Investing in ASX shares for the long-term future of my children sounds like a great idea.
I certainly wouldn’t want to pick a ‘hot’ stock or a cyclical resources business for them. I want to choose ASX share ideas that reflect my own investment thinking, that could be held for decades and would generate solid compounding returns for my children.
With the above in mind, here are three ASX share ideas:
iShares S&P 500 ETF (ASX: IVV)
My favourite investor, Warren Buffett, has often said that people would do well by just investing in a S&P 500 fund. This is certainly advice I can get behind.
This ETF that you can buy on the ASX invest in 500 of the largest businesses listed in the US, but they earn money from across the globe, so think of them as global businesses. You are investing in high-quality international businesses like Microsoft, Amazon, Apple, Berkshire Hathaway and others when you pick this ETF, which are likely to be top performers for quite a while, unless they’re broken up.
It has an annual management fee of only 0.04% per annum, which is exceptionally cheap.
As long as capitalism is the way of doing things on Earth then this ETF will be (at least) a decent long-term investment.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts has been operating for over a century. The fact that it’s an investment conglomerate and can adjust its underlying assets to the businesses of the future gives me confidence Soul Patts will be around for many decades to come. ‘Optionality’ is very important.
Management are big shareholders themselves, so they are very shareholder aligned and are unlikely to take unnecessary risks.
Soul Patts has an impressive market-beating record over the long-term and I hope it can continue to do well with its newer investments. I’m also attracted to its steadily-growing dividend which has increased every year since 2000.
Future Generation Investment Company Ltd (ASX: FGX)
This is a listed investment company (LIC) with a big difference compared to most other LICs.
It doesn’t charge any management fees or performance fees, instead it donates 1% of its net assets each year to youth related charities. It invests in the funds of Australian fund managers who work for free for Future Generation, which is a great initiative.
With Future Generation, I like that it is supporting disadvantaged youth whilst also aiming to grow the dividend for shareholders.
It currently has a grossed-up dividend yield of 5.9%.
I think all three of these shares would be great to own for at least the next decade. The S&P 500 ETF might be the ‘safest’ over the long-term with how technology focused it is, but it may fall the most during shorter-term market dips relating to recessions.
These great ASX shares could also be solid performers over the long-term for capital growth and income.
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Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO 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. 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.