Where to invest $5,000 into ASX shares immediately

Given the outlook for inflation and recent economic data, it looks very unlikely that the cash rate will be increasing any time soon.

This means that the paltry interest rates on offer with savings accounts look unlikely to be improving for some time to come.

In light of this, if I had $5,000 sitting in a bank account, I would put it to work in the share market where the potential returns are vastly superior.

But which ASX shares should you buy? Here are two top ASX shares which I think could provide strong returns for investors over the coming years:

a2 Milk Company Ltd (ASX: A2M)

I think a2 Milk Company would be a good option for a $5,000 investment. The fresh milk and infant nutrition company has been an exceptionally strong performer in recent years thanks largely to strong demand for its infant nutrition products in China. This certainly was the case in FY 2020, with a2 Milk delivering a 32.8% increase in revenue to NZ$1,730 million and a 34.1% lift in net profit after tax to NZ$385.8 million.

Pleasingly, I don’t believe its strong growth in the lucrative market is anywhere near ending. Management revealed that the company had just a 2% value share of the mother and baby store market in the country at the end of June. I believe it can grow its market share materially over the next decade thanks to its strong brand and product differentiation. In addition to this, the company has a very strong cash balance of NZ$854.2 million which can be used for value accretive acquisitions. In fact, just last week it announced its plan to acquire a 75.1% stake in Mataura Valley Milk.

Altium Limited (ASX: ALU)

The second share to consider investing $5,000 into is this electronic design software company. The key product in its portfolio is Altium Designer, which has exposure to the rapidly growing Internet of Things and artificial intelligence markets. These two markets are underpinning the proliferation of electronic devices globally and look set to drive strong demand for Altium Designer and its newly released cloud-based Altium 365 offering over the coming years.

Management certainly believes this will be the case. It remains confident the company will achieve its target of US$500 million in revenue, 100,000 subscriptions, and market domination later this decade. This compares to revenue of US$189 million, ~50,000 subscriptions, and market leadership in FY 2020. Due to the quality of its offering, I’m very confident it will get there. This could make the Altium share price a market beater over the next decade.

More reading

• 3 big surprises from the a2 Milk Company full year results
• Is the Altium share price in the buy zone?
• Leading brokers name 3 ASX shares to buy today
• Could these 2 ASX growth shares that crashed last week be a buy?
• 2 of the best ETFs for investing in ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia owns shares of A2 Milk. 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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