I’d invest $5,000 into these excellent ASX shares for the long term

The ASX share market has significant investing opportunities to consider, with some of them potential market-beaters at today’s prices.

I don’t think that day trading is an effective investment strategy. But I think it’s possible to find attractive long-term investments, as well as ones that have been materially mispriced which could take a month, a year, or longer to re-price.

If I had $5,000 to invest today, these are three that I’d happily put my money into.

Australian Ethical Investment Ltd (ASX: AEF)

Australian Ethical is one of the most interesting fund managers. I don’t think there are many ways to ‘play’ the growing superannuation theme, nor are there many investments that are focused on gaining exposure to the green investing theme. However, Australian Ethical could capture the benefits of both of these themes.

It offers funds to enable investors to align their investments with their ethics. Australian Ethical offers superannuation for people to use and that’s the segment that’s seeing significant growth.

Remember that people regularly contribute to their super thanks to mandatory superannuation contributions in Australia (as well as the tax-beneficial nature of superannuation). This provides attractive, regular inflows for the fund manager.

I also think this ASX share looks much better value after Australian Ethical’s share price decline of 45% over the last six months. Certainly, ongoing exposure to superannuation should help drive underlying profitability higher in the coming years.

Ansell Limited (ASX: ANN)

Ansell is one of the world’s largest manufacturers of safety gloves used for a variety of household, industrial, scientific, and medical purposes.

I think Ansell is one of the unsung global leaders on the ASX. The Ansell share price has dropped 36% since mid-June 2021. It benefited from huge demand during COVID-19 but now its valuation has come down to a more sustainable level.

In the FY23 half-year result, Ansell said that its sales of $835.3 million showed “strong growth in industrial more than offset by lower healthcare sales”. This led to an overall decline in organic constant currency terms of 11.5%.

However, I think the 6.4% underlying industrial revenue growth bodes well for the business once it’s not cycling against strong COVID demand.

Despite the sales decline, the earnings before interest and tax (EBIT) margin improved by 120 basis points (1.20%) in organic constant currency terms.

Based on Commsec estimates, Ansell is valued at 16 times FY23’s estimated earnings and 15 times FY24’s estimated earnings. Earnings growth is expected again for the ASX share in FY25.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This is one of my favourite exchange-traded funds (ETFs) for achieving global diversification.

The idea behind this ASX ETF is that it is invested in a portfolio of 200 businesses that are among the world leaders when it comes to doing the right things in terms of environmental, social, and governance (ESG) factors.

It also excludes a variety of industries from the portfolio including fossil fuels, gambling, alcohol, weapons and other businesses of that nature.

I think it’s quite a cheap ETF considering the exclusion process that it follows — its annual management fee is 0.59%.

Around 70% of the portfolio is invested in US-listed businesses, but countries like Japan, Switzerland, the Netherlands, Germany, the UK, and others also have a sizeable allocation.

Looking at the current portfolio, these are some of its biggest positions: Visa, Home Depot, Nvidia, Apple, Mastercard, and Toyota.

The post I’d invest $5,000 into these excellent ASX shares for the long term appeared first on The Motley Fool Australia.

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More reading

• 8 ASX 200 shares trading ex-dividend this week
• Why Ansell, Breville, Star, and Temple & Webster shares are falling
• Ansell share price slumps 8% as healthcare sales fail to cough up
• Is this share the ASX 200’s best healthcare buy?
• Looking for ASX growth shares? I rate these 2 as buys

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Australian Ethical Investment, Mastercard, Nvidia, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2025 $370 calls on Mastercard, long March 2023 $120 calls on Apple, short January 2025 $380 calls on Mastercard, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Ansell, Apple, Australian Ethical Investment, Mastercard, and Nvidia. 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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