3 ASX shares to buy and hold forever

I would buy and hold these 3 ASX shares in my portfolio forever, including farmland REIT Rural Funds Group (ASX:RFF).

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Foolish takeaway

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.

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.

More on Defensive Shares

Four businessmen pull martial arts stances as they get into a defensive position.
Defensive Shares

Why I'd buy these ASX defensive shares for reliability in these times

These stocks can offer pleasing stability.

Read more »

The letters ETF on wooden cubes with golden coins on top of the cubes and on the ground
Defensive Shares

Bolster your ASX stock portfolio with these two defensive ETFs

These ETFs can help you sleep at night...

Read more »

Senior man wearing glasses and a leather jacket works on his laptop in a cafe.
Defensive Shares

Overinvested in Woolworths shares? Here are two alternative defensive ASX shares

These businesses offer strong and defensive earnings.

Read more »

Two funeral workers with a laptop surrounded by cofins.
Defensive Shares

Down 24% this year, is this top ASX defensive share a top buy according to Macquarie?

Are investors missing a trick by avoiding this ASX share?

Read more »

A young bank customer wearing a yellow jumper smiles as she checks her bank balance on her phone.
Defensive Shares

Why Telstra shares are an appealing ASX defensive pick

Can investors call on this telco stock for resilient returns?

Read more »

A woman in a hammock on her laptop and drinking a smoothie
Defensive Shares

3 ASX shares to buy for a stress-free life

I think these businesses are attractively defensive.

Read more »

a woman holds her finger to the side of her face and looks upwards as she thinks about something.
Defensive Shares

Portfolio allocation: should I still be buying ASX defensive stocks?

Is this the right time to invest in resilient businesses?

Read more »

Piggy bank at the end of a winding road.
Defensive Shares

Will lower interest rates boost ASX infrastruture stocks?

Let's take a look.

Read more »