For many investors, the idea of active investing is hard to get their minds around. Not only that, but for many it can be a financially dangerous idea. It takes a high level of research and knowledge to consistently pick good S&P/ASX 200 Index (ASX: XJO) shares to invest in. However, there are passive options for investing. In other words, companies that do the investing for you.
These 3 options are among some of Australia’s best investment managers. They all have long track records of achievement and manage a number of the leading funds, ETFs and listed investment companies in the ASX 200 today.
Magellan Financial Group Ltd (ASX: MFG)
Magellan is one of my favourite investment managers and runs some very profitable listed and unlisted equities funds. The company has grown its share price an average of 52.7% every year and has recently announced a 40% stake in a new Australian investment bank, Barrenjoey Capital Partners. Magellan is truly a funds management powerhouse with a bright future and an impressive past.
This ASX 200 fund manager has a current price to earnings ratio (P/E) of 26.59, and a current trailing 12 month dividend yield of 3.7%. If the company continues to grow at the rate it has done over the past decade it will double any initial investment within 2 years.
Charter Hall Group (ASX: CHC)
Charter Hall is an ASX 200 company specialising in the real estate sector. It manages a number of real estate investment trusts (REITs) that are very defensive. However, it also delivers high distributions to unit holders. For example, the company owns the Charter Hall Retail REIT (ASX: CQR), specialising in convenience retail in regional or sub regional markets. Another interesting REIT is the Charter Hall Long WALE REIT (ASX: CLW).
This company also has impressive historical performance. Nevertheless, it is the FY20 performance that captured my attention. It managed to increase its funds under management by 33% during the coronavirus pandemic, which demonstrates good management acumen.
WAM Capital Limited (ASX: WAM)
Unlike the first two, WAM Capital is an ASX 200 listed investment company (LIC) managed by Wilson Asset Management Pty Ltd. However, it has had a very good track record and is worth including in anything relating to passive investing.
Since inception in August, 1999 the WAM Capital LIC has beaten its benchmark, the All Ordinaries Total Return Index (ASX: XAOA), by 7.8%. The fund sold down illiquid small caps in February, and took advantage of the March selloff. This included participating in 27 capital raisings with an average gain of 26%.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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