I'm always on the lookout for ways to diversify my ASX portfolio whilst maintaining strong returns with ASX shares. If you can mitigate risk whilst also beating the market then that's a powerful combination.
Diversification usually means investing into different industries and perhaps businesses that offer geographical diversification away from Australia.
Here are three shares that I think would offer good diversification:
Pushpay Holdings Ltd (ASX: PPH)
The donation payments business is quite different to most other businesses on the ASX with its mostly international earnings and different client base, it is currently servicing large and medium churches. Religion is a big opportunity for Pushpay with how much is donated and how regularly (at least on an annual basis) that people dip into their pockets to give.
Pushpay is now reaching profitability yet it continues to add more churches and more customers. There are plenty more organisations that Pushpay can provide services to in the US and indeed other countries. Revenue could keep growing at double digits for quite a while, leading to good compounding returns.
Magellan Global Trust (ASX: MGG)
Magellan Global is one of the best long-term performing listed investment businesses on the ASX. After all fees it has generated a net return of 15.4% per annum since inception in October 2017.
It has managed to achieve these solid returns by only holding the highest-quality shares in the world in its portfolio. Some of the current largest holdings include Alibaba, LVMH, Microsoft and Visa.
You simply can't find businesses that are as big and high-quality as the ones that Magellan Global Trust is investing in overseas.
Magellan Global Trust won't always produce such strong results year to year, but I think it's a good long-term option with its quality diversified holdings.
Brickworks Limited (ASX: BKW)
Brickworks is best known for its Australian building products division, but it has a number of other excellent assets including its 50% stake of a growing industrial property trust, its large investment of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares as well as a new North American building products division.
Each division has attractive long-term potential, particularly the new US segment because of how much larger the population of the US is compared to Australia.
Brickworks has one of the best dividend records in the country, it's a very stable option for income.
Foolish takeaway
Pushpay may have the chance to achieve the biggest returns over the next few years because of its small size and fast growth, but it's also the riskiest. I think both Brickworks and Magellan Global Trust would be long-term buys at the current prices, although they have been cheaper in the recent past.
