After the market turmoil that March brought to the S&P/ASX 200 Index (ASX: XJO), an eerie sense of calm has swept across the share market. As share prices are still relatively lower across the board than they were over January and February, and market volatility seems to have subsided, I have noticed that many people who have never invested in ASX shares before are now showing an interest.
This is great news! Here at the Fool, we think everyone should be trying their hand at investing as an exercise in building long-term wealth. As such, I think it’s a great time to consider constructing a starter ASX portfolio.
The 2 shares I have selected below are both ‘passive’ vehicles, which means there’s little research and effort that will go into a buy decision compared with individual ASX shares. In this way, I think they are great shares a beginner can start a portfolio with.
Magellan High Conviction Trust (ASX: MHH)
Magellan High Conviction Trust is a listed investment trust (LIT) that aims to pursue a concentrated portfolio (8-12) of the shares Magellan views as the ‘best in the world’. As such, you are getting names like Microsoft, Facebook, Visa and Alphabet (Google) all in 1 investment.
Since it’s a managed investment on your behalf, you are letting the fund manager invest in these shares, choosing new investments or letting old ones go – all while you go ahead and live your life.
Magellan High Conviction Trust aims for capital growth over time, while also targeting a 3% cash distribution every year, which you can either choose to reinvest at a 5% discount or collect as a stream of passive income.
iShares Global 100 ETF (ASX: IOO)
This exchange-traded fund (ETF) works a little differently to MHH by purely selecting 100 of the largest global companies and holding them on your behalf. Some of its current top holdings are Microsoft, Apple, Amazon, Nestle and Procter & Gamble. There’s not really a fund manager trying to pick winners or root out losers, as with Magellan’s fund. In this way, it is a little more passive, but also comes cheaper as a result.
It is predominantly weighted towards American companies, but this merely reflects the fact that the world’s largest companies largely heil from the US. That said, there is also significant presence from the UK, Switzerland, France, Germany and Japan.
I think following the world’s largest companies all in 1 investment is a great way to start an investing career and thus, I think this ETF is another top place to start!