There are not many ASX growth shares that I think are worth being in every portfolio.
But, I think unless you’re going to concentrate on the best ASX shares you may as well just go for a high-quality exchange-traded fund (ETF) like iShares S&P 500 ETF (ASX: IVV).
I think the below three ASX shares are some of the best on the ASX:
Altium Limited (ASX: ALU)
In my opinion, Altium may be the best ‘growth’ business on the ASX because it ticks all of the boxes.
It provides market-leading services that are changing the electronic PCB software design industry, so in that aspect it’s future-proofing itself. It has zero debt on its balance sheet, it’s consistently growing its revenue and profit margins. It fully expenses its research and development costs. It has a high-quality client base and it is frequently adding to its revenue streams with new & improved products.
However, the market certainly recognises the quality of Altium – it’s trading at 47x FY20’s estimated earnings.
MFF Capital Investments Ltd (ASX: MFF)
This is one of my favourite listed investment companies (LICs) on the ASX, it invests in the highest-quality businesses in the world, its top holdings include MasterCard, Visa, Home Depot, Bank of America, JP Morgan Chase and Alphabet. Many of its holdings generate global earnings, which provides a good level of defensiveness.
Out of all of the LICs, it has one of the lower annual management costs and perhaps the best performance over the past five years. It has a better investment universe to choose from with the other 98% of shares listed outside of Australia compared to ASX-only LICs.
The MFF Capital share price is trading at a 6% discount to its pre-tax net tangible assets (NTA) per share.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is perhaps my favourite business on the ASX. It’s an investment conglomerate that has been operating for over a century and it has been paying a dividend every year in that time including through wars, recessions and other problems.
It has a variety of smaller holdings, but its larger holdings have been long-term investments that Soul Patts has made a lot of money from, such as Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPM), Australian Pharmaceutical Industries Ltd (ASX: API) and New Hope Corporation Limited (ASX: NHC).
It’s trading at 17x FY20’s estimated earnings with a grossed-up dividend yield of 3.5%
I think all three of these shares would be great in any portfolio, which is why all three are in my portfolio. I plan to hold all of them for at least the next decade or more. At the current prices I think Soul Patts is the most attractive option.
5 stocks under $5
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Motley Fool contributor Tristan Harrison owns shares of Altium, Magellan Flagship Fund Ltd, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Brickworks. 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 Scott Phillips.