I believe that some outstanding ASX shares now look excellent value after all of the volatility in 2022.
In my opinion, it’s times like this that can prove to be the best buying opportunity for the long-term. As investors, all we can do is buy (or not) at the prices that are being offered. Who knows what will happen next? But lower prices are usually better.
If someone gave me some money to buy two ASX shares, these are two that I’d happily buy:
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital Investments is one of the best listed investment companies (LICs) in my opinion.
The purpose of a LIC is to invest in other shares or assets. MFF mostly looks at global blue chips. I think that global household names are very capable of producing solid long-term returns.
At the moment, there are names like MasterCard, Visa, Amazon, Home Depot, Alphabet, Meta Platforms (Facebook), Microsoft, Banker of America and CVS Health in the portfolio. In my mind, this is a quality portfolio.
Over the past decade, the returns have been solid and I reckon the next ten years should be good too, with that good quality line-up (or new picks).
I do like that MFF is steadily growing its dividend for investors.
But what makes this ASX share particularly attractive right now is that the MFF share price is valued at a 19% discount to the latest weekly underlying value, the net tangible assets (NTA) per share.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This is one of my favourite exchange-traded funds (ETFs). MOAT ETF combines the reasonable fees of a typical ETF, with the good investing of a quality-focused active investment team.
The active management fee is 0.49%, whereas many fund managers charge 1% (or more) of net assets each year.
VanEck Morningstar Wide Moat ETF aims to pick businesses that have strong economic moats. A moat is a way of explaining of how strong a business is and how hard it is for a competitor to ‘invade’. It’s a way of describing how strong the competitive advantages are.
For this ETF, Morningstar analysts only choose investments that have economic moats that are likely to persist for a decade or two. Think about a business like Microsoft – it has dominated office software for a long time, and that’s very unlikely to change for long into the future.
After that process of economic moats, what remains is a list of seemingly quality businesses. Those stocks are only chosen for the MOAT ETF if the target companies are trading at attractive prices relative to Morningstar’s fair value estimate.
Some of the businesses in the ASX share’s portfolio right now are: Berkshire Hathaway, Merck & Co, Constellation Brands, Campbell Soup, Kellogg, Microsoft, Alphabet, Western Union, Equifax, Salesforce, Meta Platforms and Walt Disney.
Past performance is not a guarantee of future results, but the MOAT ETF has made a return of 16.9% per year over the last three years.