All Aussie investors dream of investing in a winning ASX 200 share which then rockets in value. But when it comes to investing for my kids, the goal is much simpler: good quality businesses with the potential to thrive for decades.
Here are two ASX 200 shares I'd be happy for my kids to own for the next 20 years.
Image source: Getty Images
Telstra Group Ltd (ASX: TLS)
Telstra is a classic ASX 200 defensive stock. The telecommunications company is dominant in Australia. It operates one of the country's largest mobile networks and is a major fixed-line internet provider.
Mobile phone and internet services are now considered daily necessities rather than discretionary items which means demand is very likely to be consistent and stable for many years to come.
This stable demand means Telstra is well-positioned to benefit from a stable and recurring revenue and earnings. And this will be regardless of what stage of the economic cycle we are in.
This type of stock is also perfect for investors who want to hedge against potential volatility elsewhere in their portfolio.
My kids are young, so they have several years worth of potential compounding.
And if that isn't enough, Telstra's defensive nature means it can also pay shareholders a consistent passive income too.
The ASX 200 telco most recently paid shareholders a 10.5 cent per share dividend in March, 90.48% franked. Analysts forecast Telstra to pay a total dividend of 21 cents in FY26, which translates to a forward dividend yield of around 4.1% excluding franking credits, at the time of writing.
TechnologyOne Ltd (ASX: TNE)
TechnologyOne is an entirely different type of ASX 200 stock. Rather than being defensive, it has the potential to give my kids strong growth and good compounding benefits over the long term.
The ASX 200 tech company has been caught up in the tech-sector wide sell-off over the past nine months, but has continued to post some positive financial results. The SaaS (software as a service) ERP business posted its 17th consecutive first-half profit result in mid-May and reaffirmed FY26 guidance.
As a business, however, Technology looks like a promising long-term investment option. The company provides enterprise software to customers which include councils, universities, government agencies, and large businesses.
It has a cloud-based software model which generates recurring revenue. It has a sticky subscriber base because, once customers adopt its software, switching is costly and disruptive.
The ASX 200 business also has the potential for a long runway for growth as more customers migrate to its platform.
What's better is that it looks like TechnologyOne is one of few tech companies which actually benefits from (AI) product development, rather than challenging it.
I think TechnologyOne has the potential to outperform over the long-term.
