Whenever I buy an ASX share, I do so with the full expectation of holding it for life. Like Waren Buffett, I believe that the ideal timespan for holding a quality share is "forever".
It doesn't always work out that way, and I have had to sell plenty of shares that failed to meet my expectations over the years. But today, let's discuss three ASX shares and exchange-traded funds (ETFs) that I think are great investments to hold for at least the next five years and beyond.
I've owned two of them for a number of years, and I can safely say I expect to continue to do so.
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3 ASX shares to buy and hold for at least five years
BetaShares Global Cybersecurity ETF (ASX: HACK)
There are many trends that I'm excited about on the ASX. From lithium to hydrogen power, the stock market is a great place to check out the future technologies of tomorrow. However, I regard cybersecurity to be one of the surest bets when it comes to future-facing industries. Every few months now, it seems that another company or piece of infrastructure is subject to a damaging cyber attack.
We've seen major ASX shares report serious breaches in recent years, ranging from Medibank Private Ltd (ASX: MPL) to TPG Telecom Ltd (ASX: TPG) and TechnologyOne Ltd (ASX: TNE). I can't envision a scenario where the threat of cyberattacks around the world does nothing but rise for the foreseeable future.
A great way to benefit from this trend is by owning the BetaShares Global Cybersecurity ETF. We've all seen the enormous damage to a company's reputation that a cyber attack can cause. As such, it's likely that most companies will be happy to pay top dollar for the best protection they can get.
This ETF holds a range of companies that seek to fulfil this role. Ranging from Okta and Palo Alto to Cisco Systems and Fortinet, these are arguably some of the best cybersecurity shares money can buy. Since its inception in 2016, HACK investors have enjoyed an average annual return of 16.39% per annum (as of 31 October).
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
Another ASX ETF, we have one of my personal holdings with this Wide Moat ETF. A 'moat' is a concept popularised by Warren Buffett. It refers to an intrinsic competitive advantage that a company can hold which protects it from competitors. It could be a powerful brand (a la Coca-Cola or Apple) or a product or service that is hard to avoid using (a Transurban Group (ASX: TCL) toll road for example).
This ETF uses a methodology that seeks to identify the presence of these moats and only holds American companies within its portfolio that fulfil this criteria. At present, it holds names like Disney, Alphabet, Nike and Campbell Soup. Even Buffett's own Berkshire Hathaway is present.
Investors in the MOAT ETF have enjoyed an average annual return of 14.56% per annum since its inception in 2015.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
At last, we get to Washington H. Soul Pattinson, or Soul Patts for short, the favourite ASX share in my portfolio. Soul Patts is often called the Berkshire Hathaway of the ASX. And for good reason. It is an investment house that owns a vast portfolio of assets. These range from ASX shares to private credit and private companies and assets.
Soul Patts has an impeccable performance track record. As of 31 July, the company has delivered an average total shareholder return (including the assumption of reinvested dividends) of 12.5% per annum for the past 20 years.
Speaking of dividends, Soul Patts is also the only share on the entire ASX that has delivered an annual dividend pay rise since the year 2000. That's 23 years and counting. As such, I would happily recommend this series to anyone looking for a great investment to hold for life.
