If investors are just acting out, I think it makes sense to go for ‘beginner’ ASX shares.
In my mind, that means investments that are simple to understand. But I’d only want to choose ideas that could offer good long-term potential.
These are two I’d choose:
BetaShares Global Sustainability Leaders ETF (ASX: ETHI)
This is an exchange-traded fund (ETF). In essence, that just means you’re able to buy a basket of shares in a single investment.
Sometimes ETFs can be focused on different things like different countries or different industries. ETFs can be good beginner ASX shares for investors.
ETHI ETF is a global portfolio. It represents 200 of the largest global businesses after going through a process that excludes a number of things.
It excludes various activities and industries like fossil fuels, tobacco, alcohol, junk food, weapons, supply chain concerns, habitat destruction and so on.
What’s left is an ‘ethical’ list of businesses that are seemingly all doing the right thing by the planet and their stakeholders.
Some of the biggest names in the portfolio include: Nvidia, Apple, Visa, Home Depot, Mastercard and PayPal.
In my opinion, this ETF is pretty cheap for the amount of ethical overlay it brings, with an annual management fee of 0.59%.
WCM Global Growth Ltd (ASX: WQG)
This is a listed investment company (LIC). I like it as a beginner ASX share. Its job is to invest in global shares for its investors. I think it does a very effective job at doing that.
It has two investment philosophies compared to most other fund managers.
The first is that it’s looking for businesses that are improving
the strength of their business when compared to competitors. Is the economic moat getting stronger?
The WCM investment team believe the ‘direction’ of the moat is more important than the size of the moat.
Another element of the investment strategy is finding a culture with the investment businesses that supports the growth of that economic moat, or competitive advantage.
I think it’s a very effective strategy that can lead to solid results over time, whether the share market is booming or not. Over the last three year, the LIC’s portfolio has delivered net returns per annum of 23.7%, though who knows what the next three years will look like?
At the end of August 2021, some of its largest positions included: West Pharmaceutical Industries, Stryker Corporation, Shopify, Sherwin-Williams, Thermo Fisher Scientific and LVMH.
It also has a growing dividend.
In the latest weekly disclosure, the LIC showed that the share price is more than 12% cheaper than its underlying value (the pre-tax net tangible assets).
