I think that the current market dip is the perfect time to buy some forever shares for your portfolio.
The S&P/ASX 200 Index (ASX: XJO) fell by around 1.6% yesterday and that means lower prices for many of the ASX’s best businesses.
If I get the opportunity to buy a great investment at a cheaper price, I’ll take the market up on that. Not every business is a buy during a market selloff.
But I think these two forever ASX shares could be worth buying during this market volatility:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is an investment conglomerate that has been listed since 1903. It’s one of the oldest businesses on the ASX. It has already proved to be a forever share because it has lasted more than a century.
I think it’s one the best businesses on the ASX. It may not have ultra-high profit margins like a tech share. It doesn’t seem to have the type of fast global growth aspirations that Afterpay Ltd (ASX: APT) has. But it’s consistently generating solid results.
When Soul Patts reported its FY20 result for the period to 31 July 2020, it was able to report that its average total shareholder return (TSR) was 5.1% per annum better over five years and 5.2% better per annum over the previous 20 years.
It has a diversified portfolio of listed and unlisted businesses that ranges from telco giant TPG Telecom Ltd (ASX: TPG) to swimming schools. It owns large stakes in other ASX businesses like Brickworks Limited (ASX: BKW) and Australian Pharmaceutical Industries Ltd (ASX: API).
I think Soul Patts is a forever ASX share because the investment house is regularly adding to its portfolio. For example, in FY20 it invested $127.7 million into the agricultural sector at a time of a difficult drought. I think that was the perfect example of how Soul Patts likes to invest with a contrarian style.
The Soul Patts share price has fallen around 5% since 19 October 2020.
Betashares Global Quality Leaders ETF (ASX: QLTY)
Quality businesses can perform well in both good times and bad, in my opinion. That means the share prices and returns of quality businesses can also give more downside protection.
This exchange-traded fund (ETF) is invested in global businesses which rank well on return on equity (ROE), debt to capital, cashflow generation and earnings stability. These are well run businesses that generate good annual profits for shareholders, they don’t have risky balance sheets and are consistently profitable.
What businesses count among the highest quality in the world? Here are the biggest 10 holdings in the portfolio (out of 150): Keyence, Nike, Texas Instruments, Nvidia, UnitedHealth, Novo Nordisk, Facebook, Intuit, Alphabet and L’Oreal.
The above list is certainly high-quality. And the holdings will keep changing as newer businesses build a reputation for quality. I think it’s a forever share because of that constantly-evolving portfolio.
It’s a pretty cheap ETF with a management fee of just 0.35% per annum. That helps keep the net returns stay strong. The returns have been strong in the short-term and since inception. Over the past year the Betashares Global Quality Leaders ETF has delivered a net return of 17.8% per annum. Since inception in November 2018, the ETF has delivered net returns per annum of 19.6%.
The global nature of this portfolio means that it can be invested anywhere in the world. It has investments from countries like Finland, Spain, France and Denmark. I think it’s the type of ETF you could hold for a very long time.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks 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.