I believe that diversification is important to achieve satisfactory returns with ASX shares in the short-term and the long-term.
Diversification doesn’t just mean spreading your money among Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and Telstra Corporation Ltd (ASX: TLS).
I think it’s important that investors spread their money across different industries and different businesses that have good growth prospects.
Here are three I think fit the bill:
Kogan.Com Ltd (ASX: KGN)
Kogan is one of the ASX’s most promising retail businesses. It has a number of different business operations including Kogan Retail (the Kogan.com and DickSmith.com.au retail websites), Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel and Kogan Money. Each new service means better network effects for the company and the customer.
It aims to provide consumers with the lowest prices thanks to its online model, as well as through efficiencies. As it scales Kogan improves its profit margins. One of the other attractive things about Kogan is that it has a growing dividend.
A recent fall of the share price could provide an opportune time to buy some shares. It’s trading at just 19x FY21’s estimated earnings.
BetaShares Asia Technology Tigers ETF (ASX: ASIA)
The ASX is not known for having many large, exciting technology shares. But Asia has plenty of technology options that are worth investing in. However, it’s hard and expensive to directly invest in Asian shares, so it might be better just to invest in an exchange-traded fund (ETF) that does most of the work for you.
This ETF gives exposure to top growth shares like Alibaba, Tencent, Baidu, Samsung and Infosys. Since September 2018 the ETF has delivered net returns per annum of 15% per annum.
The ETF is growth focused with over 75% invested in Internet & Direct Marketing Retail, Semiconductors, Interactive Media & Services and Technology Hardware, Storage & Peripherals. It’s diversified into lots of attractive areas.
At the moment the stated annual management costs are 0.67% per annum.
MFF Capital Investments Ltd (ASX: MFF)
This is a listed investment company (LIC) which invests in some of the best growth shares in the world. There are lots of high-quality businesses outside of Australia worth investing in like Visa, MasterCard and Alphabet. These are three of MFF Capital’s largest positions.
MFF Capital has been the best-performing LIC over the past decade. I have a lot of confidence in portfolio manager Chris Mackay to continue the strong long-term returns.
It has lower fees than most other LICs, which helps net returns. It pays a dividend, but it’s a low yield so that the LIC retains most of the returns for further growth.
Of the three I think I’d personally go for MFF Capital for its global investment flexibility. The Asian tech ETF looks very promising, particularly as Asian shares have lower valuations than their US counterparts. Kogan looks very interesting at this valuation though.
The post Make your portfolio better and more diversified with these 3 ASX shares appeared first on Motley Fool Australia.
I reckon these top growth stocks would also be good ways to diversify your portfolio whilst maintaining high returns.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Kogan.com ltd. 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. 2020