2024 is almost here and it’s a good time to consider what ASX share investments to buy for next year and the long-term.
Interest rates are still high, and may be for many months, or even years. Debt costs are increasing and this makes it more difficult for indebted households and businesses.
We can’t expect sectors like retailers and property trusts to make as much operating profit as 2022. But, that doesn’t mean the share prices can’t perform well in 2024 – investors are/were already expecting weakness, and some areas could be oversold opportunities.
The two ASX shares I’m going to talk about could be good investments today for the long-term.
Betashares Global Quality Leaders ETF (ASX: QLTY)
While it’s not an ASX share, we can find it on the ASX. This is an exchanged-traded fund (ETF) which invests in many of the world’s highest-quality businesses, for an annual cost of just 0.35%.
The QLTY ETF has a portfolio of 150 global names, outside of Australia. Only 62% of the portfolio comes from the US at the time of writing, whereas other global ETFs usually have a bigger allocation to the US. Japan has a 13.4% weighting, the Netherlands has a 4.2% weighting, France has a 3.8% weighting, Denmark has a 2.7% weighting, Switzerland has a 2.4% weighting, the UK has a 2.1% weighting and so on.
There are four key factors this ETF focuses on return on equity (ROE), debt to capital, cashflow generation ability and earnings stability. In an uncertain environment, I think these factors combined can help the underlying companies outperform next year whether the economic picture is still weak or strengthening.
Over the five years to November 2023, the QLTY ETF delivered an average return per annum of around 14%. I don’t know if the next five years will be as good, but I do think it can outperform the ASX 200 (ASX: XJO) and the wider global share market.
Accent Group Ltd (ASX: AX1)
Accent is one of the largest footwear retailers in Australia. The ASX share is well-known for its The Athlete’s Foot brand, but it also owns other brands such as Glue Store, Nude Lucy and more. The company acts as the Australian distributor of a number of appealing global brands.
The Accent share price is down 25% since April 2023 amid weak conditions, so it’s a lot cheaper and that made me want to invest in this business.
It’s the business responsible for Aussies being able to buy products of brands like Vans, Skechers, Kappa and Hoka. I don’t think demand for these brands is going to go away, and I believe when household finances improve the company can see better performance.
I decided to buy before any proof of that is seen, but I think the long-term will be better for Accent, particularly as it continues to grow its store count.
