive as high-performers are unlikely to turn rubbish overnight.
It does invest in high-quality growth shares like Alphabet, Facebook, Visa and MasterCard which have proven to be good investments. Its cash weighting of around 20% is very useful in a downturn as it provides protection and allows Magellan to buy beaten-up shares.
WAM Microcap Limited (ASX: WMI) – $7,000
When markets go through volatile periods it’s the small caps that are usually damaged the most because liquidity can dry up. So, even though WAM Microcap’s holdings may have been hurt I think over the long-term that could mean they deliver stronger returns because they’re now starting from a lower position.
WAM Microcap is only invested in good businesses to start with and the large cash level of 37% of the portfolio at the end of November 2018 provides ample downside protection which can be deployed into lower-priced opportunities.
A bonus over time could be the growing dividend income that WAM Microcap aims to pay, it currently has an ordinary grossed-up dividend yield of 4.4%.
InvoCare Limited (ASX: IVC) – $6,000
InvoCare may operate in one of the most defensive industries on the ASX. It’s a funeral operator, there are only two things certain in life after all – death and taxes.
It has an enviable market share of around a third and is planning to grow that with its regional acquisition strategy and its refurbishment plan to brighten its portfolio of locations, which should lead to sustainable organic growth.
It’s trading as cheaply as it has done since a brief market meltdown in 2016. A fall in the death rate will likely be temporary, so now could be a good time to buy shares.
Paragon Care Ltd (ASX: PGC) – $4,000
Paragon is a leading distributor of healthcare products like beds, equipment and devices to clients such as hospitals.
People don’t choose when they get sick or need to go to the hospital, so demand for Paragon’s consumable products should remain steady over the medium-term.
In-fact, over the long-term it could experience solid organic growth with Australia’s ageing population. The number of people over-65, which is the group most likely to need medical care, is projected to grow by 40% over the next decade.
It’s hard to pick a favourite out of the above four, they are all compelling for different reasons.
I certainly think they will create better investment returns than Commonwealth Bank of Australia (ASX: CBA) over the next decade.
Motley Fool contributor Tristan Harrison owns shares of InvoCare Limited, MAGLOBTRST UNITS, Paragon Care Limited, and WAM MICRO FPO. The Motley Fool Australia has recommended InvoCare Limited and Paragon Care 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.