FY20 is about to start, so I think it’s a good time to consider what shares are good value now and could perform well over the next year.
Some of the best growth shares and yield shares are trading expensively, but I still think there are plenty of options such as the ideas below:
Vitalharvest Freehold Trust (ASX: VTH) – $3,000
I think the rush for yield has left out one of the most promising real estate investment trusts (REITs). Vitalharvest owns berry and citrus farms, it will be focusing on plant-based acquisitions in the future as well.
Its current farm portfolio is leased to Costa Group Holdings Ltd (ASX: CGC) which it has a profit-share agreement with, so it benefits (or suffers) with whatever Costa achieves.
Costa has warned that it is suffering from fruit flies near its citrus farms and crumbly berries at some of its berry farms. However, I think the next few months could be a good time to buy Vitalharvest shares with these farm issues on investors’ minds and if RBA interest rates keep falling which could send yield plays, like Vitalharvest, up in value.
Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE) – $2,000
The Asian region could be the best place to be invested on a region basis over the next few decades. The size of the Asian middle class is growing rapidly and each family is becoming wealthier over time, meaning that many parts of the Asian economy should benefit from growing demand such is banking, insurance, travel, entertainment, media and so on.
This exchange-traded fund (ETF) gives investors exposure to almost 900 Asian businesses for an annual management fee of only 0.40%. Despite the underlying ETF’s earnings growth rate being above 10%, the ETF’s price/earnings ratio is only 12.6x, so it’s quite cheap on a PEG ratio basis.
I think there’s a fair chance President Trump will try to get a deal done before the US election next year, which could be a boost for this ETF if it happens. However, I think it is worth monitoring what happens in the fallout of Baoshang Bank collapsing.
WAM Global Limited (ASX: WGB) – $5,000
I always like to buy shares at a clear discount to the underlying value. WAM Global is a listed investment company (LIC) which invests in international growth businesses that are thought of by the Wilson Asset Management investment team as undervalued.
Some of the names it’s invested in include Alphabet, American Express, Bandai Namco, Danone, Diageo, HCA Healthcare, Logitech and Reckitt Benckiser.
It’s trading at a 12% discount to the net tangible assets (NTA) declared at the end of May 2019 and I think it’s quite likely the NTA has risen further with the MSCI international index rising a few percent during June.
It doesn’t pay a dividend yet but it will hopefully start paying one soon.
I think each of these businesses have very good prospects for FY20. Over the longer-term I think it could be wise to look away from the ASX for opportunities, which is why I’m putting so much of my theoretical $10,000 into WAM Global at the current discount.
If I had more money to invest I would definitely one to consider one of these exciting ASX growth shares.
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Motley Fool contributor Tristan Harrison owns shares of COSTA GRP FPO, VANGUARD FTSE ASIA EX JAPAN SHARES INDEX ETF, and WAMGLOBAL FPO. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. 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.