I often write about how Australians are far too invested in domestic-focused ASX businesses like Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS). In my mind, the best place to go for growth is overseas.
Australia only has around 2% of the listed shares in the world. That means we're missing out on 98% if we're not taking advantage of international shares. But, how are you supposed to know where to invest? There are thousands upon thousands of stock choices in North America, Asia and Europe.
You could just invest in the Vanguard MSCI Index International Shares ETF (ASX: VGS), which gives exposure to all the biggest businesses in the regions I mentioned. However, I like to try to beat the index.
That's why I think MFF Capital Investments Ltd (ASX: MFF) is such a good option. It's a listed investment company (LIC) run by one of the co-founders of Magellan Financial Group Ltd (ASX: MFG), Chris Mackay.
MFF Capital has been one of the best performing LICs over the past five years. According to Baillieu Holst Research, at the end of February 2018 MFF Capital was the only LIC to deliver total shareholder returns of above 20% per annum, at 20.3%, over the past five years.
Mr Mackay has more than $120 million of his family's wealth invested in MFF Capital shares – he clearly believes in what he's doing there.
MFF Capital mainly invests in American-listed companies, although there are other countries represented in its top holdings. Some of those holdings include Visa, MasterCard, Home Depot, Bank of America, Lowe's, Alphabet (Google), Wells Fargo, Facebook and Lloyds Bank. Most of these companies generate revenue from all over the world.
It's highly likely many of the above shares will do well over the coming years. The banks I mentioned should benefit in the short-term from the rising interest rates. The tech shares are growing strongly and are at reasonable valuations. Payments continue to shift to cashless transactions.
Foolish takeaway
I'm a fan of MFF Capital and would like to increase my holdings of it in time. At the current price of $2.47 it's trading at a discount to its pre-tax NTA of $2.71 and a premium to its post-tax NTA of $2.26. I'd be happy to buy a parcel at the current price, but I'd want to be aware of how closely MFF Capital is linked to the strength of the US economy. President Trump is unpredictable.
