There aren’t many ASX shares that I’d be happy to invest $1,000 into every month.
There are plenty of shares that are quality businesses like Altium Limited (ASX: ALU), Pro Medicus Limited (ASX: PME) and Pushpay Holdings Ltd (ASX: PPH). But the share prices of those companies have performed so strongly since March I’m not sure I could commit to buying them every month. No business is a ‘buy at any price’.
The ASX shares that I’d be willing to buy every month are ones that usually trade at a reasonable valuation, have good long-term prospects and have a history of producing good returns for shareholders:
Share 1: Magellan Global Trust (ASX: MGG)
Magellan Global Trust is a listed investment trust (LIT) which invests in the best overseas shares.
Quality really shines through during tough economic times. I think you can definitely call this COVID-19 period a tough economic time.
Some of Magellan Global Trust’s biggest positions at the moment include: Alibaba, Alphabet, Atmos Energy, Microsoft, Tencent, Facebook, Visa, Mastercard, Reckitt Benckiser and Novartis.
You may have noticed there’s a focus on technology businesses within its holdings. I think this is good. Technology businesses have changed the world over the past decade and that’s likely to continue. Businesses like Microsoft and Alphabet are important players in the shift to cloud computing. Visa and Mastercard are integral for facilitating the big change to ecommerce (accelerated by COVID-19). And so on.
The ASX share’s net investment performance has been solid since inception in October 2017, returning 11.4% per annum – outperforming its global benchmark by more than 1% per annum.
At the current Magellan Global Trust share price it’s trading at a 4% discount to the net asset value (NAV).
Share 2: BetaShares Global Sustainability Leaders ETF (ASX: ETHI)
Many of the best shares in the world aren’t on the ASX. Indeed, the ASX only makes up 2% of the global share market. There are some great businesses out there in the world that are also doing their best to operate profitably and sustainably with an aim of doing the right thing for the climate.
This exchange-traded fund (ETF) is invested in around 200 businesses. None of them are involved in a number of excluded activities like gambling, tobacco, alcohol, junk food, destroying valuable environments and so on. This ETF particularly excludes businesses with direct involvement with the fossil fuel industry and it also excludes businesses with other bad climate credentials.
So what shares is it actually invested in? Its biggest holdings currently are: Apple, Nvidia, Mastercard, Visa, Adobe, Home Depot, Paypal, Netflix and Toyota.
I think this ETF is a good one to buy every month because it always trades at its net asset value, it’s a quality portfolio and the returns have been strong. Since January 2017 the ETF has returned an average of 20.7% per annum after fees.
Share 3: Wesfarmers Ltd (ASX: WES)
I think Wesfarmers is one of those ASX shares that you can invest in and leave for many years.
The conglomerate can trace its history back to 1914. It has great staying power. It’s an ASX share that you could have bought at almost any point over the previous decades and done well to date.
I think Wesfarmers’ solid performance can continue for two key reasons.
Its current group of businesses is a strong collection. Bunnings, Officeworks and Kmart are leaders in their respective retail segments. Online retailer Catch is growing at a fast pace, particularly due to the COVID-19 shift to e-commerce.
But I’m confident that I could continue investing in Wesfarmers into the future because it’s constantly evolving. The ASX share will happily invest in new businesses and divest old ones when it doesn’t suit to hold them any more, like its former coal assets.
At the current Wesfarmers share price it’s trading at 27x FY21’s estimated earnings.
Of the three potential ASX share investments it’s hard to choose between Magellan Global Trust and the BetaShares ETF. I like the investment flexibility that the Magellan Trust has, but the ETF’s costs are 0.76% cheaper per year and it has outperformed the Magellan Global Trust.
Where to invest $1,000 right now
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Tristan Harrison owns shares of Altium and MAGLOBTRST UNITS. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium and PUSHPAY FPO NZX. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX. 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.