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How I’d invest £10k: I’d buy these 2 bargain FTSE 100 shares in a Stocks and Shares ISA

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Risks to the global economic outlook may be high at present. Continued increases in tariffs as part of a wider global trade war appear to have caused investors to become increasingly cautious over recent months. This has led to a challenging period for the FTSE 100, which has seen the index decline by 6% in the last three months.

Although further falls cannot be ruled out, now could be a good time to buy undervalued shares. They may offer wide margins of safety that lead to increasing profitability for their investors over the long run. So here are two prime examples that could be worth buying in a Stocks and Shares ISA today.

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Polymetal

The prospects for gold miners such as Polymetal (LSE: POLY) have improved significantly over recent months. The price of gold has moved higher after a lacklustre performance over recent years, with declining US interest rates and an increasing level of fear among investors leading to higher demand for the precious metal.

This could be good news for Polymetal’s financial outlook. In fact, it’s forecast to post a rise in its bottom line of 16% in the current year, followed by further growth of 19% next year. Despite an improving rate of earnings growth, the stock trades on a price-to-earnings growth (PEG) ratio of just 0.9. This suggests it could offer a margin of safety – even though its share price has surged higher over recent months.

Of course, an improving global economic outlook could cause gold miners to become less popular among investors. However, with the stock offering an appealing valuation, and scope to deliver further growth, it could prove to be a worthwhile purchase.

Aviva

Another FTSE 100 stock that currently appears to offer good value for money is insurance business Aviva (LSE: AV). Its shares are now trading on a price-to-earnings (P/E) ratio of just 6.6, with investors seemingly concerned about its mixed recent results.

Although they showed the company delivered strong general insurance results, it also suffered from weak operating conditions in life insurance and asset management. As such, its operating profit for the first six months of the year increased by just 2%.

Looking ahead, Aviva is reviewing its Asian businesses in order to maximise their growth potential. It’s also seeking to deliver an improved customer experience to enhance its competitive position. Such changes could lead to a stronger financial outlook for the company, with its plans to cut leverage also providing an improved foundation for long-term growth.

Therefore, the stock may be undergoing a period of change at the present time that causes investor sentiment to remain weak in the short run. But its long-term growth prospects appear to be bright, while a low valuation suggests it offers investment appeal.

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Peter Stephens owns shares of Aviva. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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