May could be the perfect month to buy ASX growth shares. I think there are several that could deliver strong performance over the long-term.
Assuming the investment is made at a good price, I think that ASX growth shares can deliver stronger returns than ASX dividend shares because of the stronger compounding effects.
I’d love to buy the two names I’m going to write about here:
Vaneck Morningstar Wide Moat ETF (ASX: MOAT)
I think this might be the best exchange-traded fund (ETF) to own over the next five years.
The investment strategy employed by the ETF seems to be working really well – over the last three years it has returned an average of 15.2%, while the last five years has delivered an average return per annum of 16.6%. But, future returns may not be as strong as that.
The focus is on quality US companies that Morningstar believes possess sustainable competitive advantages, or “wide economic moats”. These are businesses that have something that most, or all, other businesses in the industry don’t, such as a loved brand or a powerful network.
But, the ETF only invests in the business if they’re at a good price compared to how much Morningstar thinks the business is worth.
The combination of great businesses at good prices is working very well and I think this will continue. The management fee of just 0.49% seems very reasonable, making it an attractive ASX growth share in my eyes.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
This is one of my favourite businesses – I like that the investment company is constantly looking for assets that can help it deliver cash flow and growth over the long-term.
Some of its current investments include agriculture, swimming schools, Brickworks Limited (ASX: BKW) and electrical parts.
It has beaten the return of the S&P/ASX 200 Index (ASX: XJO) over the long-term. I think it will be able to continue to do so, particularly because it keeps investing in opportunities that are futured focused, such as luxury retirement living.
This ASX growth share isn’t likely to double over the next two years, but I think its asset base and earnings can keep growing at an average in the high single digits over the next few years, combined with a growing dividend.
I hope to make this great business one of the largest positions in my portfolio over the long-term.
