This period of uncertainty looks like a great time to invest in ASX shares that are undervalued.
We can’t say for sure what’s going to happen with share prices, but the lower valuation we buy at, the better.
I’ll talk about two ASX shares that I think are great buys.
Australian Ethical Investment Ltd (ASX: AEF)
Australian Ethical is a funds management business that provide access to investment management products that aligns with their values and provides good long-term returns. It looks to avoid certain sectors that don’t align with investor ethics.
One of the best things about Australian Ethical is that the business offers superannuation for Australians. That provides appealing, long-term funds under management (FUM) and regular contributions (inflows).
For example, in the three months to June 2026, its superannuation segment saw $0.2 billion of net inflows. Market performance can also help grow FUM as well.
The business saw quarterly FUM grow by almost $1 billion in the June 2026 quarter to $14.50 billion.
I think the ASX share has a very promising future as it experiences ongoing superannuation contributions. It looks cheap to me after falling more than 40% in the past year.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is a value jewellery retailer with its global network of stores around the world.
The company is generating excellent levels of growth (for a retailer, in my view) thanks to its regularly-expanding store numbers.
Its store count growth is occurring in numerous markets, including Australia, South Africa, the UK, Ireland Germany, the Netherlands, the USA and Canada. It has a presence in a number of other countries.
The FY26 half-year result demonstrated the strength of its business model. Its store count increased 15.5% to 1,089 global Lovisa stores at 28 December 2025. Excluding the new Jewells business, revenue rose 22.7%, gross profit increased 23.4%, EBITDA (EBITDA excluded) grew 24.4%, EBIT went up 20.4% and net profit increased 21.5%.
When a net profit is regularly growing by high-teens (or more) per year, I think that’s likely to drive excellent returns over time, even if the market isn’t seeing it right now.
The Lovisa share price is now down more than 40% from the end of August 2025, making it look a lot cheaper. I think the market is undervaluing how much the ASX share’s earnings could grow over the next three years.
