There are some ASX shares that could be candidates to buy and hold forever.
It can be hard to find ideas for your portfolio that could be a ultra-long-term investment. Some businesses are in a rapidly changing industry. For example, I’m not sure I could invest in a share like Afterpay Ltd (ASX: APT) or Servcorp Limited (ASX: SRV) simply due to the unknown demand and profitability of those industries in the future. There will always be unknowns in investing, but there’s too many different outcomes for me.
But I could see myself buying and holding these ASX shares forever:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts could be the best ASX share for a buy-and-hold-forever approach. It’s an investment conglomerate that has been around since the early 1900s. It has already shown that it can stand the test of time.
The investment house owns a diversified portfolio of businesses such as TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), Australian Pharmaceutical Industries Ltd (ASX: API) and Clover Corporation Limited (ASX: CLV). It also owns some unlisted businesses outright like swimming schools and resources.
Never needing to sell should also mean never having to cause capital gains tax events.
As a bonus, at the current Soul Patts share price, it offers a grossed-up dividend yield of 4.3%.
Xero Limited (ASX: XRO)
Xero is a cloud accounting software business, one of the biggest and best in the world. It’s growing subscribers at a good rate in Australia, the UK and the US. In the FY20 result, total subscribers rose by 26% to 2.285 million and average revenue per user increased by 2% to NZ$29.93.
There are only two things certain in life, death and taxes. Xero helps businesses operate and organise their financial information. The ASX share offers an array of different automation and time-saving tools. The numbers are also presented in a “beautiful” way.
As long as there are businesses and tax, there will be demand for Xero’s accounting software services. It just needs to keep investing in development so that its product is the best for customers.
However, at the current Xero share price I don’t think it’s a cheap buy right now.
Infratil Ltd (ASX: IFT)
Infratil is a diversified New Zealand business which is invested in a variety of different sectors.
It’s involved with various energy projects, it owns 66% of Wellington Airport, it owns almost half of a data centre business, it owns half of Vodafone New Zealand, it owns a diverse commercial real estate portfolio, it’s involved with Australian Social Infrastructure Partners and it owns half of RetireAustralia which is the largest privately-held pure-play retirement operator in Australia.
All of these divisions are long-term investments and the ASX share can continue to invest where it think will make good long-term returns. I think the company could add a lot of attractive diversification for long-term investors.
At the current Infratil share price it offers a 3.3% dividend yield. COVID-19 has caused a bit of a selloff, so it could be an opportunistic buy.
Rural Funds Group (ASX: RFF)
Rural Funds is an agricultural real estate investment trust (REIT) which owns farms in a variety of different sectors: cattle, cotton, almonds, macadamias and vineyards.
Farmland has been a useful asset for humanity for many hundreds of years. I don’t think that’s going to change in the next couple of decades.
The ASX share aims to increase its distribution by 4% per annum. I think that’s a solid growth rate considering how low inflation and interest rates are at the moment.
I’m not expecting huge growth from Rural Funds, but it’s the type of investment that can deliver solid compounding returns.
At the current Rural Funds share price it offers a distribution yield of 5.6%.
I’d be happy to own each of these ASX shares for at least a decade. At the current prices I’d probably go for Soul Patts first for its long-term history and diversification, but Infratil is also an interesting idea.
Where to invest $1,000 right now
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Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Clover Limited and Xero. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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.
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