Investing for the long term (such as a decade) makes a lot of sense for wealth building, thanks to the power of compounding and the strong financial performance of good ASX shares.
Some of the best companies on the ASX (and globally) have delivered significant returns thanks to their ability to grow their revenue at a strong pace and typically deliver rising profit margins.
Investors typically value a business based on its profitability. So, if it's able to deliver exceptional profit growth in the coming years, it could deliver really exciting returns for investors.
I'm going to talk about two ASX share investments I believe could be top performers over the next decade.
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Tuas Ltd (ASX: TUA)
This ASX share is one of the most promising S&P/ASX 300 Index (ASX: XKO) shares, in my view. It's a Singaporean telecommunications business with significant growth potential.
I like businesses that are growing quickly and have the potential to become significantly larger. Tuas recently reported its FY25 result, which revealed 29% revenue growth to $151.3 million, with mobile subscribers jumping by around 200,000 to 1.25 million.
Pleasingly, the company continues to demonstrate increasing profitability as it grows. Operating profit (EBITDA) grew by 38% in FY25, with the EBITDA margin rising to FY25, up from 42% in FY24. I'm expecting the company's profit margins to continue climbing as it adds more subscribers.
Tuas points to sustained growth, with market-leading inclusions at each price point. It also expanded its sales channels to include Changi Airport terminals and 7-Eleven stores. The ASX share also has a small but growing broadband division, which could grow into something meaningful in the coming years.
The business said it continues to invest capital expenditure to support subscriber growth and expand 5G coverage.
Finally, the ASX share's acquisition of a Singaporean competitor, M1, also adds significant profitability to the business.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
Exchange-traded funds (ETFs) can be just as good a growth option as an individual business.
The MOAT ETF is one of my favourite ideas because of the types of businesses it invests in.
It focuses on quality US companies that Morningstar believes possess sustainable competitive advantages or have wide economic moats.
An economic moat is the sort of advantage(s) that a company has to fight off competitors. That could be brand power, network effects, cost advantages, intellectual property, licenses and so on.
A 'wide' economic moat means the analysts think the business is more likely than not to generate excess profits for at least the next 20 years.
The other element of the investment strategy is to target companies trading at attractive prices relative to Morningstar's estimate of the fair value of the business.
This results in the entire portfolio consisting of high-quality businesses that are trading at a good value and may be undervalued. I'm calling this an ASX share because it's about investing in shares, and we can buy it on the ASX.
I like how the portfolio is diversified across various sectors such as healthcare, industrials, IT and consumer staples.
Past performance is not a guarantee of future returns, but having said that, it has delivered an average return per year of 16.6% over the last five years.
