Over the long-term, it's the ASX shares increasing earnings at a good rate of compounding that are most likely to grow our wealth over time.
Therefore, businesses that can unlock the most earnings growth are best positioned to deliver the strongest shareholder returns.
In the next three to five years, I'm expecting the following investments to deliver excellent returns. In a decade, they could have achieved significant growth for shareholders.
Image source: Getty Images
TechnologyOne Ltd (ASX: TNE)
TechnologyOne is one of the leading ASX tech shares, in my view. It offers enterprise software for more than 1,300 clients including businesses, government agencies, local councils and universities.
Organisations are increasingly seeking high-quality software to help run their operations, given how it allows them to run more efficiently and give all users access to the best software possible.
TechnologyOne regularly spends more than 20% of its revenue on research and development (R&D) each year, enabling the ASX share to make the best software possible and unlocking more growth.
One of the company's key drivers of its financials is how it targets revenue growth from its existing customer base each year of around 115%. That's the net revenue retention rate (NRR).
If the company' overall revenue grows at 15% per year, that's a fantastic growth rate to help earnings growth at least at that pace.
Plus, the business expects to grow its profit margins in the coming years as it benefits from operating leverage.
I'm particularly optimistic by what the business can achieve in the UK because the organisation and government set-ups are fairly similar to Australia.
If it can reach its $1 billion annual recurring revenue (ARR) goal in the next few years, I think it'll be of the ASX's top tech shares.
According to the projection on CMC Invest, the ASX share is valued at 62x FY26's estimated earnings.
WCM Quality Global Growth Fund (ASX: WCMQ)
The other investment I want to talk about is this exchange-traded fund (ETF), which looks over the international share market for opportunities that can deliver an improving economic moat.
It's the economic moat that allows a business to protect and grow its earnings from competitors who want to come in and steal some customers.
By only focusing on businesses with improving economic moats, I think WCM's portfolio is, on average, very high-quality. On top of that, this ASX ETF wants to see that potential investments have a corporate culture that supports the improving economic moat.
In terms of investment returns, impressively, the fund has returned an average of around 13% per year in the last five years thanks to its investment strategies.
I think every Australian would benefit by having some of their portfolio invest in international shares, and this is an appealing way to do it. It also comes with a bonus of a targeted dividend yield of at least 5%.
These aren't the only ASX shares I expect to have a strong decade ahead, though.
