I’d say that the world’s best global shares can be found in the US and UK. Several mega-cap giants are listed in the US, but many are also closer to home than we might think. For instance, in total, FTSE 100 companies derive 75% of their earnings from overseas.
Fuelling my ISA
I’m looking for the best global shares I’d like to buy now for my Stocks and Shares ISA. First I’d consider oil major Shell (LSE:SHEL). Not only is it the largest company in the Footsie, but it also has the ninth largest turnover in the world. Shell shares are up by 20% so far this year. That follows a 34% gain in 2021. Its performance has been helped by a rising oil price. Crude oil prices have more than quadrupled since the lows of the pandemic back in April 2020. Oil prices climbed throughout much of 2021 as countries slowly opened up their economies post-pandemic restrictions. More recently, political disruption has also helped keep fuel costs elevated.
A word of warning though. Oil prices are notoriously volatile. At some point, they could just as easily tumble. If that were to happen, Shell shares could suffer in the near term.
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But what I like about Shell as an investment is its cash flow generation and its discipline in returning cash to shareholders via dividends and share buybacks. It currently offers a dividend yield of around 4%. That’s not the highest among its Footsie peers, but I believe it’s reliable and stable.
Giant global shares
When I think of global shares I often think of the US technology giants like Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT). Although listed in the US, they operate all over the planet and are amongst the largest companies in the world. Technology shares have taken a tumble so far this year. This can most clearly be seen by looking at the tech-heavy Nasdaq 100, which is down 15% year-to-date.
The reason for the weakness is mainly due to expectations that the US Federal Reserve will increase interest rates and remove quantitative easing with the aim of controlling inflation. Both measures have helped to propel tech stocks higher over several years so they could remain under pressure in the near term.
Excellent companies
That said, both Microsoft and Apple are excellent and well-run companies. They offer double-digit profit margins and have enviable competitive advantages. They both churn out ample cash and have rock-solid balance sheets.
Popular investor Warren Buffett is known to like companies that have a moat. Like a moat protects a castle, a durable competitive advantage can protect a company. That’s why it’s encouraging to see Apple form 45% of Buffett’s investment firm Berkshire Hathaway‘s holdings.
Taking a multi-year view, I reckon both Apple and Microsoft will turn out to be excellent investments. They’ve both managed to churn out a phenomenal 25% annual return over the past decade. That’s enough to turn £10,000 into £93,000. Although the past can’t predict the future, and the coming months could be uncertain, I’d still buy both of these global shares.
