There aren't too many ASX stocks that I buy to target a 100% return. Of course, I'd hope that all of my investments eventually double, given enough time. We're not talking about investing in a term deposit, after all.
But most of the ASX stocks that I buy are selected because of their 'get rich slow' potential. I find this approach suits my investing temperament and skillset better than a 'get rich quick' mindset.
However, there is one ASX stock that I continue to buy, which I think has the best potential of doubling my money over a few years, not a decade. It would be one of the few shares I would buy today to target that 100% return.
It's not technically an ASX stock though, but an exchange-traded fund (ETF) by the name of the VanEck Morningstar Wide Moat ETF (ASX: MOAT).
The Wide Moat ETF is an investment I've written about many times here at the Fool. Unlike most of the popular ETFs out there, MOAT is not an index fund. Instead, it invests in a concentrated portfolio of underlying shares. These are actively selected based on their perceived possession of a 'wide economic moat'.
A 'moat' is the Warren Buffett-coined term. It describes an intrinsic competitive advantage that a company can possess that helps it fend off competition and maintain dominance of its chosen product market.
This could be a strong brand, such as Apple or Coca-Cola. It could also involve a cost advantage that allows the company to sell products cheaper than competitors, like Costco or Coles Group Ltd (ASX: COL). Alternatively, it could be about offering a product or service that customers find difficult to avoid, like Transurban Group (ASX: TCL) or Microsoft.
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How the Wide Moat ETF can get a 100% return
Buffett has often spoken about how companies that possess these moats are usually some of the best investments, and ones that he actively searches for. This alone helps the Wide Moat ETF appeal to me.
But let's put some rubber on the road and see how the numbers actually stack up.
According to VanEck, The Wide Moat ETF has returned (growth and dividends) 13.9% over the 12 months to 31 July 2024. Over the past three years, MOAT investors have received an average return of 11.8%. This rises to 15.39% over the past five years. Now, past performance is never a guarantee of future returns. But I think MOAT's emulation of Buffett's investing thesis bodes well for its continuing potential.
Let's say MOAT does manage to keep up that impressive 15.39% return. If so, it would take just under five years for an investor to achieve a 100% return and double their money.
I'm not banking on this return, although I would be surprised if it doesn't continue. However, I am confident that this investment is a great place to be invested right now. As such, I would happily buy more MOAT units today.
