The best ASX shares to invest $500 in right now

Creating wealth isn't just for the privileged. Just a few hundred dollars can get you started in stock investing.

| More on:
A person sitting at a desk smiling and looking at a computer.

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

Many Australians have the impression that investing in stocks is only for rich people. 

But that cannot be further from the truth.

If you have just $500 you could make a pretty useful start to a portfolio.

I have taken the liberty of picking out the best ASX shares that could be ideal purchases for a few hundred dollars.

And for diversification, they're all a bit different to each other.

One is a reliable growth exchange-traded fund (ETF), another is an explosive pharmaceutical stock that's in a dip currently, and the third is a cloud computing and artificial intelligence (AI) play that's already soared in recent times.

The best ASX shares for diversification

Regardless of how much you have to spend, I am a big fan of Vaneck Morningstar Wide Moat Etf (ASX: MOAT) as an excellent starter stock for a new portfolio.

This ETF tracks the constituents of the Morningstar Wide Moat Focus NR AUD Index, which are companies that are judged to have the biggest competitive advantages over their rivals and potential rivals.

Morningstar and many other investors call this concept an "economic moat".

Looking at the current constituent list, there are some familiar brands such as Walt Disney Co (NYSE: DIS), Alphabet Inc (NASDAQ: GOOGL) and Nike Inc (NYSE: NKE).

Another benefit of the Wide Moat ETF is that the US stocks provide diversification from your other ASX holdings.

Chuck $500 on this one.

The ASX stock with explosive potential

Neuren Pharmaceuticals Ltd (ASX: NEU) was the best performer in the S&P/ASX 200 Index (ASX: XJO) last year with a spectacular 214% climb.

This year hasn't been as kind though, with the healthcare company taking a 22.4% dive so far in 2024.

"A short report targeting Neuren's US partner, Acadia Pharmaceuticals Inc (NASDAQ: ACAD), combined with unexpected holiday-period seasonality in sales for its flagship drug, Daybue, shook investor confidence," Elvest analysts said in a memo to clients.

They are still confident in the Melbourne outfit's long-term outlook.

"Our thesis for Neuren Pharmaceuticals is unchanged. New CY24 Daybue sales guidance of US$370 to US$420 million (+120%) underpins another solid year of royalty and milestone revenue for Neuren."

All six analysts currently surveyed on CMC Invest reckon Neuren is a buy.

The best ASX shares to invest in artificial intelligence

While the ASX is short on companies that directly produce generative artificial intelligence, Nextdc Ltd (ASX: NXT) is going gangbusters.

As a provider of data centres, the company is enjoying high demand from the intensive resources required for AI and cloud computing generally.

To celebrate February 29, Moomoo market strategist Jessica Amir declared NextDC as one of the stocks she would buy and hold until the next leap year.

The business is at a "tipping point", she said.

"Positioned to capture [and] generate AI opportunities… Market is telling you that it's exciting about its future and that it's essential in AI.

"Half of its revenue is from NSW and ACT — huge potential to expanding capacity and geographically — and it's doing that."

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo has positions in VanEck Morningstar Wide Moat ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Nike, and Walt Disney. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $47.50 calls on Nike. The Motley Fool Australia has recommended Alphabet, Nike, VanEck Morningstar Wide Moat ETF, and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Investing Strategies

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today
Dividend Investing

Invest $10,000 in New Hope shares and get $1,006 in passive income

Many ASX investors buy New Hope shares for their high yielding, fully franked dividends.

Read more »

A man in a suit looks serious while discussing business dealings with a couple as they sit around a computer at a desk in a bank home lending scenario.
Dividend Investing

Forget term deposits and buy these ASX 200 dividend shares

Analysts have good things to say about these dividend options.

Read more »

An Australian farmer wearing a beaten-up akubra hat and work shirt leans on a fence with livestock in the background and a blue sky above.
REITs

Should you buy this ASX REIT for its 6% dividend yield?

This expert is telling investors to take advantage of a 6% yield...

Read more »

a man in a business suit points his finger amid a digitised map of the globe suspended in the air in front of him, complete with graphs, digital code and glyphs to indicate digital assets.
Investing Strategies

Future focus: How to diversify your portfolio with ASX AI ETFs

Looking for a simple and effective way to capitalise on the growth of AI technologies across global markets?

Read more »

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

Here's the BHP dividend forecast through to 2028

Will the Big Australian continue to reward shareholders with big dividends?

Read more »

Scared people on a rollercoaster holding on for dear life, indicating a plummeting share price
Cheap Shares

5 oversold ASX shares to buy in April 2024

Looking to snap up an ASX bargain this month?

Read more »

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Investing Strategies

How to invest in the future with ASX AI shares

Discover the potential of AI in transforming industries and enhancing investment portfolios with ASX-listed AI shares.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Dividend Investing

Analysts say these ASX 200 dividend stocks are best buys in April

What are analysts saying about these high quality companies?

Read more »