These 2 ASX growth shares could be great long-term investments at the current prices, like Australian Ethical Investment (ASX:AEF).
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ASX growth shares can be good ideas to think about because they may be able to generate good long-term returns.
Businesses that can generate good profit growth and re-invest strongly into the business can lead to good shareholder returns.
These two ASX growth shares could be good considerations:
Australian Ethical Investment Limited (ASX: AEF)
Australian Ethical is a fund manager that aims to offer a range of investment strategies that aim to invest in businesses that are doing good for the world and the environment.
The company boasts that it has been named as one of just six global leaders, out of 40, for ESG commitment by Morningstar. It was the only asset manager in Australia to receive this recognition.
There are three pillars to its investments. Regarding the planet, every decision is made with empathy and compassion for the planet and all those that inhabit it. Regarding people, Australian Ethical says that environmental and social concerns need to be given equal weight to financial outcomes. Finally, with regards to animals, it doesn’t invest in anything that’s unnecessarily harmful to animals.
The ASX growth share is seeing good levels of funds under management (FUM) inflows as well as solid investment performance.
In the result for the period ending 31 December 2020, FUM had grown to $5.05 billion – an increase of 30%. The ASX growth share saw record net inflows of $422 million (up 43%) and customer numbers were up 22% year on year.
Australian Ethical generated underlying profit after tax (UPAT) of 11% to $4.9 million and statutory profit went up 17% to $5.2 million. This allowed the board to increase the dividend by 20% to 3 cents per share.
The company continues to invest in growth initiatives, with $1.7 million of expenditure in the first half.
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
This could be one of the highest-quality exchange-traded funds (ETFs) on the ASX. The ASX growth share aims to invest in businesses, chosen by Morningstar equity analysts, that are believed to have sustainable competitive advantages, or wide economic moats.
Businesses with moats essentially mean that they’re hard to dislodge by competition. Imagine how much you’d have to spend to make a smartphone that people would buy rather than an Apple or Samsung one.
But this isn’t just a passive index. The holdings are businesses that are trading at attractive prices relative to Morningstar’s estimate of fair value. But it doesn’t come with an expensive active management price tag. The annual management fee is just 0.49% per annum.
All of the holdings in the ETF’s portfolio are listed in the US, but some of the names generate earnings from right across the world.
There are around 50 positions. Whilst there are names like Amazon.com, Alphabet and Microsoft in the portfolio, the top 10 holdings are not the typical largest positions in an ETF including: Charles Schwab, Wells Fargo, Corteva, Bank of America, US Bancorp, Boeing, Cheniere Energy, Intel, John Wiley & Sons and Blackbaud.
Where to invest $1,000 right now
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*Returns as of February 15th 2021
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- Here’s why the Australian Ethical (ASX:AEF) share price is crashing 10% lower
Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.