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10 FY21 ASX share picks revealed by Bell Potter

Top 10

We have just entered FY21 and there are plenty of ASX share investment opportunities.

Bell Potter is one of the leading brokers in the country, with Bell Financial Group Ltd (ASX: BFG) being the parent company.

The broker released the names of lots of different opportunities in different sectors, both large caps and small caps. So, I’m going to cover 10 of them in this article:

Banks 

Share 1: Macquarie Group Ltd (ASX: MQG)

Why it’s a pick: The global investment bank has $25 billion of capital to be deployed into infrastructure and other assets. If it weren’t for COVID-19 then the profit could have been up 4% in FY20.

My view: Macquarie is one of my preferred ASX share blue chips for its international growth and quality.

Share 2: Commonwealth Bank of Australia (ASX: CBA)

Why it’s pick: Bell Potter thinks that underlying CBA income should be stable with sufficient capital on the balance sheet. Asset sales are lifting its CET1 ratio. There could still be a $1 per share dividend paid in August.

My view: CBA is my preferred ASX bank share. Quality is key to thrive through periods like this.

Diversified financials

Share 3: Afterpay Ltd (ASX: APT)

Why it’s a pick: It’s in an upgrade cycle. Continued success at integrating with other e-commerce players like Visa, Mastercard and so on will be important. Geographic expansion will help too, such as growth into Canada.

My view: At a share price above $62 I’m not sure Afterpay represents good value. It has run really hard and margins could come under pressure in the future.

Shares 4, 5 and 6: Janus Henderson Group (ASX: JHG), Pendal Group Ltd (ASX: PDL) and Perpetual Limited (ASX: PPT)

Why it’s a pick: These fund managers seem relatively cheap ASX shares, they still pay healthy dividends and are about to show a good increase in funds under management (FUM) as share markets had a strong quarter to 30 June 2020.

My view: I agree that these fund managers could prove to be performers over FY21 as share markets recover. However, I’m not sure about the long-term as passive investing continues to capture a lot of fund flow.

Listed investment companies and trusts (LICs and LITs) 

Share 7: MFF Capital Investments Ltd (ASX: MFF)

Why it’s a pick: Low operating fees, a large cash balance and a big franking credit balance could help deliver good returns over the next 12 months.

My view: I concur, I have said for a long time that MFF Capital is one of the best LICs out there. Chris Mackay is a great portfolio manager.

Share 8: Magellan Group Trust (ASX: MGG)

Why it’s a pick: The ASX share can provide investors with diversification whilst also being focused on the biggest and best internet, ecommerce, technology and payment companies. It produces strong returns and is trading at a discount to its assets. 

My view: I believe the LIT could be one of the best-performing ones over the next decade. The Magellan team are great investors and are capable of consistently outperforming the benchmark and peers.

Share 9: WCM Global Growth Ltd (ASX: WQG)

Why it’s a pick: The LIC has delivered a strong performance over the past 12 months, yet it’s trading at a sizeable discount to its net assets. The LIC is well positioned for whatever happens next with COVID-19. For example, its largest holding at the end of May 2020 was Shopify.

My view: I love buying ASX shares for less than they’re worth. I like the idea of buying quality LICs trading at an attractive discount, particularly when they’re invested in great shares themselves.

Agriculture

Share 10: Rural Funds Group (ASX: RFF)

Why it’s a pick: The agricultural real estate investment trust (REIT) is shifting to natural resource assets which are appreciating rather than depreciating in value, which also have market linked rental reviews. Over time Bell Potter expects favourable asset revaluations and growth in rental income as capital is deployed in newly acquired assets.

My view: Rural Funds is favourite REIT of the sector. I think it has pleasing income growth qualities as well as a solid tenant base. It may have the best chance in the sector of increasing its distribution over the next 12 months.

Where to 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 are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd, MAGLOBTRST UNITS, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.

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