In your 30s and looking to build wealth with ASX shares? It's a great age to start investing because there are still many years ahead of working and time for compounding.
If someone is 35 and is thinking about retiring at 65, that's 30 years of possible compounding. How much growth could happen in that time?
The share market has made an average return per annum of 10% over the ultra-long-term. If $10,000 grew at 10% per year for 30 years, it would become $174,000. Of course, the share market could do worse (or better) than that in the future.
People in their 30s may be earning a bit more than in their 20s, allowing them to set aside some cash to invest. Of course, people of other ages can also save and invest.
I think the two ASX shares in this article could be top picks for long-term growth.
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Global X Fang+ ETF (ASX: FANG)
This exchange-traded fund (ETF) helps us invest in some of the largest, strongest and most compelling businesses in the world.
It's quite similar to the Betashares Nasdaq 100 ETF (ASX: NDQ) – both ETFs are focused on the large US tech companies.
But, the FANG ETF is only invested in 10 businesses. These are the names (and latest weightings) within the portfolio: Nvidia (11.73%), Meta Platforms (10.73%), Broadcom (10.58%), Netflix (10.44%), Alphabet (10.31%), Microsoft (9.88%), Amazon.com (9.69%), Snowflake (9.53%), Apple (9.03%) and Tesla (7.98%). These are businesses with very strong economic moats.
One benefit to this ETF over the NDQ ETF is that it has a lower management fee. The FANG ETF has an annual management of 0.35% while the NDQ ETF fee is 0.48%.
I'd guess a lot of people invest in the NDQ ETF for the big US tech names, so why not get a greater exposure to them?
The FANG ETF has done very well over the last three years, with an average return per annum of 17%, compared to 14.1% per annum for the NDQ ETF over the same time period. Of course, past performance is not a guarantee of future performance.
But these businesses are doing a number of things that could change the world and grow earnings in areas like AI, cloud computing, gaming, online video and so on. I think owning these names makes a lot of sense for people building wealth in their 30s.
Pinnacle Investment Management Group Ltd (ASX: PNI)
Pinnacle is an ASX share that helps leading fund managers start their own fund management business.
It can help the funder with various services like seed funding of funds under management (FUM), working capital, distribution and client services, compliance, finance, legal, technology and other infrastructure. Taking this off the managers' desk means the fundie can focus on the investing side of things.
The business has built a portfolio of solid fund managers, including Hyperion, Plato, Solaris, Antipodes, Spheria, Firetrail, Metrics, Five V and Coolabah.
2022 was a rough year, with strong inflation and rising interest rates leading to falling asset prices and an element of caution among investors about adding ore money into Pinnacle's funds.
With asset prices now performing better and interest rate cuts on the horizon, the ASX share is now better placed to attract more FUM, in my opinion. In the second half of FY23, the fund managers saw net inflows of $3.1 billion.
Pinnacle has built an impressive portfolio of fund managers, and I like its initiative of looking to grow overseas. It recently helped start (and invested in) a Canadian small-cap fund manager.
According to Commsec, the Pinnacle share price is valued at 20x FY25's estimated earnings.
