Like it or not, presents are one of the main highlights for children during Christmas. It’s very exciting. But what could be more exciting than ASX shares for Christmas?
Being interested in shares is one thing that nearly everyone would benefit from, in my opinion. Buying a few ASX shares for my child is hopefully going to nurture a lifelong curiosity in businesses, saving money and investing. That’s the hope anyway.
But what ASX shares would be a good way to spark that interest and feel like you’re supporting the right things? The older version of your child may not like the idea of making money from a coal company, for example.
With that in mind, these three ideas are ones that I’d be very happy to buy for my child for both returns and the idea behind them:
Australian Ethical Investment Limited (ASX: AEF)
Australian Ethical describes itself as the country’s leading ethical investment manager. Since 1986, the company has provided investors with wealth management products that align with their values and it has been delivering strong returns.
The fund manager recently released an update to say that it’s expecting its underlying net profit after tax (UPAT) for the six months to 31 December 2020 to be between $4.6 million and $5.1 million. The mid-point of that guidance is an 11% increase compared to the prior corresponding period. Funds under management (FUM) increased to $4.92 billion at 30 November 2020. This was an increase of 14% from $4.32 billion at 30 September 2020, and up 21.6% since 30 June 2020.
I think the company has long term growth potential with its exposure to the superannuation pool of money which is steadily growing.
Future Generation Global Investment Co Ltd (ASX: FGG)
Future Generation Global is a listed investment company (LIC) which donates 1% of its net assets each year to youth mental health charities. Pleasingly, there are no management fees or performance fees involved with this LIC. Fund managers work pro bono (for $0) so that the LIC can maximise its charitable donations. Future Generation Global invests in the funds of fund managers that target international shares.
Some of the fund managers involved include Magellan Financial Group Ltd (ASX: MFG), Caledonia, Cooper Investors, Marsico Capital Management, Nikko Asset Management and Munro Partners.
According to the latest monthly update, the Future Generation Global’s portfolio gross return over the past year was 13.2% and over the past three years the average return per annum was 12.4%, which compares to the MSCI AC World Index (AUD) return of 5.7% over the past year and an average of 10% over the last three years. That’s solid outperformance.
It offers a lot of diversification, it’s supporting many great causes and the returns are solid.
BetaShares Global Sustainability Leaders ETF (ASX: ETHI)
This is an exchange traded fund (ETF) that invests in 200 large global businesses which are climate change leaders (as measured by their relative carbon efficiency) and which are not materially engaged in activities classified as irresponsible.
Some of the sectors or problems excluded from this ETF include gambling, tobacco, alcohol, junk food, destruction of valuable environments, human rights issues and lack of board diversity.
Examples of businesses in the portfolio that pass this criteria of being ethical include Apple, NVIDIA, Tesla, Mastercard, Visa, Home Depot, PayPal, Adobe, ASML and Toyota.
Some people may think investing ‘ethically’ may result in lower returns. But BetaShares Global Sustainability Leaders ETF has actually done really well. Over the past year its net return was 24.2% and over the last three years its net returns have been 21.1% per annum.
This ETF has a high quality portfolio, it’s got a history of good returns and you can feel good owning it.
If you want some more ideas, then you could think about the ASX growth shares that the Rask Media team regularly write about.