If you’re a beginner investor then I think there some really great ASX shares to get started with.
It can be tough to know what to invest in first as a beginner investor. There are just so many options to choose from!
I’d want to go for ideas that aren’t highly speculative, that have long-term growth potential and can provide instant diversification.
Here are two options:
BetaShares Global Sustainability Leaders ETF (ASX: ETHI)
This is an exchange-traded fund (ETF) – if you don’t know what an ETF is then it could be a smart idea to look at Rask’s free beginner ETF investor course.
The concept of this ETF is to invest in large global businesses that have been picked as being climate leaders of their industry. The ETF also avoids investing in businesses in certain industries such as fossil fuels, gambling, weapons and so on.
If you only want to be invested in ‘ethical’ businesses then this is one of the best ways to do it. You’d be mistaken if you think this ETF costs a lot in management fees – its annual cost is only 0.59% per year.
You’re probably wondering which global shares could count as ethical. The top 10 holdings of BetaShares Global Sustainability Leaders ETF are: Apple, Tesla, Nvidia, PayPal, Mastercard, Home Depot, Visa, Adobe, ASML and Netflix.
Almost 40% of this ETF is invested in IT, which I like. But it also has diversification with the sectors of consumer discretionary, financials and healthcare each having a weighting of over 10%.
The long term performance of this ETF has been, so far, very good. Looking at the past three years, BetaShares Global Sustainability Leaders ETF has returned an average of 22.6% per year. Since inception in January 2017 the ETF has returned an average of 21.3% per year. However, I wouldn’t expect this level of growth to continue.
Future Generation Global Invstmnt Co Ltd (ASX: FGG)
This is a listed investment company (LIC) – if you’ve never heard of a LIC then you can read Rask’s explainer on LICs. It’s basically a company that invests in other shares for you.
With LICs, normally there’s a single management outfit, or even just a single portfolio manager, that looks after the portfolio.
Future Generation is different become it engages more than 10 external fund management teams to look after its investments. But, interestingly, those fund managers work pro bono (for free) for Future Generation. They do that because Future Generation Global as a philanthropic focus – it donates 1% of its net assets each year to youth mental health charities. There are no management fees or performance fees.
But this idea isn’t just about supporting charities. It offers excellent underlying diversification and the gross portfolio returns have outperformed the global share market over the last six months, 12 months, three years and since inception in September 2015. Since inception the portfolio has returned 11% per year, better than the global share market benchmark by an average of 0.8% per year.
As a bonus, at the current Future Generation Global share price of $1.50, you can buy it at a 7.7% discount to the (December 2020) underlying value of the shares. In other words, you can buy $1 of shares for around $0.92 per share.
Other ASX growth shares to consider for your first investment could be MFF Capital Investments Ltd (ASX: MFF) or Betashares Global Quality Leaders ETF (ASX: QLTY)
