I love investing in ASX shares for the long term, though there are only a few I could see myself committing to for the ultra-long term.
By ultra-long-term, I don't just mean for five or ten years. I'm thinking about several decades ahead.
Every sector may change significantly by the time I'm 100, so I like the idea of investing in companies that have the flexibility to change which industries they earn profit from. Investment businesses, like the two in this article, have the capability of changing their portfolios through asset sales and purchases. That's exactly what I'm looking for.
Let's take a look at two of my favourites below.
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Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
This ASX share has an incredible record of stability and long-term growth. It has already been operating for 120 years and looks like it could easily be around in another century.
The investment conglomerate owns a mixture of listed (mostly ASX) shares and private assets.
Its portfolio includes TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC), Pengana Capital Group Ltd (ASX: PCG), BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES), Commonwealth Bank of Australia (ASX: CBA), and Goodman Group (ASX: GMG).
Non-ASX investments include healthcare, swimming schools, agriculture, property, and credit.
I think this ASX share is a good investment because Soul Patts itself invests for the long term. Additionally, it has maximum investment flexibility to find the right assets that suit its investment objectives of capital growth and cash flow growth.
The growing dividend is an excellent feature of this business, but it is not the primary factor that leads me to expect to own this business for decades to come.
I believe Soul Patts has the potential to be around longer than virtually every other S&P/ASX 200 Index (ASX: XJO) share because of its freedom to invest anywhere (including overseas) and adjust the portfolio over time.
Hearts and Minds Investments Ltd (ASX: HM1)
Listed investment companies (LICs) are companies focused on making investments for shareholders. Depending on the investment mandate of the LIC, each portfolio could be targeted at a different asset class.
Hearts and Minds' portfolio is decided by a number of fund managers and investment experts who provide their choices for free so that the LIC can make sizeable donations to medical research each year.
Some picks are decided by a group of core portfolio managers, while other picks are decided each year at an investment conference called Sohn.
Hearts and Minds says this structure provides diverse industry and regional exposure while maintaining conviction in every investment.
It's invested in names like Amazon, Mercado Libre, Microsoft, Nvidia, Rokt, TSMC, and Airbus.
I like how it has a diverse portfolio of international and ASX shares, with the portfolio performing strongly. Over the last three years, its portfolio has returned an average of 16%, which I'd call a strong track record.
I believe this setup can deliver solid long-term investment returns and a rising dividend.
The Hearts and Minds share price regularly trades at a double-digit discount to its underlying net tangible assets (NTA), which is a very appealing valuation, in my opinion.
There's a lot to like about this ASX share, and I believe its portfolio can outperform the ASX 200 in the coming years.
