2 top ASX shares to buy and hold for the next decade

There are certain ASX shares that could be excellent investments for the decade ahead, so why not benefit from the power of compounding?

I think that the businesses which can grow the most over the next 10 years could be the best investments today, even if they don’t seem cheap.

I believe the following two investments could be excellent buys today.

L1 Group Ltd (ASX: L1G)

L1 Group is a fund manager that offers clients exposure to a number of pleasing investment strategies including its long short strategy, a global long short strategy, a gold strategy and a few others.

There are a few important drivers of a fund management business, including solid fund performance and long-term growth of funds under management (FUM), since that’s what generates the revenue.

In FY26, the company reported FUM growth of around 17% to $19.1 billion. Revenue rose 49% while expenses declined around 15%, leading to strong positive operating leverage. Underlying net profit grew 97% to $188.8 million.

Following its merger/takeover of Platinum, it has achieved cost synergies of $31.7 million, with the cost target increased from $35 million to $43 million.

There are a number of other growth avenues for the business, including two extension strategies, a new PXC Advisors joint venture, offshore distribution build-out in North America, Europe, the Middle East and Africa. L1 has also confirmed an Australian small caps strategy.

Overall, the outlook for the ASX share seems very positive for the business in the long-term and I think the differentiated strategies with great performance is a promising future.

VanEck MSCI International Quality ETF (ASX: QUAL)

Another investment that I’m bullish about for the long-term is this exchange-traded fund (ETF) which aims to buy high-quality global shares.

There are three factors that a business must rank highly on to be potentially included in this ETF’s holdings.

First, companies must have a high return on equity (ROE). That means the business makes a lot of profit for how much shareholder money is still retained within the business. Plus, it could be a good indicator of how much profit the business could make on additional retained earnings in the future.

Second, businesses must have earnings stability. That should mean there is less chance of their earnings going down, which could suggest stronger performance during economically weak times. If earnings are regularly going up, that’s a good sign for capital growth.

Third, the QUAL ETF holdings must have low debt levels, which is a pleasing sign of the company’s balance sheet strength.

When you put those elements together, it’s not surprising that the QUAL ETF has returned an average of 15% per year over the last decade. I think it could be a very solid performer over the next decade as well.

The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

More reading

• I’d buy 164,557 shares of this ASX stock to aim for $500 a week of passive income
• 3 super ASX ETFs for beginner investors
• L1 Group FY26 profit leaps 97% in first post-merger result
• L1 Group’s new PXC Advisors venture delivers 51% return since inception
• 2 amazing ASX ETFs I’d buy and hold for the next decade

Motley Fool contributor Tristan Harrison has positions in L1 Group and VanEck Msci International Quality ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.