I'd invest $5,000 into these excellent ASX shares for the long term

Each of these ASX shares seem like great ideas to me.

| More on:
Young female AGL investor leans back in her desk chair feeling relieved after the AGL share price soared today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The fund manager Australian Ethical is benefiting from regular superannuation contributions
  • Ansell is now trading at very good value, with profit growth forecast for the coming years
  • BetaShares Global Sustainability Leaders ETF has a portfolio of 200 businesses that rank well on ESG factors

The ASX share market has significant investing opportunities to consider, with some of them potential market-beaters at today's prices.

I don't think that day trading is an effective investment strategy. But I think it's possible to find attractive long-term investments, as well as ones that have been materially mispriced which could take a month, a year, or longer to re-price.

If I had $5,000 to invest today, these are three that I'd happily put my money into.

Australian Ethical Investment Ltd (ASX: AEF)

Australian Ethical is one of the most interesting fund managers. I don't think there are many ways to 'play' the growing superannuation theme, nor are there many investments that are focused on gaining exposure to the green investing theme. However, Australian Ethical could capture the benefits of both of these themes.

It offers funds to enable investors to align their investments with their ethics. Australian Ethical offers superannuation for people to use and that's the segment that's seeing significant growth.

Remember that people regularly contribute to their super thanks to mandatory superannuation contributions in Australia (as well as the tax-beneficial nature of superannuation). This provides attractive, regular inflows for the fund manager.

I also think this ASX share looks much better value after Australian Ethical's share price decline of 45% over the last six months. Certainly, ongoing exposure to superannuation should help drive underlying profitability higher in the coming years.

Ansell Limited (ASX: ANN)

Ansell is one of the world's largest manufacturers of safety gloves used for a variety of household, industrial, scientific, and medical purposes.

I think Ansell is one of the unsung global leaders on the ASX. The Ansell share price has dropped 36% since mid-June 2021. It benefited from huge demand during COVID-19 but now its valuation has come down to a more sustainable level.

In the FY23 half-year result, Ansell said that its sales of $835.3 million showed "strong growth in industrial more than offset by lower healthcare sales". This led to an overall decline in organic constant currency terms of 11.5%.

However, I think the 6.4% underlying industrial revenue growth bodes well for the business once it's not cycling against strong COVID demand.

Despite the sales decline, the earnings before interest and tax (EBIT) margin improved by 120 basis points (1.20%) in organic constant currency terms.

Based on Commsec estimates, Ansell is valued at 16 times FY23's estimated earnings and 15 times FY24's estimated earnings. Earnings growth is expected again for the ASX share in FY25.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This is one of my favourite exchange-traded funds (ETFs) for achieving global diversification.

The idea behind this ASX ETF is that it is invested in a portfolio of 200 businesses that are among the world leaders when it comes to doing the right things in terms of environmental, social, and governance (ESG) factors.

It also excludes a variety of industries from the portfolio including fossil fuels, gambling, alcohol, weapons and other businesses of that nature.

I think it's quite a cheap ETF considering the exclusion process that it follows — its annual management fee is 0.59%.

Around 70% of the portfolio is invested in US-listed businesses, but countries like Japan, Switzerland, the Netherlands, Germany, the UK, and others also have a sizeable allocation.

Looking at the current portfolio, these are some of its biggest positions: Visa, Home Depot, Nvidia, Apple, Mastercard, and Toyota.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Australian Ethical Investment, Mastercard, Nvidia, and Visa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard, long March 2023 $120 calls on Apple, short January 2025 $380 calls on Mastercard, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Ansell, Apple, Australian Ethical Investment, Mastercard, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Happy woman looking for groceries. as she watches the Coles share price and Woolworths share price on her phone
Opinions

Why I bought this ASX 200 stock instead of Woolworths

I decided to put this stock in my shopping basket over Woolies.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Invest $12,000 in Woodside stock and get $5,700 in passive income

Reliable dividend shares are everywhere on the ASX. Here's how you could use that to your advantage.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Cheap Shares

1 secretly cheap ASX 200 stock I'm buying for the long run

The best performer on the index last year has had a poor start to 2024. Let's examine whether this is…

Read more »

ventilator mask
Opinions

Here's why I think the Resmed share price should be 18% higher

Just because a company's share price has gone up doesn't mean it's no longer good value.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Index investing

3 top ASX index funds to buy now

I think these index funds are well worth a look right now.

Read more »

a man with a wide, eager smile on his face holds up three fingers.
Opinions

3 top income-focused ASX shares to buy before April

I'd bolster my income by buying these dividend-payers before the next month rolls around.

Read more »