The best ASX ETFs for compounding wealth until 2040

Here's why these funds could be among the best to buy and hold for the long term.

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The secret to building wealth in the share market isn't about timing your trades or chasing quick wins.

It is about patience, consistency, and letting the power of compounding work over decades. By reinvesting income and staying invested, even modest contributions can snowball into something substantial.

For investors looking to grow their wealth steadily through to 2040, exchange-traded funds (ETFs) offer an easy way to gain exposure to high-quality companies across industries and geographies.

Here are three that could be stand out buys.

iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF gives Australian investors access to the 500 largest stocks listed in the United States — home to many of the world's most dominant and profitable businesses.

Its portfolio includes technology leaders such as Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT), consumer staples giants like Coca-Cola (NYSE: KO) and Procter & Gamble (NYSE: PG), and healthcare companies including Johnson & Johnson (NYSE: JNJ).

This breadth makes the iShares S&P 500 ETF an excellent long-term core holding. By owning the S&P 500, you're capturing the performance of the U.S. economy itself — and by extension, many of the global leaders that shape how the world lives, works, and spends.

Betashares Australian Quality ETF (ASX: AQLT)

Another ASX ETF that could be a buy is the Betashares Australian Quality ETF. It takes a selective approach to the Australian market, targeting only the highest-quality ASX shares. Its index screens for firms with strong balance sheets, high returns on equity, and stable earnings growth.

That means instead of owning the entire ASX, you're concentrated in a smaller group of businesses that have consistently shown financial strength. Its holdings have included companies like CSL Ltd (ASX: CSL), Cochlear Ltd (ASX: COH), Macquarie Group Ltd (ASX: MQG), and REA Group Ltd (ASX: REA). These are all leaders in their fields with long growth runways.

For investors who want Australian exposure but with an emphasis on quality, the Betashares Australian Quality ETF could be an attractive buy and hold option. It was recently named as one to consider buying by Betashares.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

Finally, the VanEck Morningstar Wide Moat ETF could be a great ASX ETF to buy and hold. It is built around Warren Buffett's favourite idea: invest in businesses with sustainable competitive advantages, or wide moats, and fair valuations. These are stocks that can fend off competitors and compound earnings for decades.

The ETF's current holdings include Alphabet (NASDAQ: GOOGL), Adobe (NASDAQ: ADBE), and Nike (NYSE: NKE) — businesses with dominant brands, pricing power, and sticky customer bases. By owning the VanEck Morningstar Wide Moat ETF, investors can replicate Buffett's investment style with minimal effort.

Motley Fool contributor James Mickleboro has positions in CSL, Cochlear, Nike, REA Group, and VanEck Morningstar Wide Moat ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Alphabet, Apple, CSL, Cochlear, Macquarie Group, Microsoft, Nike, and iShares S&P 500 ETF. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Adobe, Alphabet, Apple, CSL, Cochlear, Microsoft, Nike, VanEck Morningstar Wide Moat ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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