There aren’t too many exchange-traded funds (ETFs) that I’d be excited to hold forever. They’d need to offer global diversification, compelling prospective returns, and cost a reasonable fee.
That’s exactly why I reckon these two ETFs are excellent long-term ones to consider.
VanEck Morningstar International Wide Moat ETF (ASX: GOAT)
I own units of this ETF, it matches the description of what I’m looking for. It’s invested in a portfolio of (currently) 60 businesses from across the world. If we owned a portfolio of 60 individual positions in our portfolio, that would be considered ample, diversification – perhaps excessive.
These businesses come from across the world – around two-thirds from the US, and the rest from places like Japan, France, the UK, Ireland, Switzerland, Sweden, Germany and so on.
The ETF is invested in businesses that Morningstar believes possess sustainable competitive advantages, or with ‘wide’ economic moats, such as Intuit, Amazon.com, Alphabet, Transunion and Polaris.
These companies only enter the portfolio when they’re “trading at attractive prices relative to Morningstar’s estimate of fair value.” This approach seems to have worked well, because the index that this ETF tracks has returned an average of 14.2% per year over the decade to July 2023.
This extensive investment strategy has an investment cost of 0.55%, much cheaper than what a typical fund manager might charge to do this sort of investing.
Betashares Global Cybersecurity ETF (ASX: HACK)
The HACK ETF is a theme-based investment fund, aimed at giving investors exposure to the trend of more organisations wanting stronger cybersecurity, and there being an increasing number of cyber attacks.
It’s invested in the largest global players in the space, as well as some of the emerging names. The HACK ETF currently has 35 holdings, with Broadcom, Cisco Systems, Infosys, Palo Alto Networks and Fortinet being the five with each having a weighting of between approximately 5% to 6%.
Since the ETF started in August 2016, Betashares Global Cybersecurity ETF has delivered an average return per year of 16.3%, which has been impressive after all of the interest rate rises.
It seems cybersecurity is just going to become more important as time goes on because increasing levels of important information (like intellectual property and personal details) are stored online.
The HACK ETF has an annual management fee of 0.67%.
