The ASX share market has recovered a lot since the COVID-19 crash almost a year ago. But I think there are still some quality investment ideas at good value for the long term despite the strong market conditions.
Here are two that I’ve got my eyes on:
Betashares Global Quality Leaders ETF (ASX: QLTY)
I really like the idea of investing in exchange-traded funds (ETFs), I just don’t like the idea of owning of mediocre businesses with limited growth prospects in my portfolio. That’s why I’m generally not a huge fan of any ASX ETF that focuses on large cap ASX shares like banks.
Something like Vanguard Msci Index International Shares ETF (ASX: VGS) does appeal quite a bit because it offers global diversification both geographically and across industries. But, it does own a lot of pretty average businesses too.
Betashares Global Quality Leaders ETF could be the answer. It owns around 150 businesses that are rated as being quality with good ratings on cashflow, profitability, debt and return on equity.
It’s pretty cheap as far as global ETFs go, with an annual management fee of 0.35%.
The holdings include names like Intel, AIA, Alphabet, Texas Instruments, Keyence, Intuit, SAP and Nvidia.
It has performed well since inception in November 2018, generating net returns of an average of 18.9% per annum.
Magellan Financial Group Ltd (ASX: MFG)
Magellan is one of the biggest fund managers in Australia. Fund management businesses can be very profitable and scalable businesses once they reach a certain size.
I like the partnership approach Magellan is taking with its clients by offering discounted investments if they commit to investing more funds.
Not only does Magellan have a very profitable core funds management segment, but it has multiple other growth segments.
It’s launching its own lower-cost, high quality series of ETF products which could mean more funds growth over time. Or at least, it’s future-proofing itself.
Magellan plans to soon launch a retirement product which could be a very attractive option for retirees considering how low interest rates have gone.
There’s also the chance that Magellan plans to build a portfolio of investments in private businesses such as Barrenjoey and Guzman y Gomez. I think this is much better than holding cash on the balance sheet (when Magellan is already debt free).