I like to keep my eyes open for ASX shares that I believe will deliver good, long-term capital growth.
Dividends are awesome and very useful for cashflow. However, over the longer-term I think capital gains can compound to produce better results.
The two potential investments in this article are ones that I believe have a very high chance of producing good returns, though I’m not expecting them to produce the biggest returns. Here are they:
WCM Quality Global Growth Fund (ASX: WCMQ)
This ASX share is a quality-focused exchange-traded fund (ETF) which is run by the investment outfit WCM.
It looks for quality global companies that are predominately found in the high growth consumer, technology and healthcare sectors.
WCM say its investment process is “based on the belief that corporate culture is the biggest influence on a company’s ability to grow its competitive advantage or ‘moat’.
“This process has resulted in WCM’s Quality Global Growth Equity Strategy Composite outperforming the MSCI World Index by an annualised 6.2% per annum over more than a decade.”
The focus on both quality and growth allows this investment to perform well both during share market setbacks and also produce long-term growth.
Since the ETF’s inception in August 2018, it has produced an average net return (after fees) per year of 20.7%.
At the moment, some of the leading companies in the portfolio include: Stryker, Sherwin-Williams, Thermo Fisher Scientific, Shopify, West Pharmaceutical Services, Old Dominion Freight Line, LMVH and Amphenol.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This ASX share is another ETF that I believe has a very good chance of producing attractive long-term capital performance.
It’s provided by the ETF provider VanEck, but the actual investments are hand-picked by Morningstar analysts that believe the chosen businesses can continue to generate good profits from their competitive advantages for many years to come, quite likely at least a decade or two into the future.
But, those businesses with strong economic moats are only picked for the portfolio if the companies are at a good price compared to the fair value price that Morningstar has assigned to those businesses.
Some of the names in the portfolio right now are: Wells Fargo, Berkshire Hathaway, Merck & Co, Constellation Brands, Aspen Technology, Corteva, Bristol Myers Squibb, Altria, Campbell Soup, Lockheed Martin, Boeing, Microsoft, Alphabet and Western Union.
One thing to note about this ETF, whether you see it as a positive or negative, is that all of the businesses chosen are listed in the US.
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