Making your first investment can be both incredibly daunting and rewarding. If I were to go back in time to my very first investment, my approach would be to invest in blue-chip, large-cap S&P/ASX 200 (INDEXASX: XJO) shares. The focus here is not on your typical big four banks, but rather shares that have a strong track record and/or sector tailwinds.
So, in that vein, here are 3 ASX 200 shares that have performed strongly in both the short and long term and could be worthy of your first investment.
1. Magellan Financial Group Ltd (ASX: MFG)
Magellan Financial Group is a funds management businesses that also offers international investment funds to high net worth and retail investors in Australia, New Zealand and institutional investors globally.
As Magellan is a fund manager, it is important to observe MFG's monthly updates regarding its funds under management inflows/outflows and the overall state of the global equity market. The more inflow of capital it gets, and better financial market conditions, the more profitable Magellan is.
Magellan is arguably one of the best fund managers out there. Its quality can be reflected in its share price, which soared by more than 150% in 2019. The company has enjoyed strong performance in its global equity and infrastructure strategies, despite challenging market conditions. In FY19, Magellan's average funds under management increased 28% to $75.8 billion, management and services fees rose by 22% to $472.5 million and profit before tax and performance fees rose by 29% to $376.2 million. Magellan also pays a 3.4% dividend yield.
2. Computershare Limited (ASX: CPU)
Computershare primarily provides stock registration and transfer services to companies listed on stock markets, but also offers technology services for stock exchanges, investor services for shareholders and employee share plan management across more than 20 countries.
The company provides necessary services to investors and institutions alike, while also expanding its service verticals to include mortgage services in the United States and the United Kingdom. Computershare has seen quality recurring revenues and consistent high returns with a recurring revenue compound annual growth rate (CAGR) of 8.4% for the past 10 years.
Computershare would represent a reliable, slow-moving, long-term investment that also pays investors a 2.6% dividend.
3. BHP Group Ltd (ASX: BHP)
BHP is the second largest mining company in the world behind British-Swiss miner, Glencore. The company is a diversified natural resources company producing commodities including petroleum, copper, iron ore, metallurgical coal, energy coal and nickel.
There has been a strong lift in commodity prices across the board in 2019. Notably, iron ore prices skyrocketed in 2019 following the tailings dam collapse in Brazil, halting production of the world's largest iron ore miner, Vale SA. This resulted in the iron ore spot price soaring from US$70 per tonne to a peak of US$120. Iron ore prices have normalised, but still sit at an elevated US$90 per tonne. Strong commodity prices can be reflected in BHP's net profit, which increased 124% in FY19.
The commodity markets are expected to remain strong, which can provide further tailwinds for BHP in 2020. BHP also pays a 4.9% dividend.
