When you hear people say things like "the average investor under-performs the market" and "investing isn't for everyone", it can put off those who want to seize their own destiny and get started with investing. This is a grave mistake, and one which I believe all of us in the financial education world have a responsibility to try and combat.
With our ageing population, there is going to be more pressure than ever on the government to look after us in retirement and the more people who take their own wealth and future in their own hands, the better.
Here are two ASX shares that would be great starting investments (in my opinion) for a starter portfolio.
iShares Core MSCI World All Cap ETF (ASX: IWLD)
This exchange-traded fund (or ETF) is actually an 'ETF of ETFs', meaning that IWLD holds underlying ETFs as part of its strategy. With IWLD, you get exposure to thousands of companies, small and large, across the developed world, including Japan, the United States (US), Canada, Europe and Australia. With this level of diversity, you are looking at a well-balanced and sector-blind investment vehicle that should pay off well over the long-term.
Its top holdings include US tech names like Microsoft and Apple, but really you are getting exposure to more than 3,800 companies across these regions. IWLD is currently yielding a 2.52% distribution, so you get a nice income stream on the side as well. IWLD charges a management fee of 0.09%, which is extremely cheap and a small price to pay for such large diversification.
Magellan Global Trust (ASX: MGG)
Magellan Global Trust is an investment vehicle with a slightly more convictive strategy, investing in 15 to 35 of the world's best global stocks, whilst targeting a 4% cash distribution yield. Currently, MGG invests in companies like Visa, Starbucks, Facebook and Reckitt Benckiser (that's Benckiser, not Ralph) so you can be confident your money is going into quality companies from around the world.
Because MGG is an actively managed listed trust, you will have to pay a higher management fee (1.35%), but MGG has demonstrated the performance to make this worthwhile (in my opinion), having returned 16.22% per annum since its inception. I think MGG is another great option for beginners, due to its robust performance history and solid investment strategy.
Foolish takeaway
In my opinion, either of these ASX-listed investment vehicles would make a great choice for anyone who wants to put their money to work but doesn't know where to start. IWLD is definitely the 'safer' option due to its diversity and cheap fees, but if you're looking for more performance and a little more risk, MGG is also a great option.
