There are a few ASX shares in my portfolio that I’m planning to own for an extremely long time.
I think there are big advantages to owning businesses for a long time. It cuts down on brokerage fees and capital gain tax (events).
But, to do that they have to be quality companies that have good long-term prospects:
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
WHSP could be one of the best wealth creation options on the ASX because of its investment house structure.
This ASX share can decide to invest in any sector, asset class or country.
It’s invested in a number of sectors including telecommunications, building products, resources, agriculture, financial services and so on.
Whilst it is mostly Australian-focused, there are some businesses within its portfolio are globally focused such as an Asian healthcare business called Apex Healthcare and an Asian telecommunications company called Tuas Ltd (ASX: TUA).
I think this could be a ‘forever share’. It has already proven its longevity by lasting over a century. The portfolio continues to be future-focused and the assets can shift to what makes the most sense.
It just needs to be purchased at a decent price, which I think is currently below $30.
WAM Microcap Limited (ASX: WMI)
I think that smaller ASX shares have the most potential for making outsized returns.
It is a lot easier to double the size of a business from $500 million to $1 billion than it is from $50 billion to $100 billion.
The WAM Microcap investment team are looking for those businesses with growth potential that the market hasn’t fully recognised yet.
Usually, the names in the listed investment company’s portfolio have market capitalisations of less than $300 million, which is pretty small in the investment world these days.
At the moment, some of the names in the portfolio includes: MyState Limited (ASX: MYS), Tuas, Universal Store Holdings Ltd (ASX: UNI) and PeopleIn Ltd (ASX: PPE).
A key attraction to me about WAM Microcap is that its portfolio will always be focused on the best smaller opportunities around. Therefore, its portfolio should always be an attractive option for growth.
It isn’t cheap in terms of fees, but I think it’s worth it.
Past performance is no guarantee of future performance, but since it started in June 2017 it has produced an average return per annum (before the fees, expenses and taxes) of 25.2%. That level of return allows the LIC to pay good dividends and leave enough in the ‘bank’ for capital growth as well.
At the moment the WAM Microcap share price has a trailing ordinary dividend yield of 6% including the franking credits.
