The share market is expected to decline again today, which gives us the opportunity to buy shares at more attractive prices.
US President Donald Trump has said something else that has caused investors to worry. Many media commentators were confident that a trade deal between the US and China would be signed within the next few months.
However, now it seems he’s in no rush to sign an agreement with the Asian superpower. It can take another year if needed. He also said he could impose tariffs on NATO countries that don’t spend 2% of their GDP on defence so that the US isn’t shouldering most of the burden.
So, with the global share market drop in mind, here’s why I’ve got my eyes on these two ASX shares:
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital may be the best listed investment company (LIC) to capture the long-term growth of international shares. It invests in long-term growth shares that have strong market positions and good prospects.
The LIC is very ably managed by Chris Mackay, it has been the strongest-performing LIC over the past five years by being invested in shares like Visa, MasterCard, Home Depot, Bank of America, JP Morgan Chase and Alphabet.
It has low management costs and expenses compared to most other LICs, which means a lot of the returns come back to us as investors.
Despite all of the above and having a diverse portfolio, the MFF share price is down around 0.6% this morning.
Vanguard FTSE Asia ex Japan Shares Index ETF (ASX: VAE)
The trade war has been one of the main reasons why Asian shares haven’t done so well over the past couple of years, even though earnings growth remains strong.
Asian businesses trade on much cheaper valuations than their western counterparts. Some of that cheapness may be justified – China is a bit of an unknown quantity.
However, it is certain that Alibaba, Taiwan Semiconductor Manufacturing, Tencent, Samsung, AIA, Ping An and so on are all very promising businesses.
The ETF has a return on equity of almost 16% and an earnings growth rate of almost 12%, but its price/earnings ratio at the end of October as a whole is only 13.6x. These are great stats for an ETF.
Despite all of that, the ETF is down another 0.6% this morning.
Both of these potential investments are trading cheaper and have lots of attractive underlying shares. If I had to pick one it would be MFF Capital – it has more flexibility about where it can invest and there is much less China-related risk.
The post 2 ASX shares I’d buy in today’s share market decline appeared first on Motley Fool Australia.
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Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd and VANGUARD FTSE ASIA EX JAPAN SHARES INDEX ETF. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019