This is a very interesting time to be investing in ASX shares with interest rates so low.
Interest rates have forced up the values of many shares on the ASX, particularly growth shares like Altium Limited (ASX: ALU) and defensive shares like Transurban Group (ASX: TCL).
There aren't many opportunities left, but I think there a still a few good ideas:
MFF Capital Investments Ltd (ASX: MFF) – $11,000
MFF Capital is one of the best listed investment companies (LIC) on the ASX in my opinion, it's run by Chris Mackay to target overseas shares.
It has been the best-performing LIC over the past five years with its large holdings of shares like Visa, MasterCard and Home Depot.
MFF Capital has a low fixed annual management fee, so the cost as a percentage reduces as MFF Capital grows in size which will make it seem more comparable with low-cost index funds.
It's trading at a 10% discount to the net tangible assets (NTA) at 5 July 2019. I'd be very happy to have MFF Capital as a large part of my portfolio over the next two decades.
Vitalharvest Freehold Trust (ASX: VTH) – $3,000
Many real estate investment trusts (REIT) have seen their share prices rise rapidly over the past year as expectations about interest rates levels went lower.
Vitalharvest is a REIT which owns farmland, currently all of which are leased to Costa Group Holdings Ltd (ASX: CGC), but it wishes to diversify its farms over time.
Vitalharvest earns an 8% yield on its farm value and also has a profit-share agreement with Costa. There have been some problems at some of the farms, which has sent Vitalharvest's share price down over 5% over the past year.
With a share price of $0.91, it's trading at a slight discount to its underlying NTA that was reported at the last reporting season.
WAM Microcap Limited (ASX: WMI) – $6,000
WAM Microcap is another LIC, except this one invests in the smallest businesses on the ASX, generally ones with market capitalisations under $300 million.
The smaller end of the ASX share market hasn't recovered as strongly as the ASX blue chips in 2019, so I think investing in one of the best ASX small cap managers could be a good way to get a diverse holding of small shares.
Since inception to the end of June 2019, the WAM Microcap portfolio has returned an average of 17.8% per annum before fees and expenses.
It's trading at a 5% discount to its June 2019 NTA and offers an attractive grossed-up dividend yield of 5.1%.
Foolish takeaway
I think each of these shares have the potential to beat the ASX index return over the next year and over the long-term at the current share prices. I really like how MFF Capital is set up, which is why I'd like to be a large holding in my portfolio, I think it could be a top performer for a long time to come.
