If most of your portfolio is made of large cap shares like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Woolworths Limited (ASX: WOW) and Telstra Corporation Ltd (ASX: TLS) then it's time to expand your investment horizon.
Most of the large cap shares could run into trouble over the next few years, which is why I think it's important to invest in other shares that are showing genuine signs of good growth.
Blue Sky Alternatives Access Fund Ltd (ASX: BAF)
Blue Sky Alternatives is a listed investment company (LIC) that invests in a diverse range of alternative assets including private equity, real assets, private real estate and hedge funds. This LIC is the only one of its kind on the ASX that invests in alternative assets.
Blue Sky aims to provide investors capital growth and good income. Over the last year its pre-tax fund growth was 11.61%.
In its latest update 17.2% of its assets were invested in its water fund, 20.5% of assets were invested in student accommodation and 7.6% of assets were invested in retirement living.
Blue Sky currently has a grossed-up dividend yield of 5.93%.
Class Ltd (ASX: CL1)
Class is one of the fastest growing software businesses on the ASX. It offers cloud software for self-managed superannuation fund (SMSF) administrators.
Software companies aren't a feature in the list of the largest ASX companies. In FY17 Class grew its revenue by 28%, earnings before interest, tax, depreciation and amortisation by 39% and net profit after tax by 37%.
The shift of SMSFs to cloud accounting is going to accelerate in the next few years as accountants look to do their work more efficiently.
Class is currently trading at 33x FY18's estimated earnings with a grossed-up dividend yield of 2.74%.
Greencross Limited (ASX: GXL)
The pet industry is steadily growing each year thanks to a number of different factors.
The pet population grows each year with the human population and we are willing to spend more on our pets with the 'humanisation' trend. Pet insurance makes it more likely that pet owners will say yes to an expensive operation for their pet.
Greencross is excellently placed to profit from the pet industry with its Petbarn stores and Greencross vets. Management have developed a clever strategy of co-locating a vet inside a Petbarn, which should boost revenue and save on costs for both businesses.
Greencross is currently trading at 15x FY18's estimated earnings with a grossed-up dividend yield of 4.67%.
Foolish takeaway
All three shares should have positive futures ahead. Greencross is priced very attractively at only 15x FY18's estimated earnings, so that's the one I'd pick if I were buying today.
