2 ASX shares I would use for a starter ASX portfolio

Here’s why I would choose these 2 ASX shares for beginners to buy for an ASX starter portfolio

| More on:
asx 200 open represented by feet standing at the start line

Image source: Getty Images

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!

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Facebook, Magellan High Conviction Trust, Procter & Gamble, and Visa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Facebook, and Visa. The Motley Fool Australia has recommended Alphabet (A shares) and Facebook. 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.

More on ⏸️ Shares for Beginners