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3 shares to instantly diversify your portfolio

The average investor has a lot of their portfolio invested in some of the biggest shares of Australia. Not only that, a lot of those shares are all in the same industry. Owning shares of Commonwealth Bank of Australia (ASX: CBA), Bank of Queensland Limited (ASX: BOQ) and Westpac Banking Corp (ASX: WBC) isn’t a diversification strategy.

Here are three shares that could instantly diversify your portfolio:

Xero FPO NZX (ASX: XRO)

Xero is the provider of the leading accounting software in Australia and New Zealand. The key selling point about Xero is that all of its software is cloud based. This means business owners, bookkeepers and accountants can all access the client’s Xero software anywhere, even on a tropical island (if it has internet access).

The cloud accounting and automation tools together provide business owners and advisors with a big incentive to keep using the software.

The market has finally realised Xero’s global potential, with the share price rising from $17 at the start of the year to today’s $28. The growing profit margins and rapid expansion in the UK could see Xero’s share price continue to climb nicely.

Costa Group Holdings Ltd (ASX: CGC)

Costa is one of the most exciting food companies on the ASX in my opinion. It has various farms dotted around Australia, Asia and North Africa. It grows various food types including avocadoes, berries, mushrooms and tomatoes.

The Australian and global populations are growing, meaning demand for food will continue rising. There seems to be a pleasing trend towards healthier eating these days, which should further support demand for Costa’s products. Management have predicted that underlying profit could grow by 20% in FY18.

Ramsay Health Care Limited (ASX: RHC)

Ramsay is one of the leading private hospital operators in the world. It’s been a rock-solid investment for shareholders over the last decade and I think there’s a lot more growth to come.

The ageing demographics of Australia should result in increasing patient numbers at Ramsay’s hospitals. Growing profit margins and more hospitals should mean that Ramsay’s earnings per share keeps growing by high single digits or low double digits for many years to come.

Foolish takeaway

At the current prices my order of preference would be Ramsay, Xero and finally Costa. Today’s prices for Ramsay and Xero could appear quite cheap, but Costa will have to deliver strong growth over the next year or two to justify its high price/earnings ratio.

Other awesome shares that would really diversify your portfolio are these top growth shares.

Top 3 ASX Blue Chips To Buy In 2018

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Motley Fool contributor Tristan Harrison owns shares of Ramsay Health Care Limited. The Motley Fool Australia owns shares of Xero. The Motley Fool Australia has recommended COSTA GRP FPO and Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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