Exchange-traded funds (ETFs) can be a really good investment and useful way to invest in a wide group of businesses.
There are lots of different types of ETFs. Some invest in the whole share market such as the ASX share market, the US share market or even the global share market.
I think there are a handful of ETFs that can outperform the average return of the ASX share market over the long-term, so they’re the ones I’d want to buy in April.
Vaneck Morningstar Wide Moat ETF (ASX: MOAT)
Past performance is not a guarantee of future results.
However, I think that out of all the possible ETFs, this is one of the main ones I’d want to buy.
It invests with the strategy in mind of only considering US-listed businesses that excellent competitive advantages, or moats, compared to other competitors.
From that watchlist, the Morningstar analysts only decide to invest if they believe that the valuation is cheaper than what the company’s fair price is.
I think it’s a winning combination, with the ETF generating an average total return per year of 15% over the past five years.
At the end of March, some of its biggest positions include Meta Platforms, Salesforce, Fortinet
and Microsoft.
iShares Global 100 ETF (ASX: IOO)
I think that the nature of capitalism means that power steadily concentrates at the top unless something goes terribly wrong for the business.
This ETF is about investing in 100 of the largest listed businesses in the world, so it comes with good diversification in my opinion. While over 70% of the portfolio is invested in US-listed businesses, other countries are also represented such as the UK, Switzerland, France, Germany, Japan and South Korea.
The business names we’re talking about include Apple, Microsoft, Amazon.com
, Alphabet, Exxon Mobil, Johnson & Johnson, JPMorgan Chase, Procter & Gamble, Nestle and so on.
No matter if the biggest businesses are listed in the US, Canada, the UK, Germany or Japan, this ETF will own it.
With average returns per annum of 12.2% over the last five years, I think this is a quality ETF to own for strong diversification.
