Investing in (ASX) shares for the long-term is a powerful tool because of how compounding and profit growth can lead to great results for shareholders.
If an investment goes up by an average of 10% per year – roughly the long-term return of the global share market – it will double in approximately eight years. If something goes up in value by 15% per year it'll double in just five years.
No investment is guaranteed to go up by that much, but certain areas of the share market look destined to outperform the S&P/ASX 200 Index (ASX: XJO) over the long-term because of their earnings growth, global ambitions and profitability.
I'm going to talk about two exchange-traded funds (ETFs) that I think are very appealing. I'm calling them ASX shares because they provide access to shares and trade on the ASX.
Image source: Getty Images
Vanguard MSCI index International Shares ETF (ASX: VGS)
There are a number of high-quality ASX shares that we can buy, but the ASX only makes up approximately 2% of the global share market. I think it's a good idea to be invested in good businesses from the other 98%.
The VGS ETF provides low-cost exposure to many of the world's largest companies that are listed in 'major' developed countries.
We're talking about markets like the US, Japan, the UK, Canada, Germany, France, Switzerland, the Netherlands, Sweden, Spain, Italy, Hong Kong, Denmark and Singapore.
As you can see, it's extremely diversified geographically and that helps reduce risk and accesses profit generation from across the world.
Secondly, VGS ETF owns a significant number of businesses. At the end of 31 January 2026, it had 1,286 positions, which means it's very diversified.
But, it's not appealing because it owns lots of businesses from various countries. To me, that's just a useful bonus.
These are impressive businesses within the portfolio that have delivered good returns – the VGS ETF has returned an average of 15.1% per year. While past performance is not a guarantee of future performance, the future looks bright.
It's invested in companies like Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, Costco and Intuitive Surgical – these businesses have the biggest influence on the VGS ETF's return because they have the largest allocations. You don't find this sort of growth potential with blue-chip ASX shares. The US giants are investing in new services like AI and other technology that could drive earnings higher.
Vanguard reported that the portfolio had an earnings growth rate of 21.2%, which is a strong tailwind for future share price growth. Additionally, it had a return on equity (ROE) of 19.8%, showing its quality and implies the level of return it can generate on future retained profits that are invested in the business.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This is another ETF that doesn't invest in ASX shares. Instead, it invests in high-quality US shares that have strong economic moats.
An economic moat is another word for competitive advantages, which is a key element that keeps a company ahead of challengers. A moat could be a cost advantage, brand power, intellectual property, network effects and so on. The stronger the moat, the harder it is for a business to hurt the market share/profit margin.
The MOAT ETF invests in businesses that Morningstar analysts believe the economic moat will endure (more likely than not) for the next 20 years. With that strategy, it gives me a lot of confidence to invest in the fund for the long-term.
In addition to that, the MOAT ETF only invests in businesses when analysts think that the business is trading at good value.
The effectiveness of that strategy has enabled the MOAT ETF to deliver an average return per year of 15.7% over the past decade. I plan to buy more of this ETF in the coming years, though it's important to note that past performance is not a guarantee of future returns.
