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Where I’d invest $10,000 into ASX shares

I think there are also some ASX shares that are worth buying on the stock exchange.

Which ones are worth buying may change each month based on how much their share prices move, but my overall watchlist doesn’t change.

As the dust settles after the Australia election, I think the following ASX shares could be worth buying:

Altium Limited (ASX: ALU) – $2,000

I think that Altium, an electronic PCB design software business, may be one of the best businesses on the ASX to own. It is delivering exceptional organic growth, it has a multi-year growth runway because of the Internet of Things, it has high-quality clients, zero debt on its balance sheet and it’s growing its profit margins. The dividend keep growing for shareholders at a nice double-digit pace.

Since 1 May 2019 the Altium share price is down 12%, so I think its valuation is more compelling at the moment as investors are nervous about the FAANG share valuations.

It certainly isn’t cheap trading at 44x FY20’s estimated earnings, but most good businesses are expensive at the moment.

Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE) – $2,000

Asian valuations are heading lower again as negativity builds about the trade war between China and the US. The tariffs don’t seem to be going away as neither side wants to give in.

Over the long-term I believe countries like China, India, Taiwan and so on will be much larger contributors to the global economy, so it’s worth owning Asian businesses as part of your portfolio such as Tencent, Alibaba, Samsung and Baidu.

I think there are higher governance risks in Asia compared to western companies, which is why I’d only allocate a smaller part of my portfolio to this Asian exchange-traded fund (ETF) offered by Vanguard. I will personally not want to add more of this ETF to my portfolio if it’s at my limit of 10% for the whole portfolio.

MFF Capital Investments Ltd (ASX: MFF) – $2,500

I think one of the best listed investment companies (LICs) on the ASX is MFF Capital. It invests in overseas shares, giving the LIC a much larger investment universe to consider compared to ASX-only LICs.

It has been a very high-performing LIC, perhaps the best, since the GFC thanks to its large positions in high growth businesses like Visa and MasterCard.

Thankfully it is also one of the cheapest-costing LICs due to its fixed level of management fees that get smaller as a percentage of the net assets every year.

It’s currently trading at a 6% discount to the pre-tax net tangible assets (NTA) declared at the end of last week.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) – $3,500

Soul Patts is perhaps my favourite business on the ASX. It’s an investment conglomerate that has been operating for over a century. It takes the long-term view with all of its investments and takes a value, conservative approach.

One of its largest positions, New Hope Corporation Limited (ASX: NHC), has seen its share price fall by 40% since the middle of March, which has also impacted the Soul Patts share price. The fact that the TPG Telecom Ltd (ASX: TPM) merger also hasn’t gone through (yet) is acting as a drag on the Soul Patts share price as well.

I think the current weakness with the above two holdings may mean now could be a good time to jump on some Soul Patts shares.

It currently has a grossed-up dividend yield of 3.6%.

Foolish takeaway

I think it’s a good time to be buying Soul Patts shares. With zero debt on the balance sheet, Soul Patts is well-placed to deal with anything that comes along economically.

If I had another $3,000 to invest then these great ASX shares would be right at the top of my wishlist.

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Tristan Harrison owns shares of Altium, Magellan Flagship Fund Ltd, VANGUARD FTSE ASIA EX JAPAN SHARES INDEX ETF, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company 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.

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