If I won the lottery I’d want to buy high-quality ASX shares to protect and grow my wealth.
Winning the lottery would be a life-changing event. But I wouldn’t want to spend it all and be back to square one in a few years. I would want to invest it. That way I’d receive investment income for many years. It could fund my life forever! Shares are currently cheaper because of the COVID-19 pandemic.
These are the ASX shares I’d buy:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) – 25% of the portfolio
Soul Patts could be one of the best ASX shares for long-term reliability and dividends. It’s an investment conglomerate that has grown its dividend every year since 2000. That’s the best dividend growth record on the ASX.
It’s invested in a variety of different listed and unlisted businesses. There’s good diversification with businesses like TPG Telecom Ltd (ASX: TPM), resources, agriculture and swimming schools.
Soul Patts currently has a grossed-up dividend yield of 4.4%.
Rural Funds Group (ASX: RFF) – 10% of the portfolio
Rural Funds is a real estate investment trust (REIT) that owns a portfolio of farms. I think it’s a good ASX share for the long-term. Farmland has been a useful asset for many hundreds of years, I think that will continue to be the case for the rest of my lifetime.
It aims to increase its distribution by 4% each year. With a starting FY21 yield of 5.7%, I think Rural Funds will generate pleasing income in the coming years. The ASX share’s weighted average lease expiry (WALE) is currently more than 10 years – that provides attractive income visibility and security.
Magellan Global Trust (ASX: MGG) – 25% of the portfolio
Magellan Global Trust is a listed investment trust (LIT) invests in the highest-quality global businesses it can find. That means it doesn’t invest in ASX shares.
Some of the businesses that it’s invested in are Alibaba, Tencent, Facebook, Alphabet, Microsoft and Reckitt Benckiser. The LIT’s portfolio provides a good mix of growth shares and defensive shares.
One of the most attractive things about this LIT is that it targets a distribution yield of 4%. That’s a solid yield in today’s low interest environment. The RBA rate is just 0.25% right now.
WAM Leaders Ltd (ASX: WLE) – 15% of the portfolio
WAM Leaders is a listed investment company (LIC) that invests in the larger ASX shares.
It’s a fairly active LIC, so it can move money to different shares around to outperform the ASX in good times or bad times. WAM Leaders can also increase its cash position to provide protection and buy opportunities if the ASX drops.
The LIC has grown its dividend each year since FY17. It was formed in May 2016. It currently offers an annualised grossed-up dividend yield of 8.6%.
Betashares FTSE 100 ETF (ASX: F100) – 15% of the portfolio
UK shares are pretty similar to ASX shares in some regards. One of the most important similarities is that UK shares also have a reasonably high dividend payout ratio. That’s why this exchange-traded fund’s trailing underlying yield was close to 6% at the end of April 2020.
This ETF provides attractive diversification with the 100 biggest businesses on the London Stock Exchange. Some of the businesses it’s invested in are healthcare giants GlaxoSmithKline and Astrazeneca, consumer product leaders Unilever and Reckitt Benckiser, resource giants BHP and Rio Tinto, global alcohol business Diageo and multinational bank HSBC.
Brickworks Limited (ASX: BKW) – 10% of the portfolio
This ASX share is one of the most reliable dividend options around. It hasn’t cut its dividend for over 40 years. Brickworks currently has a grossed-up dividend yield of 5.5%.
It may be best known as a building products business, but it’s the other divisions which effectively fund Brickworks’ dividend. It owns almost 40% of Soul Patts, which as I mentioned above, pays a very reliable dividend.
Brickworks also owns 50% of a compelling industrial property trust alongside Goodman Group (ASX: GMG). These properties are generating attractive rental income and the trust is working on a large new project at Oakdale in NSW.
Each of these ASX shares has a solid starting dividend yield and could generate attractive capital growth over time. If I won the lottery I think these picks would help fund my life for the foreseeable future.
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Returns As of 6th October 2020
Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and 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.