Many would say that the whole point of investing is growth. Growing your wealth, growing your passive income, growing your cash flow is why people invest in shares, or property for that matter. However, many investors shy away from growth investing – that is, investing in stocks with high rates of (primarily) revenue growth that may or may not be profitable. This is not uncommon – some of the biggest growth companies in the world – Tesla and Uber come to mind – are yet to turn a consistent profit.
Nevertheless, growth stocks have shown to be the place to invest over the last three to five years, with many ASX growth stocks doubling or tripling in value over this time.
So here's how I would build a basic growth portfolio with 3 ASX shares.
BetaShares Nasdaq 100 ETF (ASX: NDQ)
This exchange traded fund (ETF) tracks the US Nasdaq exchange, which has most of the big US tech giants listed on it. The NDQ fund is a basket of the top 100 of these companies and includes Tesla and Uber, as well as Amazon, Apple, Alphabet (Google), Facebook, Netflix and Lyft. I can't think of a better foundation for a growth portfolio than this basket of stocks.
Macquarie Group Ltd (ASX: MQG)
Macquarie is often described as our 'fifth bank', but I think this company can give us far more than just a banking stock. Macquarie is one of the top asset managers in the world and has shown the ability to invest in some of the best companies and infrastructure around the world through its Macquarie Capital division. MQG shares have more than doubled in value over the past five years and I think the company is well-placed to continue this growth over the next five.
Xero Ltd (ASX: XRO)
Xero is my favourite WAAAX stock for its software-as-a-service (SaaS) subscription model and clear path to profitability. I think the fact that Xero has swiftly turned the accounting software market on its head over the past few years shows the value of its product and brand. Xero has an almost unlimited global market to expand into and with the ATO and other state revenue collectors increasingly pushing digitalisation, I think that this company is doing everything right.
Foolish takeaway
I think these shares would make a solid foundation for a long-term, focused growth portfolio. In my opinion, NDQ is the best broad-based growth bet out there, and any investor would benefit from having it in their portfolio.
