There are a group of ASX shares that I would describe as elite and worth holding for years to come.
I think the two ASX shares below offer the potential of solid long-term returns, good diversification and would improve most investor portfolios.
These are two that I really like the look of:
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
WHSP is a leading investment house that has been going for over a century. Not many ASX shares can say that. Of course, WHSP has evolved a lot since it first listed as a pharmacy business.
It’s now across various sectors like telecommunications, property, building products, financial services, agriculture, listed investment companies (LICs) and resources.
The ASX share has been growing and diversifying its asset base for a long time. The potential acquisition of Milton Corporation Limited (ASX: MLT) could help diversify the WHSP portfolio further.
I don’t think WHSP will produce incredible returns, but it could continue to steadily compound its underlying value and improve the portfolio over time. The diversified portfolio really helps lower risks. Its defensive portfolio names can help with reliability during downturns, like we saw during the worst of COVID-19.
WHSP also has an impressive dividend record with growth over the last two decades.
BetaShares Global Sustainability Leaders ETF (ASX: ETHI)
This is a high-quality exchange-traded fund (ETF) ASX share that ticks a lot of boxes in my opinion.
It has a good amount of holdings, which reduces individual company risk. There are 200 positions in the portfolio.
And many of those positions are high quality – Nvidia, Apple, Visa, Home Depot, PayPal, Mastercard, Adobe and ASML are among the best in the world at what they do.
To get to this list of 200, the ETF starts with all of the large global shares, and then reduces it by excluding ‘unethical’ sectors like gambling, alcohol, fossil fuels, weapons and so on. It only picks ones that are among the climate leaders in their sector. The fact that IT has a weighting of 41% is very attractive because that’s the sector where a lot of growth and strong profit growth can usually be found.
The ETF has an annual management fee of 0.59%, which isn’t bad considering the global and ethical nature of the holdings. Other similar investment options cost more. The US is responsible for around 70% of the businesses, but the other 30% is from the rest of the world. That’s pretty good diversification.
Past performance is not a reliable indicator of future performance, but the ETF has done well since it started in January 2017, with average net returns of almost 23% per year since inception.
