The ASX share market regularly goes through volatility, any share price can go down. But there are a few names that I reckon can deliver market-beating returns, aren't overpriced and could be less volatile than the wider local or global share market.
I'm going to talk about three of my favourite long-term ideas, each offering a very different investment exposure.
There are three investments I want to tell you about – an exchange-traded fund (ETF), an ASX share and a listed investment company (LIC). I'd call them all 'unstoppable' investments and I'd love to invest $3,000 in them.
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VanEck Morningstar Wide Moat ETF (ASX: MOAT)
The MOAT ETF is an excellent long-term investment option because of the types of businesses it invests in.
It invests in high-quality US-listed businesses that are seen by Morningstar as having wide economic moats. In other words, competitive advantages that are so strong and enduring that analysts think they could last for the next 20 years.
If the business is able to stay ahead of competitors for that long, it could generate pleasing profit growth for many years to come.
By only investing in these wide moat businesses, investors have a great chance at experiencing long-term returns. Competitive advantages could include things like cost advantages, network effects, patents and so on.
The MOAT ETF only invests in these great businesses when they're trading at a good value price. Therefore, it's a portfolio of great companies at attractive prices.
Over the past ten years, it has returned an average of around 14%.
Sigma Healthcare Ltd (ASX: SIG)
Sigma Healthcare is a leading ASX share in the healthcare space because of its Chemist Warehouse business and its wholesale pharmacy distribution.
Healthcare is a strong long-term growth sector with Australia's ageing and growing long-term population, giving it an earnings tailwind.
With Chemist Warehouse growing total network sales in the double-digits year-over-year, it's clearly got a very exciting future with both strong like-for-like sales growth at the existing locations and adding more locations in Australia and overseas.
Chemist Warehouse is already in New Zealand, Ireland, Dubai and China, with the company recently announcing it's entering the UK market too.
As its scale becomes larger, its profit margins can rise thanks to operating leverage.
I think it could become a significantly larger business if it gets its northern-hemisphere expansion right.
L1 Long Short Fund Ltd (ASX: LSF)
This ASX share is a listed investment company (LIC) that invests in both ASX shares and global shares to find the best opportunities.
It looks across different sectors for opportunities, though it doesn't rely on tech for its investment strategy. It generally looks at businesses with a low price/earnings (P/E) ratio and good earnings growth potential. In other words, businesses that are undervalued.
By investing in undervalued businesses and cyclical names during a weak part in the cycle, the business can deliver great outperformance when the team is right.
L1 Long Short Fund's portfolio has returned an average of 16.3% per year over the past five years, which is an excellent level of performance and helps it deliver both capital growth and dividends. Past performance is not a guarantee of future returns, though.
