Where I would spend $2000 on ASX shares right now

So, you have some spare cash to invest in shares right now? Maybe this is your first time investing in ASX shares, or maybe you are looking to top up your ASX share portfolio.

Either way, with the S&P/ASX 200 Index (ASX: XJO) still well down on its pre-coronavirus highs and market confidence continuing to gradually improve, now could be a good time to invest.

Here we take a close look at 2 of my top ASX share picks right now: BetaShares NASDAQ 100 ETF (ASX: NDQ) and Wesfarmers Ltd (ASX: WES).

BetaShares NASDAQ 100

My first ASX share investment recommendation is an exchange-traded fund (ETF). The advantage of ETFs over regular listed shares is that you get instant diversification to a wide range of listed companies.

The BetaShares NASDAQ 100 ETF invests in a basket of shares on the US NASDAQ exchange. It is comprised of the 100 largest, non-financial businesses on this exchange and is home to some of the world’s most successful businesses, with a high proportion of tech companies. These include tech giants such as Amazon, Google, Facebook, Microsoft, Netflix and Apple. Many are world-leading brands, and many also have strong and dominant positions in their individual market niches.

Given Australia’s tech sector is very small compared to the US market, purchasing this ETF gives you instant access to a much larger tech market not normally available via the ASX.

It’s also an easier (and cheaper) way to get exposure to the US tech market than by investing directly in US-listed tech companies. Buying individual US shares requires a separate trading account, and the transactions fees are also higher than they are for regular ASX shares.

Wesfarmers

Although Wesfarmers is a single listed company, one attribute that it has in common with an ETF like BetaShares NASDAQ 100 ETF is its strong sector diversification. Purchasing this ASX share gives you instant access to Wesfarmers’ expansive portfolio of high-quality companies.

Wesfarmers is a highly diversified business with operations in general retail segments including home improvement and outdoor living, apparel and general merchandise and office supplies. It also has exposure to industrial segments with operations in chemicals, energy and fertilisers, and industrial and safety products. This diversification provides a buffer to various parts of the economic cycle.

Wesfarmers also has a strong balance sheet, positioning it well to ride out the current crisis. It also has witnessed strong demand from its online retail offerings during the coronavirus pandemic.

Foolish takeaway

While both are very different investments, I believe that the BetaShares NASDAQ 100 ETF and Wesfarmers are worthy of consideration for adding to your ASX share portfolio. Both provide strong market diversification in 2 very different markets, and could be well placed to outperform the ASX 200 over the next 5 years, in my view.

More reading

• ASX retailers beware! Amazon.com is gearing up for its next major attack
• 3 robust ASX dividend shares you need to own
• Coronavirus second wave potential could drive investment portfolio changes
• 3 quality ASX dividend shares you can buy today
• Here are 3 Australian share market trends to watch this week

Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. 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.

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