Where to invest $5,000 into ASX shares right now

Do you have some spare cash to invest in ASX shares right now?

I believe the shares below are 2 very solid options. Here’s why they are both on my buy list right now, and how I would split a $5,000 investment across the 2 ASX shares.

BetaShares NASDAQ 100 ETF (ASX: NDQ) – $3,000

My first recommendation is actually an exchange-traded fund (ETF), rather than an individually listed company. The BetaShares NASDAQ 100 ETF invests in a basket of shares that are listed the US NASDAQ exchange. This ‘tech heavy’ ETF includes many  of the tech giants that you probably familiar with, such as Apple, Amazon, Google, Facebook, Microsoft and Netflix.

What really appeals to me about this ETF is that you get exposure to a vast portfolio of US shares that you otherwise wouldn’t gain exposure to by investing on the ASX. Australia does have its own tech shares that are individually listed. However, I think it’s a great idea to also have some exposure to the massive tech market listed in the US. A number of US tech companies have become global leading brands and many also have dominant positions in their individual tech market niches.

The tech sector in the US is really booming right now. Despite strong recent gains, I believe the long annual return of this fund is likely to continue exceed the return of the S&P/ASX 200 Index (ASX: XJO) over the next 5 to 10 years. 

Telstra Corporation Ltd (ASX: TLS) – $2,000

Australia’s largest telecommunications provider Telstra has had many challenges to face over the last decade. In particular, it has had to transition to a whole new telecoms world, centred around the government-owned National Broadband Network (NBN). Prior to the NBN, Telstra enjoyed margins and profit levels well above those achievable by most of its competitors. However, Telstra is now on a level playing field with the rest of the local market.

Telstra’s response has been to transition to a leaner operation under its ‘T22 strategy’ and is now well underway to achieving this goal. In addition, it is emerging as a market leader in the race to launch full scale 5G mobile services.

Telstra also currently has an attractive price-to-earnings ratio of 19 and pays a forward fully franked dividend yield of around 2.9%

Foolish takeaway

BetaShares NASDAQ 100 ETF and Telstra are 2 very different types of investments. However, I believe that both are well positioned to deliver above average shareholder returns over the next 5 years.

If I was investing $5,000 between both shares, I would lean towards investing slightly more in BetaShares NASDAQ 100 ETF, due to its higher level of market diversification.

More reading

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• 3 top Warren Buffett quotes for ASX investors this week

Phil Harpur owns shares of Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia owns shares of and has recommended Telstra 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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