Diversification is one of the key parts to an investment strategy with ASX shares. Mitigating risk whilst still attaining high investment returns is one of the best things you can do for your portfolio.
Being focused too much on one sector, such as banks, can be a problem. That's why I think the following two shares are good options for a strong portfolio:
Magellan Financial Group Ltd (ASX: MFG)
Magellan is a fund manager that focuses on investing in high-quality global shares.
By picking Magellan as a potential investment I'm saying that I think Magellan can continue to attract new funds into its current products at a good rate, grow the current funds at market-beating rates and come up with new products which can attract more funds under management (FUM).
The total superannuation pool is expected to keep growing at a relatively fast rate. That's why Magellan is trying to design a retirement product – this could attract even more funds with retirees needing a decent source of return for their capital.
It's currently trading at under 22x FY21's estimated earnings.
PM Capital Global Opportunities Fund Ltd (ASX: PGF)
If you're looking for an investment that can give exposure to global shares then this listed investment company (LIC) could be a solid option.
PM Capital Global Opportunities has generated a net return (before tax accruals / franking credits) of 11.4% per annum since inception and it currently has shares in its portfolio like Visa, KKR & Co, MGM China Holdings and Bank of America.
It has been steadily increasing its dividend since 2016, its current grossed-up yield is 4.5%. It's trading at a 14% discount to the net tangible assets (NTA) per share stated a week ago.
I like buying good shares at a discount, so being able to buy a quality LIC at a discount seems good to me.
Foolish takeaway
Both of these shares offer exposure to global shares one way or another. Magellan is a great fund manager with a good investment track record which is attracting a lot of new funds. PM Capital Global is an interesting LIC which could be a good one to hold for long-term dividend growth, so at the current prices it would be my preferred pick.
