The best holding time for a share is forever.
However, there aren’t many shares you can foreseeably hold forever due to future competition, disruption, regulation and so on.
Here are three ASX shares I could hold forever:
Rural Funds Group (ASX: RFF)
We all need food. Humans have needed farmland for thousands of years and I expect farms will continue to be good assets for the rest of my life.
Rural Funds is Australia’s biggest farmland real estate investment trust (REIT). It receives regular rental income from its high-quality tenants like JBS, Olam, Select Harvests Limited (ASX: SHV) and Treasury Wine Estates Ltd (ASX: TWE).
The REIT aims to increase its distribution by 4% per annum for the foreseeable future, so it provides a solid supply of income for shareholders every quarter. The share price has fallen on coronavirus worries, boosting the FY20 yield to almost 6%.
Duxton Water Ltd (ASX: D2O)
Water is extremely important for our living, whether it’s for growing agriculture, washing, manufacturing or consumption.
We can own a bit of the fresh water in Australia with an investment in water entitlement investment company Duxton Water.
It owns around $334 million of water assets with two thirds of it allocated for leased contracts which generates consistent income for Duxton Water which it then pays out as a growing dividend.
With the company increasing its leasing revenue, the company has guided for an interim dividend to be paid in September 2020 which is an annualised grossed-up dividend yield 5.6%.
Unless Australian agriculture businesses no longer need water (entitlements), I can’t see what would make me want to sell my Duxton Water shares.
Magellan Global Trust (ASX: MGG)
One of the hardest things about committing about any particular share for the long-term is that it’s hard to know if the company’s industry will be disrupted in the future.
A way to fix this problem could be to pick an investment business that does the investing for you, which means you could hold shares of that investment business forever so you don’t have change shares yourself.
I think Magellan Global Trust is a particularly good ultra-long-term idea because it ticks many boxes. It targets a 4% distribution yield, so it will always be a decent option for income. It invests in a global portfolio of shares, providing diversification.
Indeed, those global share picks are meant to be some of the best in the world like Microsoft, LVMH and Alphabet (Google) which themselves could be held for many years with solid performance.
All three of these shares have attractive, long-term prospects. At the current prices I’d probably go for Rural Funds in the shorter-term because its rental income is mostly locked in thanks to its contracts, although I expect Magellan Global Trust to generate the strongest returns over the long-term because of its quality and investment flexibility.
The post 3 ASX shares to buy and hold forever appeared first on Motley Fool Australia.
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Motley Fool contributor Tristan Harrison owns shares of DUXTON FPO, MAGLOBTRST UNITS, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Treasury Wine Estates Limited. The Motley Fool Australia has recommended DUXTON FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020