Buying and owning ASX shares can be a great way to build wealth. If I were given $20,000 to invest, there are a number of opportunities I'd want to jump on.
Growth companies can be strong investments because they can deliver compounding returns. They also potentially have the financial power of a snowball rolling down a hill as they reinvest profit into growth options within the business.
I'd only want to invest in companies with a long growth runway so they have ample room to deliver on that potential.
With that in mind, the three ASX shares below are where I'd put $20,000 into investments.
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Brickworks Limited (ASX: BKW)
Brickworks is the largest brickmaker in Australia. It also produces pavers, roofing, cement, masonry and stone, and specialised building systems. Plus, the company is a major brickmaker in the United States.
Construction weakness in the US and Australia has, in my view, caused the Brickworks share price to drop around 10% since July and opened up the current opportunity. I'd use $5,000 to buy Brickworks shares.
I like the company's large holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares because its long-term-focused portfolio provides diversification and capital growth.
Brickworks also has a range of property assets that provide defensive rental profits and are helping to add to Its underlying value. The company owns half of an industrial property trust, which is benefiting from the current strong demand for industrial property.
Brickworks has outlined how the property trust net rent can grow from the current rental income of $172 million to a potential $339 million as more warehouses are completed and rental contracts updated.
Tuas Ltd (ASX: TUA)
Tuas is a Singapore-based telecommunications business that was spun out of TPG Telecom Ltd (ASX: TPG).
The Asian telco is winning over new subscribers in Singapore thanks to its cheaper offering. Tuas' boss, David Teoh, is following the same playbook that achieved so much success in Australia with TPG.
Tuas is delivering impressive operating leverage – in the HY24 result, revenue rose 38% to $54.7 million and operating profit (EBITDA) grew by 56% to $22.4 million.
If Tuas' subscriber base continues growing, I think it has every chance to keep growing strong profit, enabling the ASX share to outperform the market. I'd invest $5,000 of the $20,000 into this option.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
Because of its investment style, I think this is one of the best exchange-traded funds (ETFs) on the ASX.
It only invests in companies with competitive advantages (economic moats) that are expected to endure for at least two decades. In other words, these are businesses that will be around for a long time.
From that list of strong companies, the MOAT ETF only invests when the Morningstar analyst team believe the value is noticeably cheaper than what they see as the company's fair value.
I think this strategy is why the MOAT ETF has managed to deliver an average annual return per year of 15.5% over the prior five years. Past performance is not a reliable indicator of future performance, of course, but I think the setup can keep delivering. That's why I'd invest $10,000 in this fund.
