ASX growth shares are regularly the best-performing share investments over the long-term because of the power of compounding.
The market doesn't usually value a business based on its maximum potential, leaving room for attractive returns if it delivers adequately on its growth plans.
The two investments I want to tell you about are two ideas with incredibly strong economic moats. That means they have attractive competitive advantages compared to others in the sector. Let's get into it.
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Xero Ltd (ASX: XRO)
Xero is one of the world's leading cloud accounting software businesses with a presence in numerous countries including Australia, New Zealand, the UK, Singapore, South Africa and beyond.
The business reported solid numbers this week in the six months to September 2025, with subscriber growth of 10%, operating revenue growth of 20%, net profit growth of 42% and free cash flow growth of 54%.
It's investing in a number of AI and automation tools to help businesses and owners get the most out of the software and understand the numbers, while also assisting with efficient financials preparation and lodgements to the government. I think ongoing advancements will help set it apart from others in the sector.
The company is expecting its profit margins to increase in FY26 and I expect its subscriber numbers can continue growing at a pleasing pace for a number of years.
At this lower valuation after a recent dip, I'm more optimistic about the return potential of the ASX growth share.
WCM Quality Global Growth Fund (ASX: WCMQ)
This is an exchange-traded fund (ETF) that is focused on investing in some of the most compelling businesses across the world.
I'm calling this an ASX growth share because we can buy it on the ASX and it's providing strong returns.
Over the three years to 31 October 2025, it delivered an average return per year of 26.9%. In the past five years, it returned an average of 15.9% per year.
While past performance does not guarantee future performance, I think it's set to produce solid ongoing returns due to its investment strategy.
WCM believes that corporate culture is the biggest influence on a company's ability to grow its competitive advantages, or economic moat. It's invested in a portfolio of between 20 to 40 global names that are usually in high-growth consumer, technology and healthcare sectors.
I think its portfolio of names like AppLovin, Taiwan Semiconductor, Amazon.com, 3i Group and Siemens Energy are poised to deliver good returns.
