I think the two ASX shares/ETFs below offer the potential of solid long-term returns, good diversification and would improve most investor portfolios.
These are two ASX investment options that I really like the look of…
1. BetaShares Global Sustainability Leaders ETF (ASX: ETHI)
ETHI is a high-quality ASX exchange-traded fund ASX that ticks a lot of boxes in my opinion. The ETHI ticker symbol is ASX: ETHI.
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.
2. 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.
This article was originally posted on Rask Media and written by the great Jaz Harrison.