I think some of the best shares to buy right now are located in the FTSE 100. With that being the case, here are two companies listed on the blue-chip index I’d buy for my portfolio right now.
FTSE 100 wealth manager
Schroders (LSE: SDR) this one of the world’s most respected wealth managers. It might not be the largest in the space, but its reputation is renowned around the world. This is the company’s most considerable competitive advantage. Larger American asset managers might have more money to manage, which allows them to achieve more significant economies of scale, but Schroders’ reputation works in a similar way.
Customers have flocked to the business over the past year, and it’s also benefited from rising stock markets. According to the company’s 2020 annual results, 75% of its managed funds have outperformed over the space of one year. And 81% outperformed over five years.
Based on these metrics, it’s no surprise to me that group assets under management increased to a record £574bn at the end of 2020.
As long as Schroders continues to do what it does best, find attractive investment opportunities for its clients, I think the FTSE 100 company could be a good investment. That’s not to say the business doesn’t face risks.
As mentioned above, larger competitors can offer clients a slimmer service for a much-reduced fee. What’s more, client retention depends on the group’s ability to outperform. If managed funds start to lag the market, consumers may go elsewhere.
Despite these challenges, I’d buy the FTSE 100 stock for my portfolio as I believe it’s one of the best shares to buy right now.
Shares to buy right now
Associated British Foods (LSE: ABF) is one of the few remaining family-controlled conglomerates on the London Stock Exchange. Its diversification has been helpful over the past 12-months.
While most of the company’s Primark value lifestyle stores have been forced to shut, its food division has picked up the slack. Group revenue from continuing operations for the 16 weeks ended 2 January was 13% lower than the same period last year. However, retail sales slumped 30% year-on-year.
Based on this performance, I think this is one of the best shares to buy right now as a way to play the economic reopening. When the retail stores are allowed to reopen, they could provide a boost to overall group growth.
The main challenges the businesses face are clear. If lockdowns continue, there’s no chance the Primark brand will return to its former glory this year. Rising food prices may also compress margins at the group’s food division. This could hold back a recovery over the next 12-24 months.
Still, considering the group’s diversification and long-term potential, I’d buy the stock for my portfolio today.
