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Top 3 ASX shares for beginners to buy

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As a beginner investor, it can be very hard knowing where to start with shares. There are literally thousands of share options to choose from.

However, I certainly don’t think the huge amount of choice should mean you need to get stuck in analysis paralysis.

The first ASX shares I’d want to invest in as a beginner are ones that are easy to understand, can provide good returns and you could hold for the rest of your life if you wanted to. It would be unfortunate for your first experience to be high-risk and result in you losing your money.

Therefore, I think these three ASX shares are worthy considerations:

Australian Foundation Investment Co.Ltd. (ASX: AFI)

Diversification is important unless you’re a professional investor, so AFIC could be a good starting point. Its job for almost a century has been to invest in other ASX shares and pass most of the returns generated onto AFIC’s shareholders with a reliable dividend.

AFIC’s portfolio includes many of Australia’s biggest companies like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and BHP Group Ltd (ASX: BHP). Another benefit of owning AFIC is that it has a very low annual management fee cost compared to most managers, with no performance fee.

It currently offers a grossed-up dividend yield of 6.4%.


The ASX only makes up 2% of the world’s stock market, so you might want to invest in shares across the world with this exchange-traded fund (ETF).

If you invest in this ETF, you get exposure to almost 1,600 businesses from many countries like the US, Japan, the UK, France, Canada, Germany, Switzerland, Hong Kong, the Netherlands and so on.

The annual management fee of this ETF is only 0.18% per annum. I’d be fairly comfortable with this ETF being a major portion of my wealth.

Magellan Global Trust (ASX: MGG)

One of the best investment management firms in Australia is Magellan Financial Group Ltd (ASX: MFG), which runs the Magellan Global Trust and focuses on the highest quality businesses in the world.

Magellan Global Trust owns great shares like Visa, MasterCard, Alphabet (Google), Apple, Facebook and Oracle.

Since inception in October 2017, the Magellan Global Trust portfolio has outperformed the MSCI World Net Total Return Index by an average of 2.4% per annum (after all fees and expenses) by returning an average of 16.9% per annum, although the next couple of years probably won’t be as good as that.

Foolish takeaway

I would be very happy for each of these businesses to play a major part in my portfolio. Indeed, Magellan Global Trust is one of my largest holdings. At current prices, I would go for the Magellan Trust because of how consistently it has outperformed the global share market.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of February 15th 2021

Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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