ASX growth shares can generate strong returns for investors over the long term; however, it may be a good idea to consider investments that provide exposure to markets outside of Australia.
The local economy is a great place to operate, but there are also significant opportunities elsewhere. Australia is a relatively small part of the global economy.
Let's look at two ASX growth share investments that could deliver strong returns, in my opinion.
Betashares Global Quality Leaders ETF (ASX: QLTY)
This exchange-traded fund (ETF) focuses on investing in 150 of the highest-quality businesses from across the world.
These businesses rank well on four different quality metrics. First, they have a high return on equity (ROE). Second, they have a low debt-to-capital ratio. Third, they have strong cash flow ability. Finally, they provide earnings stability (and growth).
When you put all of those factors together, it's no wonder the fund has managed to return an average of 15% per year since November 2018 (when it was started). Of course, past performance is not a guarantee of future performance. With a return like that, I'd call that an ASX growth share (it's listed on the ASX, and it's about investing in shares).
Another reason to like this fund is the diversification. I like that there are four sectors with a double-digit allocation within the portfolio: IT, industrials, healthcare, and financials. IT seems like the most compelling industry, with strong margins and growth prospects, so it's pleasing that it makes up more than a third of the portfolio.
I think many Australian investors could benefit by having a bigger allocation to good assets outside of Australia, and this investment could be a good way to get that exposure.
Tuas Ltd (ASX: TUA)
Tuas is one of the largest positions in my portfolio that I'd describe as an ASX growth share.
It's a Singaporean telecommunications business that is rapidly capturing market share through its value offerings across different price points.
The company's FY25 results included a lot of pleasing growth for shareholders. Active mobile subscribers grew by approximately 200,000 to 1.25 million, and active broadband services rose by around 23,000 to 25,592.
This helped revenue increase by 29% to $151.3 million, and operating profit (EBITDA) grew by 38% to $68.4 million. The net profit after tax (NPAT) increased by $11.3 million to $6.9 million.
One of the most important factors of the company's future success is the rising profit margins, which will allow the ASX growth share's net profit to rise at a faster pace than revenue, which is usually what investors value a business on.
FY25 saw the company's EBITDA margin increase to 45%, up from 42%, representing a pleasing rate of improvement. I think there's room for further growth.
There are two factors that I believe could contribute significantly to the business' growth in the coming years. First, it's acquiring a Singapore competitor called M1, which will significantly improve the company's market share and profitability. Second, the company could expand into other nearby Asian countries such as Malaysia and Indonesia.
