Finding FTSE 100 stocks to buy and hold for years is hugely challenging. The business world is constantly changing and developing, and many companies just cannot keep up.
It looks as if it is only becoming more challenging for businesses to navigate change. Since 2000 the average life of UK companies has fallen from nearly 11 years to 8.5.
Still, while it is impossible to predict what the future holds for any business, I think some firms are better positioned for long-term success than others. By sticking with these organisations, I think I can swing the odds of finding a top-quality buy-and-hold stock in my favour.
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There is one company that looks to me to have all the qualities I am looking for.
FTSE 100 buy-and-hold buy
The wealth management market is highly fragmented, and it is only becoming more competitive. In this market, winning companies have always had two desirable qualities, size and reputation.
Investors will only give their money to someone they trust, which is why reputation is essential. At the same time, keeping up-to-date with changing regulations and producing something investors want to pay for cost money. Smaller managers may struggle to meet these costs. This is where larger firms have the edge.
Considering all of the above, the one FTSE 100 stock I would buy to hold until 2030 is Schroders (LSE: SDRC).
This is one of the UK’s more storied asset managers. It is also one of the largest. According to the company’s figures, it manages £700bn for clients around the world. That is nearly $1trn, putting it in the ranks of the world’s top asset managers. In comparison, Hargreaves Lansdown has around £120bn of assets under administration.
As the global economy recovers and the ranks of the worlds richest expand, I reckon the demand for wealth management services will only grow. This could be great news for Schroders. Its size and reputation may only continue to attract assets.
Those are the reasons why I would buy and hold the stock to 2030.
As well as the above growth tailwinds, shares in the asset manager offer a dividend yield of 3%. Asset growth should help the company’s bottom line, which could allow the group to hike its payout to investors.
Risks and challenges
Schroders has some significant growth tailwinds behind it, but the FTSE 100 organisation does have challenges. It is one of the world’s largest wealth managers, but it is not the largest. It faces competition from larger US groups, all of which are competing for business in the same pool of customers. The firm has to stay on its toes, or it could lose market share to bigger players.
At the same time, new regulations could hurt the company’s bottom line. This is something no financial enterprise can avoid.
Despite these risks and challenges, I would buy Schroders for my portfolio, considering its growth potential. A decade of expansion could be on the cards as the firm expands its assets under management.
