A few ASX shares could make good investments for beginner investors.
Starting with shares can be daunting. So it’d be wise to try to avoid high-risk ideas that could go really wrong. Investments that have the potential to produce good long-term returns could be good ASX share ideas:
Betashares Global Quality Leaders ETF (ASX: QLTY)
This is an exchange-traded fund (ETF) that aims to give investors exposure to a portfolio of quality global businesses.
It has 150 positions in total that are spread across multiple countries. The US (61.5%) has the biggest weighting, but there’s also Japan (13.1%), Switzerland (4.6%), Hong Kong (3.5%), France (3.4%), Denmark (3.3%), Germany (2.6%), Britain (2%) and the Netherlands (1.7%) with notable positions.
Businesses have to rank well on four key factors to get into this portfolio: return on equity (ROE), debt to capital, cashflow generation and earnings stability.
There are plenty of recognisable businesses in the ETF’s portfolio, in size order: Nvidia, L’Oreal, Facebook, Adobe, Alphabet, Intuit, Novo Nordisk, Roche Holding, SAP and UnitedHealth.
The Betashares Global Quality Leaders ETF has done quite well since it started in November 2018, with an average return per annum of 19%. The index that it tracks has made returns of 16.7% per year over the last five years. Time will tell how quality performs over the next five years.
I think it’s a quality idea to start with investing with ASX shares and gives good diversification.
Future Generation Global Invstmnt Co Ltd (ASX: FGG)
Future Generation Global is a listed investment company (LIC) with a very big difference.
Most LICs are managed by managers that want to make a lot of management fees. But this LIC is about investing in a portfolio of funds managed by fund managers who work for free.
Why would they do that? It’s so that Future Generation Global can donate 1% of its net assets each year to youth mental health related charities. I think it’s a really good initiative.
Some of the fund managers that it’s invested in include: Cooper, Magellan Financial Group Ltd (ASX: MFG), Caledonia, Nikko AM, Marsico Capital Management and Munro Partners.
The ASX share has a lot of underlying diversification with investments in more than 10 fund managers.
There are lot of different investment styles in the portfolio, so its returns aren’t ever going to be huge, but hopefully consistently good. Over the last five years, the Future Generation Global portfolio has delivered gross returns of 12.7% per year, compared to an average of 12.6% per year for the MSCI AC World Index (AUD).
