The ASX shares that I think could make some of the best returns are ones that look like they could compound earnings at a strong pace over an extended period of time.
That's why I think it's a good idea for investors to look at businesses that have a long and impressive growth runway.
In my view, two of the ASX shares that could outperform the S&P/ASX 200 Index (ASX: XJO) over the next decade are the ones below.
Lovisa Holdings Ltd (ASX: LOV)
Lovisa is a fast-growing affordable jewellery retailer that focuses on younger shoppers with appealing products.
The ASX retail share's main growth tactic is to add more stores to its global network. In the FY26 half-year result, the company reported that between the end of FY25 and the end of the FY26 half-year period, it added 65 more stores, a rise of 6.3%.
Of those 65 locations, some of the highlights included four more stores in Australia, four in South Africa, 14 more in the UK, nine more in Germany, eight more in the US and nine more in Canada.
In my view, those core markets offer significant growth potential for Lovisa over the next decade.
I'm optimistic about how many more global stores the company can add in the next decade, particularly in countries where it has a small presence at this stage for the population size of the market, such as China, Vietnam, Spain, Poland, Canada and even the US.
In the HY26 report, the company reported more than 20% growth for its core revenue and net profit, which is an excellent rate of progress. I'm also hopeful its new business (initially in the UK) called Jewells can become a meaningful contributor in future years.
According to the forecast on CMC Invest, the business is projected to generate earnings per share (EPS) of $1.23 in FY28. That puts the ASX share's valuation at the time of writing at less than 19x FY28's estimated earnings.
Focus on the long term motivational quote
Global X S&P World Ex Australia GARP ETF (ASX: GARP)
This exchange-traded fund (ETF) offers number of positives for investors.
For example, it invests in 250 global companies that have 'growth at a reasonable price' (GARP) characteristics.
The businesses in the portfolio need to have good growth with both strong sales and earnings growth.
They need to be good value, with an attractive price/earnings (P/E) ratio.
Finally, these businesses need to display quality, which is measured by the financial leverage and the return on equity (ROE).
By putting these elements together, that's a powerful combination for potential returns.
Offering great businesses at appealing value could lead to market-beating returns in the long-term and outperform many other ASX shares.
